OFI February 2017

February 2017 Vol 33 No 2 www.oďŹ magazine.com

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Rapeseed under pressure

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

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CONTENTS VOL. 33 NO. 2 FEBRUARY 2017 EDITORIAL: Editor: Serena Lim Tel: +44 (0)1737 855066 E-mail: serenalim@quartzltd.com Editorial Assistant: Rose Hales Tel: +44 (0)1737 855157 E-mail: rosehales@quartzltd.com SALES:

FEATURES

Sales Manager: Mark Winthrop-Wallace Tel: +44 (0)1737 855 114 E-mail: markww@quartzltd.com

HEALTH & NUTRITION

Chinese Sales Executive: Erik Heath Tel: +44 (0)1737 855108 E-mail: erikheath@quartzltd.com PRODUCTION: Production Editor: Carol Baird E-mail: carolbaird@quartzltd.com CORPORATE:

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Pick of the bunch

BIOFUELS

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Argentina: positive projections

NEWS & EVENTS

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Sales Consultant: Anita Revis Tel: +44 (0)1737 855068 E-mail: anitarevis@quartzltd.com

BUTTER IS APPROXIMATELY 51% SATURATED FAT, 21% MONOUNSATURATED FAT AND 3% POLYUNSATURATED FAT; CONTAINS BETWEEN 2,200-6,800MG OF CHOLESTEROL PER KG; AND OXIDISES VERY SLOWLY WHEN SUBJECTED TO HIGH HEATS – BUT DOES THIS MAKE IT A HEALTHY OR UNHEALTHY CHOICE? P16

Managing Director: Steve Diprose Tel: +44 (0)1737 855164 E-mail: stevediprose@quartzltd.com SUBSCRIPTIONS: Elizabeth Barford Tel: +44 (0)1737 855028 E-mail: subscriptions@quartzltd.com Address: Subscriptions, Quartz House, 20 Clarendon Road, Redhill, Surrey, RH1 1QX, UK

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Defending palm oil 2

A member of FOSFA

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SHIPPING & STORAGE

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

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Biotech News

ChemChina-Syngenta merger decision delayed 10

Transport & Logistics News

G3 builds new export terminal in Canada 12

31

Biofuels News

China increases tariffs on US ethanol and by-product DDGS

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News

Ferrerro publicly defends palm oil use in Nutella

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Renewable Materials News

Huntsman completes sale of European surfactants business

Rotterdam: Europe’s finest

SHOW PREVIEW

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Diary of Events

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Statistics

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Contents FEB.indd 1

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NEWS

COMMENT

Defending palm oil I

t’s not often that a food company publicly defends palm oil, the oil that gets the worst press in our industry.

But that’s what Italian confectionery firm Ferrero has done as it fights to defend its flagship Nutella spread against cancer claims (see story, right).

It has run TV commercials and taken out full-page newspaper ads to reassure consumers that it is safe to eat Nutella.

The furore dates back to an opinion issued last May by the European Food Safety Authority (EFSA), which had examined the health risks of GEs, 3-MCPD and 2-MCPD. These substances form during food processing, particularly when refining vegetable oils at high temperatures around and above 200oC (see News, OFI June 2016).

The highest levels were found in palm oils and palm fats.

The EFSA’s Panel on Contaminants in the Food Chain (CONTAM) concluded that there is sufficient evidence that glycidol (the parent compound of GE) is genotoxic and carcinogenic and therefore did not set a safe level for GE. It was particularly concerned about the exposure of babies solely consuming infant formula.

It also set a tolerable daily intake of 0.8 micrograms/kg of body weight/day for 3-MCPD and its fatty acid esters but said information was too limited to set a safe level for 2-MCPD. So should we be worried? CONTAM’s warning applies to those of us with a high exposure to these compounds, and to younger age groups (aged up to 18 years) with average exposures. If we avoid eating too many cakes, pastries, margarine, spreads and processed foods, then our risk is low. And no food agency has recommended that we stop eating palm oil.

The EFSA opinion has caused a stir in Italy with Italian supermarket Coop removing palm oil from its own branded products and Italy’s largest baker, Barilla labelling its product ‘palm oil free’.

But with Nutella making up a fifth of Ferrero’s total sales, the stakes are high for the firm. This is the second time Nutella has been in the spotlight after the French environment minister urged a boycott of the spread in 2015 for environmental reasons. In that instant, both Greenpeace and WWF defended Ferrero, pointing out that it is a leader in responsible sourcing of palm oil.

The Malaysian palm oil industry itself knows full well that it is not just fact which sways opinions, it is perception.

“Our industry succeeds only when consumers trust that what they buy is healthy, sustainable and, above all, safe,” Malaysian Palm Oil Council CEO Dr Kalyana Sundram says.

It has already voluntarily reduced or eliminated the occurrence of these compounds in palm oil intended for infant formulations.

And the EFSA also revealed that levels of GE in palm oils and fats halved between 2010 and 2015, due to voluntary measures taken by producers.

So while believing that ‘the actual risk to human health has yet to be clearly defined”, the MPOC is pledging that “in the near future, palm oil produced in Malaysia will be free of these contaminants”.

Read ‘3-MCPD and GE: A New Challenge’, OFI Sept/Oct 2016 on the latest processing techniques to minimse the occurrence of GE, 3-MCPD and 2-MCPD within bleaching and deodorisation

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Ferrero publicly defends palm oil use in Nutella

I

talian confectionery firm Ferrero – the maker of Nutella spread – has come out in public defence of palm oil, after the European Food Safety Authority (EFSA) flagged concerns about process contaminants found in palm and other vegetable oils last May. Ferrero has launched an advertising campaign to assure the public about the safety of Nutella, its flagship product, Reuters said.

“Making Nutella without palm oil would produce an inferior substitute,” Ferrero’s purchasing manager Vincenzo Tapella told Reuters. Palm oil gave the chocolate and hazelnut spread its smooth texture and shelf life and Ferrero used about 185,000 tonnes/year of the oil.

In May, the EFSA said glycerolbased contaminants found in palm and other vegetable oils, margarines and some processed foods raised potential health concerns for younger consumers and for people who consumed a high amount of these products (see OFI News, June 2016).

The EFSA assessed the health risks of glycidyl fatty acid esters (GE), 3-monochloropropane-1,2diol (3-MCPD) and 2-monochloropropane-1,2-diol (2-MCPD) and their fatty acid esters. The substances form during food processing, particularly when refining vegetables oils at high

temperatures around and above 2000C. The highest levels of GE, 3-MPCD and 2-MCPD were found in palm oils and palm fats.

The EFSA’s expert Panel on Contaminants in the Food Chain concluded that GE was a potential health concern for all younger age groups with average exposure, and for consumers with high exposure in all age groups, with a particular concern for babies consuming solely infant formula.

In a statement on 13 January, Ferrero said “the presence of contaminants depends on the oils and fats used as well as the processes they are subjected to”. Specifically, Ferrero said it processed palm oil at a temperature just below 2000C at extremely low pressure to minimise contaminants.

Reuters said Ferrero was the only big European food company to mount such a public defence of palm oil, launching its advertising campaign in September.

Global Nutella sales were growing at 5-6% annually, said Ferrero, which ended its fiscal year to August with total revenue of US$10.5bn, of which a fifth came from Nutella sales.

Dr Kalyana Sundram, CEO of the Malaysian Palm Oil Council, said neither the EFSA nor any other national food safety authority had advocated a ban on the consumption or use of palm oil or any other vegetable oil.

“The occurrence of 3-MCPD and its glycidyl esters are found in all oils and fats. The Malaysian palm oil industry views the occurrence of the contaminants with much concern, although the actual risk to human health has yet to be clearly defined.

“Nevertheless, our industry is urgently improving processing technologies that should result in the reduction or elimination of these compounds.”

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NEWS

RSPO certified oil palm areas fall by 14% worldwide T

and there has been an overall 14% decrease in total global RSPO certified area in the same timeframe.

A 45% decrease in Malaysia’s certified area was due to IOI Group’s suspension from the RSPO (see News, OFI September/October 2016) and the Felda Group’s withdrawal from RSPO certification (see News, OFI July/August 2016).

“These changes, among other factors, may have contributed to the 16% drop in the annual production capacity of certified sustainable palm oil (CSPO) and an 18% drop in the annual

he Roundtable on Sustainable Palm Oil (RSPO) has reported an overall 14% fall in global RSPO-certified areas since 30 June 2015.

In its 2016 impact report released in January, the RSPO said that as of 30 June 2016, plantations covering a total of 2.83M ha worldwide were RSPO certified.

The total certified high conservation value (HCV) area covered 157,115ha, an increase of 9% from the last reporting period. The total production area cultivated by RSPO members has decreased by 21% since 30 June 2015

production capacity of certified sustainable palm kernel (CSPK) since December 2015,” the RSPO said.

However, the RSPO said the decreases in annual production capacities were only indicative, as its data was only inclusive up to 30 June 2016. “More positively, RSPO certified area in Latin America continues on an upward trend with a dramatic 65% (101,713ha) increase since June 2015.”

Overall, Indonesia and Malaysia still accounted for the major share of certified area, with a combined total of 2.3M ha (81%).

Canadian canola meal exports to China jumps

C

anadian canola meal shipments to China jumped to their highest level in five years from January to August 2016, the Globe and Mail reported on 14 November.

The country shipped 415,000 tonnes of canola meal to China worth CAD$132.1M (US$99M) in that period, the most since 2011 and following zero shipments in 2015, according to Canadian Oilseed Processors Association (COPA).

China had planned to lower

ISPO certifies two GAR units

I

ndonesia-based Golden AgriResources Ltd (GAR) announced on 10 December that two of its business units – PT Sinar Kencana Inti Perkasa and PT Bumi Sawit Permai – had received Indonesia Sustainable Palm Oil (ISPO) certification.

“With these latest certifications, GAR closes out 2016 with a total of 30 mills and palm oil estates supplying fresh fruit bunches to the mills that have now been ISPO certified,” GAR said. GAR said that in terms of land coverage, 182,296ha were now certified to ISPO as of December 2016.

The ISPO was created in 2011 by the Indonesian government to improve the competitiveness of Indonesian palm oil and to reduce deforestation and protect the environment.

the amount of foreign material (dockage) in Canadian canola imports from 2.5% to 1% as it was concerned that black-leg disease might spread from Canadian canola shipments to Chinese canola.

This dispute created additional demand for canola meal until it was resolved in September, the Globe and Mail said (see News, OFI November/December 2016).

Beijing has also increased tariffs on imports of US distillers’ dried grains (DDGs), a byproduct

Bunge acquires Turkey’s Ana Gida

B

unge announced on 15 December that it had agreed to acquire leading Turkish olive and vegetable oil producer Ana Gida Ihtiyac Maddeleri ve Sanayi Ticaret.

Ana Gida owns Komili, the leading olive oil brand in Turkey with a retail market share of more than 30%, Bunge said.

Ana Gida also produces Madra olive oil and Kirlangic olive, sunflower and corn oils.

Bunge would buy a 55.25% stake of Ana Gida from Anadolu Endustri Holding and the remaining 44.75% from SEEF Foods, and the deal was expected to be completed in the first quarter of 2017, Reuters reported.

The company was worth some 172.5M lira (US$49M) and the final sale price would be determined after year-end cash, debt and working capital corrections, according to Yazicilar Holding, the holding company of Anadolu Endustri Holding.

Bunge has been present in Turkey since 2000, processing and distributing domestically produced and imported oilseeds such as sunflower, canola and soyabean at several facilities, the Reuters report said.

“The acquisition will provide a strong vegetable oil portfolio across all price segments. This, combined with the existing distribution network of Ana Gida, will help Bunge to increase its reach and access to customers throughout Turkey,” Bunge said.

Ana Gida has two factories in Yarimca and Ayvalkik. The Yarimca site has an annual production capacity of 45,000 tonnes. The other facility is located in Ayvalik, the olive oil capital of Turkey, with 3,200 tonnes of storage capacity.

19-20 MAY 2017 OILS & FATS INTERNATIONAL INDIA 2017

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of corn-based ethanol used as an animal feed ingredient (see Biofuel News, p6).

This could also build demand for canola meal, the Globe and Mail report said. Strong meal demand had also lifted crushers’ profits.

COPA executive director Chris Vervaet said Canadian crushers had steadily expanded capacity, with Cargill opening a new Alberta plant in 2015, and Richardson International expanding a facility in the province.

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IN BRIEF UK: The Bank of England has said that the supplier of its new £5 note, Innovia, is working on “potential solutions” to the use of animal-based tallow in the banknote, BBC reported on 30 November.

A petition with more than 100,000 signatures has called on the Bank to “cease to use animal products in the production of currency that we have to use”, stating that tallow is “unacceptable to millions of vegans, vegetarians, Hindus, Sikhs, Jains and others”.

The new £5 note was introduced in September and is made of flexible polymer plastic.

It is the first Bank of England note to be printed on this material and is expected to last five years on average compared with two years previously.

INDIA: The Food Safety and Standards Authority of India (FSSAI) has set out standards for fortification of basic food items such as milk, wheat flour and cooking oil with micronutrients – including iron, folic acid, zinc, and vitamins A, D and B12 – and is also weighing up legislation to make some fortification compulsory, just-food reported on 25 November.

Kuldeep Sharma, founder of Suruchi Consultants in New Delhi, said the FSSAI was drafting new regulations that would insist primary food products were “fortified with Vitamin A and D”.

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NEWS

Top edible oil producers raided in South Africa

S

outh Africa’s Competition Commission has raided the premises of five top manufacturers of refined edible oils, margarine and baking fats accused of price fixing.

The commission said it had reasonable grounds to suspect Wilmar Continental Edible Oils and Fats; DH Brothers Industries (trading as Willowton Oil and Cake Mills); FR Waring Holdings; Africa Sun Oil Refineries and Epic Foods of cartel conduct, BakeryAndSnacks reported on 13 December.

IN BRIEF INDIA: Process filtration equipment company Sharplex Filters reported in January that it had received its first order for the world’s largest vertical pressure leaf filter (VPLF), which it designed six months ago.

Sharplex said up until it had designed its 142m2 vertical pressure leaf filter, the largest available worldwide was only up to 110m2.

Its first order of six 142m2 VPLFs had come from Adani Wilmar for its edible oil refinery in Mundra, Gujarat state and would be delivered within eight months, Sharplex said.

“Our VPLF will reduce the number of filters required for large capacity plants and therefore reduce the quantity of vales and piping considerably.”

BRAZIL: Denmark-based emulsifier specialist Palsgaard announced on 3 January that it had acquired the majority of shares of Brazilian food ingredients company Candon Aditivos para Alimentos in December 2016. Candon has been supplying a range of special ingredients, premixes and bakery emulsifiers to the food industry in Brazil since 2008.

USA: Rendering processing equipment supplier Dupps Company announced on 3 January that it had completed its acquisition of Clapper Corporation, a leader in protein co-products equipment service and distribution.

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companies had contravened the Competitions Act. Wilmar International said it took legal compliance very seriously and was cooperating with all parties to assist with the investigation.

Willowton said the company had been previously investigated but no evidence had been found of any wrongdoing and it refuted the allegations again. Epic Foods also denied any wrongdoing but said it was cooperating with the commission, the report said.

Cargill offering canola lecithin

C

argill is expanding its line of emulsifiers with the addition of deoiled canola lecithin, the company said on 20 December.

“With today’s announcement, Cargill now offers customers three plant-sourced lecithin options – soya, sunflower and canola – in the USA and Canada.”

The canola lecithin would help food manufacturers deliver product attributes consumers increasingly sought as it was a non-GMO option, could be used in organic products and did not have to be declared as a major

food allergen, Cargill said.

On 10 January, Cargill reported an 80% jump in operating earnings to US$1.03bn in its fiscal 2017 second quarter ending 30 November.

Net earnings for the quarter were US$986M, down 29% from US$1.39bn a year ago, when Cargill realised large gains from business divestitures.

Cargill said it had achieved good gains in sweeteners and edible oils in most regions.

Origination and processing earnings rose slightly, helped by performance in North America.

MP Evans sells plantation stake

T

he UK’s MP Evans Group Plc said on 6 December that it had agreed to sell its 37% stake in Indonesian oil palm plantation firm PT Agro Muko for US$100M as it continues to try and fight off a takeover offer from Malaysia’s Kuala Lumpur Kepong Bhd, reports Alliance News.

MP Evans said it was selling its stake to Belgian joint venture partner, Sipef group, which already holds a 47% interest in the company.

The sale price is worth US$13,860 per planted hectare in PT Agro Muko.

“The price strongly supports the independent valuer’s recent valuation not only of PT Agro Muko, but also of all the group’s other Indonesian assets, and provides another compelling reason to reject the KLK offer,” said Peter Hadsley-Chaplin, chairman of MP Evans.

MP Evans’ assets consist of oil palm plantations (both majority and minority held) in Indonesia and residential property development in Malaysia.

The company said the sale was in line with its strategy of selling off its minority-held Indonesian estates in favour of directly-managed projects and it was now looking at a prospective investment to replace “at least” the equivalent of the 7,200ha it held in PT Agro Muko.

MP Evans is also planning to sell its 38% share in PT Kerasaan, another Indonesian palm-oil joint venture with Sipef, comprising 2,300 planted hectares. Indonesia’s PT Austindo Nusantara Jaya TBK (ANJ) is also selling its 10.87% interest in PT Agro Muko to Sipef.

“As a result of these transactions, the SIPEF group will – with an interest of 95% – acquire exclusive control over PT Agro Muko,” the Belgian company said.

19-20 MAY 2017 OILS & FATS INTERNATIONAL INDIA 2017

Commissioner Tembinkosi Bonakele said the commission had been monitoring the oils and fats market and had noted some “worrisome” developments and the prices of some products increasing “at almost the same time”, the report said. The alleged price fixing was believed to have started before 2007.

BakeryAndSnacks said the commission had raided the companies’ premises in Gauteng and KawZulu-Natal, seizing documents, records and electronic data to determine if the

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Columbia to crush and refine organic and non-GM oils

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olumbia Grain Inc is entering the crushing and refining business of high-value organic and non-GMO oil in the USA by buying a stake in Montana Specialty Mills LLC (MSM), the company announced on 26 December.

“Over many years, MSM has been originating canola, mustard seeds and other agricultural products from farmers in Montana and producing organic edible oils and mustard products which it sells across the United States,” Columbia said.

“MSM will increase its production capacity by constructing a new state-of-the-art oilseed crushing facility in Great Falls, Montana this year to meet the rapidly expanding demand for organic and non-GMO food products in the United States.”

The facility would have a crushing capacity of 182 tonnes/ day and a refining capacity of 60 tonnes/day.

Columbia said its origination and storage capabilities would allow MSM to secure a stable supply of canola and other crops.

It would also be able to utilise its grain elevators more efficiently, generating synergies between the two companies.

Columbia is a 100% owned subsidiary of Japanese trading company Marubeni Corporation, which has operations in food and consumer products; chemical and forest products; energy and metals; power projects; and transportation and industrial machinery.

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BIOFUEL NEWS

IN BRIEF THAILAND: Japanese synthetic fibres giant Toray Industries is planning to spend 5-6bn yen (US$42.5-51M) to build one of the world’s largest plants for processing bagasse – a byproduct of sugarcane processing – into biofuel, reported Nikkei Asian Review on 5 January.

Toray would form a joint venture with Japan’s Mitsui Sugar, with Toray owning 67% and Mitsui Sugar holding 33%.

The plant in Udon Thani province was scheduled to begin operations in August 2018 and would have the capacity to produce 1,400 tonnes/year of cellulose sugar for bioethanol, along with 450 tonnes of oligosaccharides and 250 tonnes of polyphenol for foods and fodder.

DENMARK: The government has set a 0.9% blending mandate for use of advanced biofuels made from waste materials, such as straw, to be effective by 2020 and applied to the country’s transportation sector, Biofuels Digest reported on 18 December.

BRAZIL: Caramuru Alimentos will build a US$7.5M, 104M litres/year biodiesel plant at its industrial complex in Sorriso, Mato Grosso state, its third in the country. Biofuels Digest reported on 3 January.

Caramuru’s other two plants are in Goiás state, with a capacity of 450M litres/year.

THE NETHERLANDS: Finland’s Neste Corporation announced on 27 December that it is buying a former biodiesel plant in Sluiskil, the Netherlands which it will use to store and pre-treat raw materials.

“Many new raw materials are wastes and residues that are difficult to process and they require good pre-treatment before renewable diesel or aviation fuel can be produced from them.”

Neste said it aimed to complete the deal in first quarter 2017.

China increases tariffs on US ethanol and by-product DDGS

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hina has increased tariffs on US ethanol and its by-product – distillers’ dried grains (DDGS) – to protect its domestic industry, in a move that could escalate a trade dispute between the world’s two largest economies.

In a ruling on 11 January, the Commerce Ministry announced that anti-dumping duties on DDGS – used for animal feed – would range from 42.2%-53.7%, up from 33.8% in its preliminary decision in September, Reuters reported. Anti-subsidy tariffs would range from 11.2%-12%, up from 10%-10.7%.

The decision comes 10 days after the Chinese government increased tariffs on imported US ethanol from 5% to 30%.

China said it found that its domestic DDGS industry had “suffered substantial harm” due to subsidised imports from the USA.

Court dismisses challenge over Argentine imports

A

US appeals court has dismissed a challenge filed by the National Biodiesel Board (NBB) against the Environmental Protection Agency (EPA)’s decision to allow Argentinian biodiesel to qualify for US renewable fuel credits, Platts reported on 20 December.

The NBB had argued that Argentinian producers were not being held to the same environmental standards as others and US producers were suffering as a result of increased competition.

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The case dates back to January 2015, when the EPA approved a tracking programme to demonstrate that Argentinian biodiesel imports complied with US Renewable Fuel Standard requirements.

Platts said the tracking programme identified lands cleared or cultivated before 2007, using historical NASA satellite images and designated zip codes as either eligible or ineligible. When feedstock arrived at crushing plants, each shipment’s paperwork was

inspected to make sure the crops were grown in an eligible zip code.

The NBB had argued that the satellite methodology was untested and had wide room for error when used on specific plots of land, rather than in aggregate.

The US Court of Appeals for the District Columbia Court said NASA’s Lansat satellite programme was the longest continuous space-based record of Earth’s land. “These do not strike us as markers of an unproven technology.”

Petrobras divests ethanol and sugar stakes

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razil’s state-run oil company Petrobras has sold its 45.97% stake in sugar and ethanol producer Guarani SA for US$202M to French sugar group Tereos Internacional, Petrobas announced on 28 December.

Guarani is one of the leading companies in the Brazilian sugar and ethanol market, ranked third among the largest sugar producers in the country.

It has eight industrial units – seven in Brazil (with a combined production capacity of 1.7M tonnes of sugar and 900M litres/year of ethanol) and one in Mozambique. Also announced was the sale of petrochemical subsidiaries – Petroquimica Suape and Citepe – to Mexican company Alpek for US$385M. The move follows on from Petrobras’ announcement on 15 December that it had agreed to sell its 49% stake in sugar and ethanol joint venture Nova Fronteira Bioenergia SA to its partner

19-20 MAY 2017 OILS & FATS INTERNATIONAL INDIA 2017

US Grains Council president and CEO Tom Sleight said the group was “deeply disappointed” by the news.

“While painful and damaging to the US DDGS industry, [the tariffs’] biggest negative impact will ultimately be on China’s feed and livestock industries, which risk losing access to an important and cost-effective feed ingredient.”

China is the world’s top buyer of DDGS, purchasing almost all of its needs from the USA, the largest exporter, according to Reuters.

US companies hit by the new tariffs included global traders ADM and Louis Dreyfus, biofuel producer Poet LLC, oil refiner and ethanol producer Valero Energy Corp and grains group Andersons Inc, Reuters said.

The new tariffs will be in force for five years.

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São Martinho SA. Petrobras would receive 24M new São Martinho shares as payment for the stake, worth some US$133M, Reuters reported. São Martinho is primarily a sugar and ethanol producer and is a subsidiary of Ljn Participacoes SA. In September last year, Petrobras said that it was exiting the biofuels sector as part of a divestments programme to reduce its debts. It said it had sold US$13.6bn of assets in 2015-2016, below the US$15.1bn target set for the two-year period.

“This failure to meet the target is explained by the company’s obligation to comply with the preliminary injunction of the Sergipe Court that blocked the completion of the negotiations for sale of the Tartaruga Verde and Baúna fields, which were already at an advanced stage.”

Petrobras said the divestments target in 20172018 would rise to US$21bn from US$19.5bn.

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BIOTECH NEWS

ChemChina-Syngenta merger decision delayed

T

he European Commission (EC) has delayed its ChemChina-Syngenta merger decision for a second time by 10 working days to 12 April.

Swiss pesticides and seeds group Syngenta said the two companies had asked for the extension to allow “sufficient time for the discussion of remedy proposals”.

The EC launched an antitrust investigation into state-owned ChemChina’s US$43bn bid in October, saying the companies had not allayed concerns over the deal.

Commissioner Margrethe Vestager, in charge of competition policy, said last year that: “This deal would lead to the combination of a leading crop protection company with one of its main generic competitors. Therefore we need to carefully assess whether the proposed merger would lead to higher prices or a reduced choice for farmers”.

The proposed merger would combine

IN BRIEF SOUTH AFRICA: The government has approved GM corn imports from the USA for the first time after its worst drought in 104 years cut local production, reported Bloomberg in December.

Both white and yellow US GM corn imports had been approved, said Dirk Kok, a spokesman for South African Cereals and Oilseeds and Trade Association.

“The door is open to imports from the US,” said Kok, who predicted that local prices would go down as a result.

By the end of April, South Africa could import 300,000 tonnes of GM white corn and 500,000 tonnes of yellow corn from the USA, according to Wandile Sihlobo, the head of economic and agribusiness intelligence at the Agricultural Business Chamber.

White corn is used to make a local staple porridge and yellow corn for animal feed.

The move has drawn opposition from domestic farmers, with Grain SA CEO Jannie de Villiers saying that local corn farmers faced unfair completion because American farmers had better access to technology.

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3 February and other competition authorities, including in Brazil, Canada and the USA, are also investigating the deal.

ChemChina is active in the agrochemical sector through its agrochemical division China National Agrochemical Corporation (CNAC) and its wholly-owned subsidiary Adama Agricultural Solutions.

Adama is an Israeli company which manufactures and distributes off-patent crop and pest protection products, and sells active ingredients to other crop protection producers.

Also under review in the seed and crop protection sphere is the US$130bn merger of US chemicals giants Dow Chemical and DuPont; and German chemicals firm Bayer’s US$66bn acquisition of US seeds giant Monsanto (see story below and Biotech News, OFI January 2017 and November/December 2016).

Origin gains access to DuPont’s non-GM corn seed

C

hinese biotech company Origin Agritech Ltd announced on 3 January that it had signed an agreement with DuPont Pioneer to gain access to nonGM corn seed products for sale to the US market.

The DuPont Pioneer business’ corn seed would be available to US farmers through Origin for the 2017 spring planting, the company said.

“This agreement with DuPont Pioneer is a critical first step toward launching Origin’s North

America strategic Pillar III, focused on serving the non-GM/ organic markets,” said Origin CEO Bill Niebur.

“We look forward to offering these products to US farmers through a novel, digitally-enabled route to market while building a platform from which Origin can continue to grow.”

Beijing-based Origin was founded in 1997 and specialises in crop seed breeding and genetic improvement, seed production, processing,

distribution, and related technical services. It focuses on hybrid development in corn, rice and canola. In 2009, its phytase corn was the first GM crop approved for production in China. In 2015, it began to implement its plan to launch the first GM Chinese corn products overseas and test its technology in the USA. In April 2016, Origin and DuPont Pioneer also signed a commercial agreement to jointly develop new seed technologies in China, World-Grain said.

Monsanto shareholders approve Bayer merger

M

onsanto shareholders overwhelmingly approved a US$66bn takeover by German chemicals giant Bayer AG, a deal that would create the world’s largest seeds and pesticides company.

Monsanto said on 13 December that preliminary results showed that 99% of all shareholder votes cast favoured the merger, announced on 14 September.

Under the terms of the merger agreement, Monsanto shareowners will receive US$128 per share in cash at the closing of the deal.

“We are pleased we received such strong support from our shareowners,” said Monsanto CEO and chairman Hugh Grant.

Bayer CEO Werner Baumann said the acquisition “is driven by our belief that this combination can help address the growing challenges facing farmers and the agriculture industry today and in the future.”

The merger is subject to conditions, including required regulatory approvals, and Monsanto said it

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Syngenta, one of the main global seeds and crop protection companies, and ChemChina, which controls Adama, the largest supplier of generic crop protection products in Europe.

The EC said Syngenta and ChemChina – through Adama – each had strong, partially overlapping portfolios of crop protection products including herbicides, insecticides, fungicides and plant growth regulators, used for the cultivation of cereals, cotton, corn, fruits and vegetables, rapeseed, soyabean, sugarbeet and sunflowers.

As well as looking into reduced competition in a number of crop protection markets, the EC is also examining whether the merger may negatively affect Syngenta’s and ChemChina’s supply of active ingredients, which are the key chemical input for other manufacturers to make crop protection products.

The merger was first announced on

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expected the deal to close by the end of this year.

Monsanto reported a fall in net sales for the 2016 fiscal year to US$13.5bn from US$15bn in 2015, due primarily to currency headwinds and price declines in agricultural productivity.

Net sales for seeds and genomics were US$9.9bn for 2016, compared with US$10.2bn in 2015.

However, it reported better-than-expected results for fourth quarter 2016 as a result of higher sales of its corn and soyabean seeds.

Sales of soyabean seeds jumped 54% and sales of corn seeds rose 34% in its fourth quarter compared to the same period in 2015. In total, Monsanto reported a loss of US$191M in the fourth quarter, compared with a loss of US$495M a year ago.

Anticipated gross profit growth in the seeds and genomics segment was expected to be driven by increased penetration of soyabean technologies and improved costs of goods sold.

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TRANSPORT & LOGISTICS NEWS

G3 builds new export terminal in Canada

A

new export grain terminal in North Vancouver, British Columbia will be built

by G3 Terminal Vancouver, the company announced on 21 December.

It would be the first new grain terminal constructed at the Port of Vancouver since the 1960s and would be able to handle cereal grains, oilseeds, pulses and special crops.

Construction is due to start in March with a scheduled completion date in 2020.

“Our Vancouver terminal is central to G3’s vision of a coast-to-coast grain handling network that sets a new standard in efficiency,” said G3 CEO Karl Gerrand. “We plan to transform the movement of grain through the west coast, providing Canadian farmers with competitive pricing and reliable delivery opportunities.”

The G3 Vancouver terminal will feature a rail loop track that will be capable of holding

IN BRIEF RUSSIA: State-owned agricultural firm United Grain Company is planning to build a 10M tonnes/year grain terminal in the Far Eastern port of Zarubino, reported UkrAgroConsult on 12 December.

In stage one due to begin next year, US$290M will be spent to build facilities for up to 3M tonnes/year of grain including a berth capable of receiving Panamax and PostPanamax vessels and a silo park. Completion is expected by 2020. In stage two scheduled for completion by 2023, grain storage will be increased to 10M tonnes and additional berths and other facilities constructed.

The third stage would begin after 2020 and involve further expansion of handling volumes.

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three 134-car trains, unique to grain exporting terminals in Canada.

It includes over 180,000 tonnes of storage and the grains, oilseeds and pulses it will handle will be chiefly supplied via a throughput agreement with G3 Canada Limited.

“This will allow trains to travel to Vancouver, unload while in continuous motion, and travel

back to G3 Canada’s primary elevators – including four recently constructed primary elevators – without detaching from their locomotives, critical to increasing supply chain efficiency,” G3 said.

G3 Terminal Vancouver is an affiliate of G3 Global Holdings, a limited partnership between SALIC Canada Limited and Bunge Canada. Its holdings include G3 Global Grain Group, the parent company of G3 Canada Limited; and G3 Terminal Vancouver.

G3 Canada Limited’s assets include primary grain elevators and port terminals stretching from Leader, Saskatchewan to Québec City, Québec; a Great Lake grain transport vessel; and the largest private fleet of grain hopper cars in Canada.

G3 Terminal Vancouver is a limited partnership between G3 Global Holdings and Western Stevedoring Company Limited.

Expansion project at Giurgiulesti port completed

A

subsidiary of Trans-Oil Group (TOG) – Moldova’s only oilseed crusher and edible oils exporter – marked the completion of a grain export terminal expansion project at Giurgiulesti International Free Port last November.

Trans-shipment capacity at Trans Cargo Terminal SRL has more than doubled, and it is now able to load more than 1,000 tonnes/hour of grain onto maritime vessels and river barges – the fastest loading rate of any grain terminal in the region.

TOG president Vaja Jhashi said the US$6M expansion project involved construction of an additional berth on the Danube river, the erection of a silo with a storage capacity of 12,000 tonnes, the building of a new deep water jetty and the installation of high-capacity loading equipment.

“The expanded facility has a total grain storage capacity of 70,000 tonnes and has increased the trans-shipment capacity from 300,000 tonnes to 800,000 tonnes/year, which is equivalent to about 75% of the Moldova’s annual grain exports”.

Giurgiulesti in south Moldova is the country’s

only international port and only port located on the maritime section of the river Danube.

TOG has activities in farming, grain handling and storage and flour and vegetable oil and meal production.

According to its website, it is Moldova’s only oilseed crusher with a total crushing capacity of some 300,000 tonnes/year of sunflowerseed.

The group runs two crushing plants with a total throughput of 1,500 tonnes/day.

It said it was the only producer and exporter of sunflowerseed and soyabean meal in Moldova and the only exporter of soft oils, as well as producing bottled sunflowerseed oil.

The group has 14 elevators and 84 offices in the country offering tolling services where farmers could bring in sunflowerseeds for processing into oil and meal.

TOG offers port terminal handling services and trades commodities including wheat, barley, corn and rapeseed with countries such as Kazakhstan, Russia, Ukraine and USA and those in Europe.

OTEKO and Louis Dreyfus to build terminal in Russia’s Taman port

R

ussia’s JSC United Forwarding Company (OTEKO) is planning to partner with global agribusiness giant Louis Dreyfus to build a 14.5M tonne grain terminal in the Russian port of Taman, reports UkrAgroConsult.

An opening date in the first half of 2019 was expected, with an investment of 6bn rubles (US$92.5M) in the project by 2020, the report said.

The port of Taman is located along the Black

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Sea coast of Taman Peninsula, close to Kerch Straits.

According to the EISA Novorossiysk website, the port operates two out of three jetties – a petroleum products jetty and a grains and edible oils terminal for the export of grain cargoes and the import and export of vegetable oils.

In June last year, OTEKO signed a series of cooperation agreements with Federation

State Unitary Enterprise (FSUE) Rosmorport to develop port infrastructure facilities at Taman port, the Rosmorport website stated.

This involved building facilities at the Taman bulk cargo terminal of OOO OTEKO-PortServis; the Taman grain terminal of OOO Taman Agroholding; the Taman oil terminal; and Taman LPG base of ZAO Tamanneftegaz.

UkrAgroConsult said OTEKO planned to invest US$2bn over the entire port upgrade period.

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

IN BRIEF ITALY: Bio-on Spa announced on 22 December that it had signed a contract worth €55M with a major multinational which is aiming to replace conventional plastic with biodegradable biopolymers within the next three years. The biopolymer will be produced using Bio-on’s process to produce polyhydroxyalkanoates (PHAs) from agricultural waste, in this case from co-products of the sugar industry and the production of starch and its derivatives.

The deal will see the construction of a series of PHA bioplastic production plants for an overall output of 100,000 tonnes/year. Each plant will have a potential production capacity of 10,000-30,000 tonnes/year and will be built in Europe and Asia according. All the bioplastic produced will be used by the multinational to create finished products ready for sale.

CHINA: Dutch biosuccinic acid producer Reverdia reported late last year that it was partnering with Hangzhou Xinfu Science & Technology Co, which will use its Biosuccinium acid to produce biobased polymers, derivatives and new biomaterials for packaging applications. Reverdia is a joint venture between life and material sciences company Royal DSM and French starch and starch derivatives company Roquette Frères.

Huntsman completes sale of European surfactants business G

lobal speciality chemicals company Huntsman Corporation announced on 30 December that it had completed the sale of its European surfactants business to Innospec Inc for US$225M. Innospec will acquire Huntsman’s manufacturing facilities in Saint-Mihiel, France; Castiglione delle Stiviere, Italy; and Barcelona, Spain.

The business comes with sales revenues of around US$230M and Innospec has said it would allow it to expand its product line in surfactants for personal and

home care.

“We were always aware that in order to fulfil our vision to ‘take up more space in the bottle’ of cosmetics and toiletries, we must meet a wider range of customer needs,” said Samantha Thistleton, marketing manager of Innospec Performance Chemicals, in a Cosmetics-Design-Europe report.

Huntsman said it planned to make a US$260M early repayment of debt using proceeds from the sale and existing cash, which was in addition to recent debt reductions of US$200M in 2016.

“By completing the sale of this business, we are executing our plan to focus on businesses within our portfolio with a greater long-term strategic fit, while continuing to grow our downstream differentiated businesses,” Huntsman president and CEO Peter Huntsman said.

“We retained certain core products strategic to our global agrochemicals, lubes and other businesses and entered into supply and long-term tolling arrangements with Innospec to allow us to continue marketing some of these products.”

BioAmber to produce bio-succinic acid in China

U

S sustainable chemicals company BioAmber Inc plans to enter a joint venture with South Korean food company CJ Cheil Jedang Corporation (CJCJ) to produce up to 36,000 tonnes/year of bio-succinic acid in China.

The joint venture would retrofit an existing fermentation plant with BioAmber’s succinic acid technology, with CJCJ incurring the capital costs for the retrofit. Production would begin in first quarter 2018 and the partners would also have a mutual right-of-first-refusal to retrofit additional CJCJ fermentation facilities if market demand increases.

“While we remain focused on ramping up our Sarnia plant in Canada and building a second plant in North America, this joint venture is an opportunity for BioAmber to accelerate the deployment of its bio-succinic acid technology on a global scale without capital investment, allowing us to quickly

penetrate the Chinese and broader Asian market,” said BioAmber CEO Jean-Francois Huc in December.

Succinic acid can be used to produce a wide range of products including polyurethanes; paints and coatings; adhesives; sealants; artificial leathers; food and flavour additives; cosmetics and personal care products; biodegradable plastics; nylons; industrial lubricants; dyes and pigments; and pharmaceutical compounds.

CJCJ – which produces fermentation-based products such as feed amino acids, monosodium glutamate and nucleotides – will own 65% of the joint venture and BioAmber the remaining 35%.

BioAmber’s first commercial plant in Sarnia, Ontario began commercial shipments of bio-succinic acid in October 2015. A second North America plant is expected to begin production in late 2019 or early 2020.

Amyris to set up cosmetics joint venture with Japan’s Nikkol Group

U

S industrial bioscience company Amyris Inc announced on 13 December that it had signed an agreement to set up a cosmetic ingredients joint venture with leading Japanese cosmetic speciality chemical provider, the Nikkol Group.

Nikkol is buying 50% of the Amyris Neossance business for up to US$20M. “Nikkol has been involved in the sugarcanebased squalene business since the product’s inception by Amyris and we believe this is an opportune time to join forces,” said Nikkol Chemicals Co president & CEO Shizuo Ukaji.

The personal care ingredients supplier

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has been a long-term distributor of Amyris’s cosmetic ingredients in the Japanese market.

“NIKKOL is the leading channel partner for our squalene business,” said Amyris president and CEO John Melo. “This aligns with our strategy to partner with the world’s leading companies to accelerate our product sales while lowering our operating costs. We expect squalene sales to grow at better than 50%/ year while our expenses will be reduced by over US$1.5M/year as a result of this partnership.”

At the same time as the Nikkol deal, Amyris also announced that it had paid US$4.35M to buy the Glycotech facility in North Carolina,

USA, which had been converting its farnesene into squalene since 2011.

Squalene is a natural 30-carbon organic compound originally derived from shark liver oil although plant sources such as vegetable oils are now used. It is an ingredient in personal care and cosmetic products.

According to Biofuels Digest, the global market for squalene is US$150M but has been falling due to concerns over the growing annual shark kill volume.

Amyris’ manufactures squalene from sugarcane via a two-step synthetic biology process.

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DIARY OF EVEN TS

6-8 MARCH 2017

17-19 MAY 2017

28th Annual Palm and Lauric Oils Conference & Exhibition: Price Outlook Conference 2017/2018 (POC 2017) VENUE: Shangri-La Hotel, Kuala Lumpur, Malaysia CONTACT: POC2017 Secretariat, Malaysia Email: poc@bursamalaysia.com Website: www.pocmalaysia.com

27-30 MARCH 2017

OFI India 2017 VENUE: Bombay Convention and Exhibition Centre (BCEC), Mumbai, India CONTACT: Mark Winthrop-Wallace, Sales Manager, OFI, UK Tel: +44 1737 855 114 E-mail: markww@quartzltd.com Website: www.ofievents.com/india

26-27 APRIL 2017 7th European Algae Industry Summit VENUE: Nice, France CONTACT: Jasmine Okure, ACI, UK Tel: +44 203 141 0647 E-mail: jokure@acieu.net Website: www.wplgroup.com/aci/event/ european-algae-industry-summit/

31 MAY - 3 JUNE 2017 17th EFPRA Congress 2017 VENUE: Empire Riverside Hotel Hamburg, Germany CONTACT: INTERPLAN Congress, Meeting & Event Management AG, Germany Tel: +49 40 32 50 92 57 Fax: +49 40 32 50 92 44 E-mail: efpra2017@interplan.de Website: www.efprahamburg2017.com

27-28 APRIL 2017 4th Annual Congress and Expo on Biofuels and Bioenergy VENUE: Dubai International Convention and Exhibition Centre, UAE CONTACT: ConferenceSeries LLC, USA E-mail: biofuelsconference@chemseries.com Website: http://biofuels-bioenergy. conferenceseries.com/middleeast/

7th International Conference on Algal Biomas, Biofuels and Bioproducts VENUE: Hyatt Regency Hotel, Miami Florida, USA CONTACT: Janet Seabrook, Elsevier Conferences, UK Tel: +44 1865 843691 E-mail: JM.Seabrook@elsevier.com Website: www.algalbbb.com

108th AOCS Annual Meeting VENUE: Rosen Shingle Creek, Orlando Florida, USA CONTACT: AOCS Meetings Department, USA Tel: +1 217 6934821 Fax: +1 217 6934865 E-mail: meetings@aocs.org Website: www.annualmeeting.aocs.org

27-30 AUGUST 2017 15th Eurofedlipid Congress VENUE: Uppsala Konsert & Kongress Uppsala, Sweden CONTACT: Eurofedlipid, Germany Tel: +49 69 79 17 533 Fax: +49 69 79 17 564 E-mail: info@eurofedlipid.org Website: www.eurofedlipid.org/meetings/ malmoe2017/index.php

5-6 SEPTEMBER 2017 4th High Oleic Oils International Congress VENUE: Bucharest, Romania CONTACT: FAT & Associés, France Tel: +33 567 339 206 Fax: +33 567 339 203 Website: www.higholeicmarket.com/ hoc-2017/

17th AOCS Latin American Congress and Exhibition on Fats and Oils VENUE: Grand Fiesta Americana Coral Beach Hotel, Cancun, Mexico CONTACT: AOCS Meetings Department, USA Tel: +1 217 6934 821 Fax: +1 217 6934 865 E-mail: meetings@aocs.org Website: www.annualmeeting.aocs.org

12-14 SEPTEMBER 2017

28-29 JUNE 2017 Oleofuels 2017 VENUE: Kraków, Poland CONTACT: Marta Kielerska, ACI, Poland Tel: +48 61 6467058 E-mail: mkielerska@acieu.net Website: www.wplgroup.com/aci/event/ oleofuels/

11-12 MAY 2017 OTAI-FSSAI Conference: 1st Summit on Compliance Across Food Value Chain VENUE: Taj Palace, New Delhi, India CONTACT: Ajay Singh, Coordinator Tel: +91 9811 1133 85 E-mail: ajay@otaiconference.com Website: www.otaiconference.com

oils+fats International Trade Fair for Technology and Innovations VENUE: Messe München, Munich, Germany CONTACT: Messe München, Germany Tel: +49 89 94911328 E-mail: info@oils-and-fats.com Website: www.oils-and-fats.com/index-2.html

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

19-20 MAY 2017

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8th European Symposium on Plant Lipids VENUE: Scandic Hotel Triangeln Malmö, Sweden CONTACT: Eurofedlipid, Germany Tel: +49 69 7917 345 Fax +49 69 7917 564 E-mail: amoneit@eurofedlipid.org Website: www.eurofedlipid.org/meetings/ malmoe2017/index.php

11-14 SEPTEMBER 2017

18-21 JUNE 2017

30 APRIL - 3 MAY 2017

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7th ICIS World Surfactants Conference VENUE: Hyatt Regency, Jersey City, USA CONTACT: Georgina Shillito, Conference Producer, ICIS, UK Tel: +44 20 8652 3641 E-mail: georgina.shillito@rbi.co.uk Website: www.icisconference.com/ worldsurfactants

19-20 MAY 2017

12th Annual World Bio Markets VENUE: The NH Hotel Krasnapolsky, Amsterdam, the Netherlands CONTACT: Green Power Conferences, UK Tel: +44 20 7099 0600 Website: www.worldbiomarkets.com

OILS & FATS INTERNATIONAL INDIA 2017

2-5 JULY 2017

Bombay Convention & Exhibition Centre (BCEC) Mumbai

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DI ARY O F E V E NT S

www.dsengineers.com

OFI India 2017 19-20 May 2017, Mumbai

O

FI India 2017 will be held on 19-20 May 2017 at the Bombay Convention and Exhibition Centre in Mumbai and features:

An international exhibition of suppliers, producers and processors The OFI India 2017 Business Congress & SOPA Soya Conference: ‘New Strategies, New Approaches’ A Smart Short Course technical programme: ‘Advanced Extraction, Processing and Use of Sunflower, Cottonseed, Canola and Palm Oil’ Turn to p34 to find out more

For sales & sponsorship, contact:

Mark Winthrop-Wallace, Sales Manager E-mail: markww@quartzltd.com. Tel: +44 (0) 1737 855 114 Anita Revis, Sales Consultant E-mail: anitarevis@quartzltd.com. Tel: +44 (0) 1737 855 068 Erik Heath, Chinese Sales Executive E-mail: erikheath@quartzltd.com. Tel: +44 (0) 1737 855 108 Nikunj Vishwakarma, India Sales Executive E-mail: nikunj@quartzltd.com. Tel: +91 6735 1022, +93 7351 7070

www.ofievents.com/india 3-5 OCTOBER 2017 PALMEX Indonesia VENUE: Santika Premiere Dyandra Hotel & Convention, North Sumatra, Indonesia CONTACT: PT Fireworks Indonesia Tel: +62 21 26051028/+6 21 26051029 E-mail: info@asiafireworks.com Website: www.palmoilexpo.com

23-27 OCTOBER 2017 National Renderers Association 84th Annual Convention VENUE: Ritz-Carlton, San Juan, Puerto Rico CONTACT: Marty Covert, National Renderers Association, USA Tel: +1 703 683 0155 E-mail: co@martycovert.com Website: www.nationalrenderers.org/events/calendar/

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14-16 NOVEMBER 2017 PIPOC 2017 VENUE: Kuala Lumpur Convention Centre, Kuala Lumpur, Malaysia CONTACT: Malaysian Palm Oil Board E-mail: pipoc2017@mpob.gov.my Website: http://pipoc.mpob.gov.my

6-9 MAY 2018 109th AOCS Annual Meeting VENUE: Minneapolis, USA CONTACT: AOCS Meetings Department, USA Tel: +1 217 693482; Fax: +1 217 6934865 E-mail: meetings@aocs.org Website: www.annualmeeting.aocs.org 15 OFI – www.ofimagazine.com

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Engineers & Contractors Brussels • Belgium Tel.: +32 (0)2 634 25 00 Fax: +32 (0)2 634 25 25 info@dsengineers.com

Reliability through Experience

02/02/2017 10:33

H EALTH & N UTRITION

IMAGE: CHARLOTTELAKE/ADOBE STOCK

Pick of the bunch WHETHER A VEGETABLE OR ANIMAL OIL OR FAT IS CONSIDERED ‘HEART HEALTHY’ DEPENDS ON THE PERCENTAGES OF SATURATED, MONOUNSATURATED AND POLYUNSATURATED FATTY ACIDS THAT IT CONTAINS. SATURATED FATS HAVE LONG BEEN ASSOCIATED WITH AN INCREASED RISK OF CORONARY HEART DISEASE, BUT WHAT ARE THE HEALTHIEST ALTERNATIVES?

No two edible oils or fats are exactly alike. Aside from taste and utility, Rose Hales investigates what else seperates one from another and ultimately which is the healthiest and best oil to use

A

lthough the question of which oil is healthiest seems a simple one, there are a variety of factors that affect the health benefits or negative implications of oils, depending, for example, on their use and the temperature they are used at. In order to answer this question, one must consider the composition of fatty acids present in each oil or fat; the scientific assessments of the pros and cons of saturated versus unsaturated fats; an oil’s performance when subjected to high heats; vitamin and antioxidant content; the effect each has on chronic diseases such as high cholesterol, heart disease and diabetes; and the various other health claims purported.

Composition and fatty acids Fatty acids, which are chains of carbon atoms, differ from each other in the number of carbon atoms and double bonds they contain. There are 21 types of fatty acid found in the diet, which fall

into three categories: polyunsaturated (PUFAs), monounsaturated (MUFAs) and saturated (SFAs) fat. They are distinguished by the number of doublebonds they contain.

Polyunsaturated fats contain two or more carbon-carbon double bonds. Monounsaturates contain one carbon-carbon double bond and have a higher melting point than PUFAs but a lower melting point than saturated fats. They are liquid at room temperature although solid or semi-solid when refrigerated. Saturated fats do not contain any double bonds between carbon atoms and have higher melting points, making them solid at room temperature.

Vegetable oils are nearly 100% fat, and fat is an essential nutrient for the body as it is part of all cell membranes. Humans can create MUFAs and SFAs in the body, but are not capable of producing PUFAs. This distinction leads to the definition of ‘essential fatty acids’ such as linoleic acid and a-linolenic acid, which must be provided by the diet.

Although the distinction between PUFAs, MUFAs and SFAs appears simple, it does not fully split oils

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H E ALT H & NUT R I TI O N

Clean and efficient

into either healthy or unhealthy.

Crudely, corn oil and sunflower oil contain a high percentage of polyunsaturated fats; rapeseed oil, olive oil, goose fat and lard are high in monounsaturated fats; and coconut oil and butter are high in saturated fats.

Table 1 (following page) shows the percentages of fat types in some major oils.

According to the American Heart Association, ‘bad fats’ include trans and saturated fat, while ‘healthy fats’ are MUFAs and PUFAs. It recommends replacing the bad fats with healthier fats to improve heart health. In particular this includes canola, corn, olive, peanut, safflower, soya and sunflower oils, instead of butter, lard, palm and coconut oil. These are oils that contain 4g or less of saturated fat per tablespoon, as well as no partially hydrogenated oils or trans fats.

vacuum systems for refining and deodorising

ICE Ice condensation

Saturated fat and CHD risk It has long been thought that the consumption of saturated fats in the diet is linked to coronary heart disease (CDH) risk. The report ‘Saturated fat and heart disease: The latest evidence’, written by Adela Hruby and Frank B Hu and published in Lipid Technology in January 2016, considers the latest information on the link between the two. It refers to two large meta-analyses published in 2014 and 2015, which claimed to conclude that there was not an association between saturated fat intake and CHD. Hruby and Hu’s paper examines the controversies and evidence that support how limiting SFAs and replacing them with healthier dietary fats and carbohydrates can lower CHD risk.

The report concludes that, “the connections between high saturated fat intake and CHD risk are real, supported by decades of mechanistic and epidemiological research.” It advises a continuation of the current dietary guidelines in the USA that SFAs should make up 10% or less of energy intake for optimal cardiovascular health.

In terms of oil intake, the report recommends replacing SFAs found in certain tropical oils (including palm kernel and coconut oils) and dairy forms with healthier polyunsaturated and monounsaturated fats such as olive oil.

Canola oil – in particular omega-3 enriched canola oil – has been associated with benefits including decreased risk of cardiovascular disease, reduced belly fat and improvement in metabolic syndrome. Metabolic sydrome is a combination of abdominal obesity, high blood pressure, abnormal cholesterol and high blood sugar. News Medical reported on the results obtained by scientists at the University of Granada, the CIDAF, and the Richardson Centre for Functional Foods and Nutraceuticals at Canada in November 2016, in which it was found that consuming high-oleic canola oil enriched with omega-3 significantly reduces the concentration of triglycerides in the blood and reduces the risk of cardiovascular disease.

Around the same time, researchers from the University of Manitoba Canada, Laval University Canada and Penn State University USA, announced findings that suggest canola and high-oleic canola oil can help decrease abdominal fat, which in turn may improve metabolic syndrome. In the trial, conducted with 101 participants with central obesity and at least one additional risk factor for metabolic syndrome, researchers saw a significant decrease in the abdominal fat mass in participants who consumed canola and high-oleic canola oil as part of the study. A decrease in blood pressure was also observed.

Canola oil has the least saturated fat of any oil, the most plant-based omega-3 fat and contains mostly monounsaturated fat. The researchers say the use of oil containing mostly MUFAs, “could help to have a significant impact on public health”.

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Vitamins in oil Vitamins are understood to be necessary compounds that the human body needs for growth and to function. These cannot be produced by the body and must be obtained from food. Although it can be agreed that vitamin intake is essential for health, the various specific claims of what each vitamin can do beyond normal health and body function is questionable.

The vitamin content of different oils varies and although many claims have been made of the positive effects of specific vitamin consumption, trials and research often fail to find consistent correlations.

Palm oil, soyabean and sunflower oils are reported to be high in Vitamin E, which some claim acts as an antioxidant, aids eye health and neurological functions.

Anything that contains antioxidants can inhibit the oxidation of other molecules. Oxidation creates free radicals, which leads to chain reactions that 17 OFI – www.ofimagazine.com

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damage cells. These chain reactions are terminated by antioxidants.

The US Department of Health & Human Services Office of Dietary Supplements’ fact sheet on Vitamin E considers these claims. It concludes that the available evidence on vitamin E’s involvement in eye health is inconsistent, in particular with regards to whether is can reduce the risk of a person developing age-related macular degeneration (AMD) or cataracts, although some research shows it can slow the progression of advanced AMD in some cases.

In regards to neurological functions, it is equally as negative, with research concluding that Vitamin E supplements do not support the maintenance of cognitive performance or slow its decline with normal aging.

It also debunks the myths that Vitamin E is useful in preventing cancer or preventing cardiovascular disease in middle-aged or elderly individuals.

It appears, therefore, that claims of vitamin content in various vegetable oils and fats mostly do not correlate with any real evidence proving health benefits.

Palm oil is also high in beta-carotene, which is a precursor, or inactive form, of vitamin A. A review in the Journal of American College of Nutrition found that palm oil could be used to treat Vitamin A deficiency.

Cholesterol: what is it? Good vs bad In a study of edible oil and its relative healthiness and health benefits, cholesterol must be discussed.

According to charity Heart UK, cholesterol is a waxy substance that is produced in the body but is also present in some foods. Cholesterol is important for bodily function and is vital for every cell to work. It is also needed to produce Vitamin D, some hormones and digestive bile. Although necessary, too much cholesterol can increase the risk of developing heart and circulatory diseases, Heart UK says.

Cholesterol is carried in the blood by proteins; proteins containing cholesterol are called lipoproteins.

There are two types of lipoprotein: High-density lipoprotein (HDL) – this carries the cholesterol from the cells back to the liver to be TABLE 2: ENERGY & SFA CONTENT OF OILS Oil Calories Saturated per tbsp fat (g)

broken down or expelled from the body as waste.

It is known as ‘good cholesterol’ and high levels are acceptable.

Low-density lipoprotein (LDL) – this carries cholesterol to the cells that need it. If too much cholesterol is being carried, it can build up in artery walls and lead to health complications. It is known as ‘bad cholesterol’.

Heart UK lists foods high in bad cholesterol as including butter, hard margarines, lard, goose fat, coconut and palm oils – this is due to their high saturated fat content. The charity says that eating too much saturated fat will increase the levels of bad cholesterol in the blood. Replacing saturated fats with unsaturated fats can lower cholesterol levels again.

According to the LFRA Oils & Fats Handbook Series, Volume 1, Vegetable Oils and Fats, studies have demonstrated that MUFAs can lower total and LDL cholesterol independently, although they have little impact on HDL. PUFAs on the other hand have been shown to reduce HDL cholesterol. Therefore, fats high in monounsaturated fatty acids, which help to lower the levels of LDL, would be recommended for those suffering from high cholesterol, or health conditions associated with high cholesterol. Oils high in PUFAs but low in SFAs include olive oil and rapeseed oil.

No focus on cholesterol would be complete without a look at trans fatty acids (TFAs).

TFAs are part of the unsaturated fatty acids within an edible oil or fat. Each of the double bonds within the unsaturated fatty acids can exist in the cis or trans geometric form.

Almost all double bonds in unsaturated fatty acids occur in the cis form, with the exception of fats from ruminant animals such as cows and sheep.

Therefore, low levels of TFAs are found in milk and dairy products, and also in tallow.

In modern times, the biggest source of TFAs in foods is the use of partial hydrogenation to raise the melting point of oils and fats, in which the natural cis form of the double bonds are largely transformed into the artificial trans form.

TFAs have been found to have a double-negative effect on the balance of HDL and LDL. Not only do high levels of TFAs in the diet increase amounts of the bad LDL, they also lead to a reduction of the TABLE 3: CHOLESTEROL CONTENT OF OILS Oil Range (mean) mg/kg Safflower

6-10 (10)

Sunflower

120

1.8

Sunflower

10-40 (17)

Palm

120

6.7

Maize/Corn

20-100 (50)

Canola

124

1

Groundnut

10-40 (30)

Maize/corn

122

2

Cotton

20-100 (43)

Peanut

119

2.3

Rapeseed

25-80 (50)

Olive

120

Extra virgin olive oil 119

Olive

1-24 (7)

2

Palm

12-27 (19)

Coconut

117

11.8

Soya

20-35 (28)

Butter

102

7.3

Fish oil

2,000-6,000

Margarine

102

2.5

Dairy butter

2,200-6,800

Palm kernel

116

11

Beef tallow

1,000-1,200

Soyabean

120

2

SOURCE: WWW.POPSUGAR.COM

SOURCE: LFRA OILS & FATS HANDBOOK SERIES, VOLUME 1, VEGETABLE OILS AND FATS

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H EALTH & N UTRITION

CHOLESTEROL IS CARRIED IN THE BLOOD BY LIPOPROTEINS, LOW-DENSITY LIPOPROTEIN

good HDL – this has been labelled the ‘double whammy’ of TFAs. The negative effects of TFAs have not been linked to dairy fats.

It is the use of industrially-produced TFAs in food which is either banned, declared unsafe or subjected to specified limits in countries worldwide. See ‘The trans fatty acid conundrum’, OFI July/August 2015 for more information.

How heat changes oil Up until this point, this feature has looked at the health benefits and analysed the healthiness of various vegetable oils as stand alone, room temperature oils. Although this has been revealing, the healthiness of vegetable oils and fats has been shown to change dramatically when they are heated, during the process of food cooking for example.

Importantly, when heating an oil or fat to a high temperature (cooking usually heats oil to around 180oC), the molecular structure of the oil and fat changes due to oxidation. This also happens to oil at room temperature, although much more slowly.

Oxidation is a reaction between oil and oxygen and causes aldehydes and lipid peroxides to be formed. According to the BBC, even small amounts of aldehydes have been linked to increased risk of heart disease and cancer.

A BBC Magazine article in July 2015 asked the question, ‘Which oils are best to cook with?’ and analysed how the heating of oil affects its properties.

For the research, a number of residents of Leicester were given a variety of oils and fats to use in their everyday cooking. They were also asked to collect any used cooking oil (UCO) to be analysed.

Oils used in the experiment were sunflower oil,

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Coconut oil: evaluating the claims Coconut oil has experienced a great deal of hype in recent years, with celebrity endorsements and research claiming it as a ‘cure all’. Although fashionable, are these health claims really true?

For example, the Indian Coconut Journal claimed in June last year that coconut oil: Is high in antimicrobial activity; Is an anti-depressant and anti-stress product; Improves insulin secretion in diabetic patients; Lowers the risk of coronary heart disease; Prevents blood pressure increase, in turn lowering risk of cardiovascular disease; Promotes weight loss; Has positive effects on bone health; Has positive effects on liver health; Has a positive effect on cognitive performance, in particular for those suffering from Alzheimer’s.

W-DENSITY LIPOPROTEIN IS REFERRED TO AS ‘BAD CHOLESTEROL’ AND IF TOO MUCH IS BEING CARRIED, IT CAN BUILD UP AND CLOG THE ARTERY WALLS

mixed vegetable oil, corn oil, cold pressed rapeseed oil, olive oil (refined and extra virgin) butter and goose fat.

Samples of the UCO were sent to Leicester School of Pharmacy at De Montfort University in Leicester for analysis. Professor Martin Grootveld and his team ran a parallel experiment in which they heated up these oils to frying temperatures.

According to the BBC report, the study in Leicester found that oils high in PUFAs (corn oil and sunflower oil) generated very high levels of aldehydes.

“It’s a simple chemical fact that something which is thought to be healthy for us is converted into something very unhealthy at standard frying temperatures”, Grootveld says.

In comparison, oils richer in MUFAs and SFAs, including olive oil, cold-pressed rapeseed oil, butter and goose fat, were much more stable and produced far fewer aldehydes. The study reported that saturated fats in particular barely underwent the oxidation reaction.

Fats rich in monounsaturated fats, such as lard, are preferable for frying than those rich in polyunsaturates such as sunflower oil and corn oil, the research found.

Specifically, the recommendation following the research is to fry or cook with an oil or fat high in monounsaturated or saturated lipids – more than 60% for one and more than 80% if the fat or oil contains both types. Pick an oil which is low in polyunsaturated, ideally less than 20%.

Grootveld recommends olive oil when frying and cooking, due to fewer toxic compounds being generated, and those generated being less toxic and threatening than those formed from heating other oils. Olive oil is 76% monounsaturated, 14%

saturated and 10% polyunsaturated – making it more resistant to oxidation and far more stable.

Finally, advice states that there is no distinction when frying or heating between extra virgin olive oil (EVOO) and olive oil, as antioxidants that are understood to be present in EVOO cannot protect against oxidation through heat anyway.

Processing & refining As well as the negative effects of oxidation arising from heating oils during cooking, the high heats that vegetable oils and fats are subjected to during the processing stage may also cause the safety and health benefits of some oils and fats to be compromised.

According to a European Food Safety Authority (EFSA) opinion in May last year, process contaminants that form during the refining of some vegetable oils at high temperatures of around 200oC raise potential health concerns for young consumers and those who consume a higher than average amount. The contaminants that form are known as glycidyl fatty acid esters (GE), 3-monochloropropane-1,2-diol or 3-chloropropane-1,2-diol (3-MCPD) and 2-monochloropropane-1,2-diol (2-MCPD) and their fatty acid esters.

The EFSA’s Panel on Contaminants in the Food Chain (CONTAM) says there is sufficient evidence that glycidol (the parent compound of GE) is genotoxic and carcinogenic and recommends a tolerable daily intake of 0.8 micrograms/kg of body weight per day for 3-MCPD. According to the EFSA, the highest levels of all the contaminants were found in palm oils and palm fats, with margarines, pastries and cakes the main sources of exposure.

According to Ellie Krieger, writing in the Washington Post in October 2016, coconut oil is not quite the miracle fat that it has been made out to be. Laurence Eyres, chairman of the Oils & Fats Specialist Group at the New Zealand Institute of Chemistry, was the lead researcher on a meta-analysis of coconut oil’s health and science claims.

According to the study, coconut oil sits between butter and unsaturated plant oils in terms of how it affects cholesterol levels and heart health. It is 92% saturated fat, and raises LDL (‘bad’ cholesterol) – although less than butter, but more than unsaturated plant oils.

For cholesterol, coconut oil is problematic. It raises both good and bad cholesterol – which some claim neutralises the result. However, according to the meta-analysis, coconut oil raises small LDL particles, “that are worrisome because they are really atherogenic”, and promote the formation of plaque in the arteries.

A particular purported benefit of coconut oil is that is a source of medium-chain fatty acids (MCTs) – a type of fat that is processed, absorbed and metabolised more effectively than other types of fat. The rhetoric about MCTs is true, but there is a problem with linking coconut oil with MCTs. According to Eyres, lauric acid (the predominant fatty acid in coconut oil) is often described as a medium-chain fatty acid, when in fact it behaves like a normal long-chain fatty acid in the body and coconut oil contains closer to 3% MCT. As the so-called ‘medium-chain fatty acid’ content of coconut oil has been shown to be no such thing, this calls into question a variety of other health claims made about the oil which stem from this supposed high MCT content. For example, SEA News Circular in July 2016 said the MCTs in coconut oil meant it did not contribute to fat accumulation or obesity, and promoted weight loss. In addition, the same article notes: “the ketone bodies generated from MCTs in coconut oil could help treat neurological disorders such as Alzheimer’s disease”. Again, with an estimated MCT content in coconut oil of less than 3%, it cannot be said that this makes coconut oil ideal for treating Alzheimer’s.

Finally, the Washington Post report debunks one final myth around coconut oil and saturated fat in general – that it does not necessarily contribute to heart disease. According to the article, “even if saturated fat turns out to be neutral when it

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H EALTH & N UTRITION

comes to heart disease, unsaturated fats, especially antioxidant-rich oils such as olive oil, are actually protective, so there is good reason to make them your go-to fats.” Citing studies of the traditional diets of Pacific Islanders, who historically consume a large amount of saturated fat from coconut products and have low rates of cardiovascular disease is also not a helpful claim. This is because the saturated fat in this instance is obtained from coconut products such as flesh, cream and flour, which is rich in fibre. Coconut oil, which contains no fibre and is not a traditional part of the diet for Pacific Islanders, and cannot claim the same low rates of cardiovascular disease.

Eyres says specifically, “It would be dangerous, and rather silly, to replace your extra-virgin olive oil with coconut oil”, for these reasons.

Olive oil The advice from Professor Grootveld in the BBC Magazine feature was to cook with olive oil, but what other health benefits is olive oil claimed to have, and what is the evidence behind these claims.

In a special report, Olive Oil Times collected together the various health claims associated with the consumption of olive oil, some of which include: Effective against cancer: Olive Oil Times reports that olive oil contains the phytonutrient oleocanthal, which mimics the effects of the drug ibuprofen, reducing inflammation and reportedly decreasing breast cancer risk and recurrence. It is also purported that olive oil is protective against the development of breast cancer – studies show low incidences of specific types of cancer, including breast cancer, in individuals who moderately and regularly intake EVOO. Reduces risk of type 2 diabetes: the report says that a diet rich in monounsaturated fats (found in olive oil) has been shown in studies to protect from chronic diseases such as heart disease, cancer and diabetes. Olive Oil Times refers to a study published in scientific journal Diabetes Care, which showed an olive oil rich diet reduced the risk of developing type 2 diabetes by almost 50% compared to a low fat diet.

Might help prevent strokes: Researchers published a study in French online journal Neurology, where it monitored the number of strokes in 7,625 individuals over 65 in three French cities. The individuals had been categorised into three groups based

All analyses are performed using state-of-the-art instruments and technology to ensure the lowest detection limits.

on their levels of olive oil consumption (specifically, usually EVOO). After five years there had been 148 strokes overall. Analysis of the results showed that the group that most intensively used olive oil (for cooking and dressings) were 41% less likely to suffer a stroke in comparison to those who did not consume the oil at all.

Fights against osteoporosis: Osteoporosis causes a decrease in bone mass, causing fragility of the bone and increases the possibility of fractures. Olive Oil Times reported that scientists found consumption of olive oil positively affected the thickness of bones, and scientists concluded, “it is a very promising candidate for future treatments of the disease”.

Reduces the risk of metabolic syndrome: The risk of metabolic syndrome has been shown to be reduced by a Mediterranean-style diet including olive oil.

Reduce the risk of Alzheimer’s disease: A study published in the journal Chemical Neuroscience, showed that oleocanthal present in EVOO has the potential to reduce the risk of Alzheimer’s disease, Olive Oil Times reported. It is also claimed it can reduce cognitive decline that occurs during aging.

Which oil wins the debate?

The question of which oil is the healthiest to consume is by no means a simple one, and attempting to answer it leads one down many alternatives routes with multiple considerations.

However, at the end of most research routes, scientists and dieticians are coming to the same conclusion and recommending the same one oil – this is olive oil. Rich in mono and polyunsaturated fatty acids and low in saturated fats – both at room temperature and after being subjected to high heat – olive oil is stable and causes the occurrence of the least amount of toxic substances while at the same time being purported by multiple studies to reduce, protect against and prevent a variety of chronic diseases and age related decline – both of the body and the brain.

Rose Hales is OFI’s editorial assistant

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Argentina: positive projections

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A SIGNIFICANT GROWTH IN DIESEL CONSUMPTION IN ARGENTINA HAS BEEN PROJECTED, AND THE CURRENT B10 FOR ON-ROAD TRANSPORT WILL BE MAINTAINED AT LEAST THROUGH 2017

Argentine bioethanol production for 2017 is projected to increase to a record 1.04bn litres, and biodiesel production is forecast to increase to 3.1bn litres. The country is a top exporter of soyabean oil and meal, and e ports s n cant o u es o biodiesel, mainly to the USA, Peru and the EU – although anti-dumping duties are causing problems

S

ince 2007, Argentina has had in place a regulatory framework to promote the production and use of biofuels. The main objectives of this framework are to diversify the supply of energy, to foster environmental conservation, and to promote the development of rural areas (primarily non-traditional production areas), especially for the benefit of small and medium-sized agricultural producers.

The framework focuses on conventional biofuels, and Argentina has a large biodiesel industry based on soyabean oil and a growing ethanol industry based on sugarcane and more recently grains.

Current policy does not directly support second generation or advanced biofuels. However, there are a few government, private sector and university programmes researching these types of feedstocks and technology.

In April 2006, the Argentine Congress passed Law 26,093, which regulates and promotes the production and sustainable use of biofuels. This law mandated the use of biofuels beginning in 2010, with an obligatory mix of 5% ethanol in gasoline and 5% biodiesel in diesel. This goal was largely met for biodiesel but fell far short for ethanol. Under this law, biofuel producers have three options: to produce for the domestic market, taking

advantage of various tax incentives; to produce for self-consumption, with similar advantages as option 1; to produce for the export market, in which case the companies are ineligible for the tax incentives.

Developments since 2007 In January 2008, Congress passed Law 26,334, which promoted the production of bioethanol from sugarcane. This law allowed sugar mills to participate under the biofuel promotional regime, maintaining the basic norms and regulations of the biofuel law. It also promoted exports of surplus ethanol.

In August 2012, the government made important changes to the biodiesel policy by reducing the official domestic price and left aside the original formula (which took into account production costs) to calculate the price, which is announced every month.

In December 2012, the government also announced a new price scheme for biodiesel for the local mandate, based on the size of the plants.

It set a higher price for biodiesel processors of up to 20,000 tonnes/year, a lower price for processors of up to 100,000 tonnes/year and an even lower price for large companies (most big exporters) with production over 100,000 tonnes/year. In September 2013, the government created a new category of large plants called ‘non-integrated’ (which need to purchase feedstock from third parties). These prices have fluctuated since the implementation of the programme. Prices in June 2016 were US$790/ tonne (AR$11,849/tonne) for small plants; US$780/tonne (AR$11,706/tonne) for medium plants; US$702/tonne (AR$10,532 /tonne) for large non-integrated plants; and US$611/tonne (AR$9,160/tonne) for large companies.

In December 2013, the government announced that the mandatory biodiesel blend would be increased to 9% in January 2014 and to 10% in February 2014. In this announcement it also included, for the first time, a 10% blend to use in heating power plants. The Secretariat of Energy, through Resolution 44/2014 increased the

blend mandate for ethanol to a minimum of 10%

by December 2014. None of these goals were met.

In 2015, the effective average bioethanol blending mix was 9.4% and 8.4% for biodiesel.

In mid-2014, Congress passed Law 23,996, which suspended until the end of 2015, a 19% tax on local biodiesel sold at the pump, and a 22% tax on biodiesel to subsidise power generation. The idea was that this suspension would last until the countervailing duties applied by the EU to Argentine biodiesel were removed. Through Decree 630 these exemptions were extended until 31 December 2016.

In September 2014, the Secretariat of Energy created a differentiated price for ethanol depending on the feedstock used (until then, there was only one price). Through the publication of new price formulas, grain ethanol was priced lower than that of sugarcane ethanol. In December 2014 the first differentiated price was published. In June 2016 the official price for grain ethanol was US$791/ tonne (AR$11,872/tonne) and US$852/tonne (AR$12,774/tonne) for sugarcane ethanol.

In December 2015, new President Mauricio Macri took office after a tight election against the official candidate of the government, which had ruled the country for the past 12 years. As promised in the campaign, the government got rid of capital controls with an immediate devaluation of the peso of about 40-45% against the US dollar. It also eliminated export taxes on all crop commodities (corn went from 20% to zero), except for the soyabean complex, which were reduced by five percentage points (beans dropped from 35% to 30%, and oil and meal from 32% to 27%).

In April 2016, the Ministry of Energy established that gasoline had to be mixed at a minimum with 12% bioethanol and diesel mixed with a minimum 10% biodiesel. In the case of bioethanol, the additional increase of two percentage points has to be supplied by the sugar industry. Some comments of government officials indicate that the mandates for biodiesel and bioethanol could be increased to 20% in a “few years’ time”. The Ministry of Energy is working together with car manufacturers and the National Institute of Industrial Technology to analyse the

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BIOFU ELS

feasibility of reaching such levels of blending.

In June 2016, the government announced an increase of the export tax on biodiesel to 5.04% (from 3.96% in May). A factor that contributed to the expansion of the local biodiesel industry since its beginnings has been the differential export tax on biodiesel vis-à-vis soyabean oil. Soyabean oil exports are currently taxed at 27% while biodiesel exports are taxed at 5.04%. Since 2012, a ‘flexible export tax system’ for biodiesel. In the 12 months up to July 2016, the government modified the export tax on a monthly basis. The local industry claims that due to the nature of their business, they need the export tax to remain fixed at least for six month increments.

neither of the two have been officially recognised by the EU. However, while markets were open, exports were accompanied by certificates demonstrating land use and GHG emissions.

In the case of the USA, in mid-2009, the government presented comments to the Environmental Protection Agency’s (EPA) Regulation of Fuels and Fuel Additives, and the changes to the US Renewable Fuel Standards (RFS). It showed that Argentine soyabean-based biodiesel reduced GHG emissions far more than the established 22%. EPA’s rulemaking currently establishes that soyabean-based biodiesel meets the 50% reduction in GHG emissions required to qualify for the biomass-based diesel category, but foreign supplies must still prove that land used to supply biofuel feedstock was cultivated prior to 2007 and that a robust monitoring and tracking system is in place to insure no direct land use change.

In September 2012, CARBIO presented the EPA with a certification scheme demonstrating that Argentina could export biodiesel made of soyabeans.

This was as long as it was produced on land which was not cultivated or cleared after 2007 and hence be eligible to generate RINs and meet obligations under the RFS. In late January 2015, EPA approved CARBIO’s certification scheme. However, there were seven local large biodiesel export plants registered with EPA well before CARBIO’s approval. So far none are exporting under CARBIO’s umbrella and they all use individual record-keeping. Already in 2013, one of these plants exported a small volume that generated RINs. Efforts aimed at de-authorising the CARBO certification scheme while the seven large plants remain eligible to generate RINs will not adversely impact Argentine biodiesel shipments to the USA.

Environmental considerations There are no specific official environmental or social/economic sustainability criteria for biofuels in Argentina. However, being a major exporter of biodiesel, the government closely monitors other countries’ criteria and regulations in order to avoid restrictions on Argentine exports.

The EU established through its Climate and Energy Package that biodiesel from soyabean oil does not meet the minimum greenhouse gas (GHG) emissions savings level. Argentina challenged this decision. The government presented a study prepared by its Agricultural Research Institute (INTA), in which it takes into account the extensive adoption of no-till cropping, the short distance from farms to crushing facilities, refining and port facilities, and its modern and efficient industries.

CARBIO, the Argentine Chamber of Biodiesel, has presented to the EU a voluntary certification scheme addressing all their requirements. So far,

TABLE 1: ETHANOL USE AS FUEL (MILLION LITRES) Calendar year

2008

2009

2010

2011

2012

2013

2014

2015

Fuel begin stocks

0

0

20

25

28

38

35

43

Fuel production

0

23

125

173

250

472

671

815

2016

2017

54

44

880 1,040

Fuel imports

0

0

0

0

0

0

0

0

0

0

Fuel exports

0

0

0

0

0

0

0

0

0

0

Fuel consumption

0

3

120

170

240

475

663

804

Fuel ending stocks

0

20

25

28

38

35

43

54

890 1,040 44

44

Number of refineries

0

3

9

9

11

12

14

14

17

17

Nameplate capacity

0

120

215

355

600

680

880

Capacity use %

0

19

58

49

42

69

76

86

70

83

0

0

18

130

285

370

340

400

58

420

920 1,200 1,100 1,300

Production capacity

950 1,250 1,250

Co-product production (1,000 tonnes) Distill grain sol dry eq

0

0

Feedstock use for fuel (1,000 tonnes) Grains (corn)

0

0

0

0

Molasses/juice

0

90

470

650

880 1,170 1,150 1,300 1,700 2,000

120

170

240

Market penetration (million litres) Fuel ethanol Gasoline Blend rate %

0

3

475

663

804

890 1,040

5,520 5,760 6,240 6,970 7,470 8,160 8,080 8,510 8,300 8,700 0.0

0.1

1.9

2.4

3.2

5.8

8.2

9.4

10.7

12.0

Alternative energy policies Under the 2006 Law 26,190, named National Support for the Use of Renewable Energy Sources, and its regulatory framework established in 2009, the government created programme Genren (Renewable Generation). Its objectives were to produce 895 megawatts (MW) in a sustainable manner, reducing emissions of CO2 and other GHG, diversifying Argentina’s energy matrix, while promoting regional economies throughout the country. The Law established that 8% of the country’s electricity consumption be supplied by renewable energy sources (including wind, biofuels, biomass, photovoltaic, solar and small hydro power projects) by 2016. However, this goal has still not been reached.

The Ministry of Agriculture, through the research agency INTA, conducts and coordinates most of the research in biofuels in Argentina. The National Bioenergy Program goals are to ensure the supply of sources of bioenergy in support of sustainable development, national energy security, the reduction of poverty, the attenuation of climate change and environmental equilibrium.

There are three specific objectives: Identification and characterisation of the potential of different crops, waste and byproducts to produce energy; The study and development of non-traditional crops with energy potential; The development of second generation biofuels, through the identification of new enzymes to degrade cellulose.

INTA is currently working on several projects which involve the production of different feedstocks and also the industrialisation and processes to obtain biofuels.

The Ministry of Agriculture and the Secretariat of Energy manage a project called Probiomasa, with the objective of producing electric and thermal energy using biomass feedstock from the agricultural and forestry sectors, and urban waste. With several projects in 12 different provinces, the programme provides funding support for foundations and bases to launch targeted projects. Through February 2016, there were more than 130 projects, of which approximately 60 were already operating and 13 were under construction.

There are also provincial entities, public and private universities, and the private sector working on different projects. Some of these programmes focus on jatropha, algae, castor oil, canola, sweet sorghum and miscanthus. Research is primarily focused on feedstocks which can be produced in areas not suited for crop production and which do not compete with food production. A few programmes are working on cellulosic biofuels, based on sugarcane, sugar beets, harvest residues, sweet sorghum and switch grass. There are also a few industries and municipalities developing biogas facilities to use waste and reduce the cost of energy they consume. There are also some small operations which recycle used vegetable oil.

Since 2009, Argentina is a member of the Global Bioenergy Partnership (GBEP) which promotes bioenergy for sustainable development. The government received financial support from the IDB and coordinated public/private studies of 24 sustainability indicators for bioenergy. The results

were published in November 2015.

22 OFI – FEBRUARY 2017 www.ofimagazine.com

Argentina biofuels.indd 2

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BIOFU ELS

Ethanol PRODUCTION Ethanol production for 2017 is forecast to increase to a record 1.04bn litres. This is a result of the recent increase in the domestic blend mandate from a minimum of 10-12% in gasoline and greater fuel demand. Of total ethanol production in 2017, half should originate from sugar supplies and the other half from grain supplies. The new government supports the bioethanol industry and believes this sector can be part of the solution to increase domestic fuel supply and help limit the large volume of imported fuel, which is very costly to the country.

The government is said to be seriously analysing the launching of flex fuel cars in the next few years. The local car industry already produces these types of cars for export to the Brazilian market. However, the logistics and adjustments of supplying E100 at the pump is expected to take several years and costs are significant.

There are nine local sugar mills located in the north western provinces which have quota to supply under the mandate. Mills use mostly molasses but can also use sugarcane directly, depending on the convenience and returns of their different businesses.

Sugar is the main focus of the large mills, but due to recent low world sugar prices and good domestic ethanol prices, they have lately focused more in expanding the ethanol business. The recent increase of two percentage points to the mandate was given exclusively to the sugar industry. By doing this, the government helped them to reduce part of the large sugar stocks they were holding and allows mills to increase their share of an increasingly profitable business. There were three sugar mills expected to begin supplying ethanol under the mandate quota in 2016 that did not participate previously.

The other half of bioethanol supplies for the domestic mandate has to be supplied by the grain ethanol industry. There are five plants distributed in the main corn area in the centre of the country. Most plants almost exclusively use corn as a feedstock, which happens to be the most efficient under current market conditions. Argentina produces and exports significant volumes of sorghum, but so far its use for bioethanol production has been insignificant.

There are a few projects of small plants based on corn to produce ethanol for self-consumption (integrated to feedlots) and small plants to generate electricity for self-consumption and/or connect to the grid. As in the sugarcane ethanol sector, the corn ethanol industry continues to be profitable.

The country’s production capacity of bioethanol is expected to increase to 1.25bn litres in 2016, once the three sugar mills begin to supply ethanol for the mandate. The original nine sugar mills have a production capacity of bioethanol of approximately 450-500M litres a year. The five plants which utilise grain as feedstock have a production capacity of approximately 550M litres a year.

The latter plants supplied 59% of the country’s bioethanol in 2015. The first of the grain ethanol plants were inaugurated in 2012, and the most recently in late 2014.

Since December 2015, when the new government took office and eliminated the export tax on corn and other agricultural products, local bioethanol processors now purchase corn locally at similar prices to those of the world market. The advantage of purchasing corn at a 20% discount no longer exists. Local corn prices have increased 150% (in

peso terms) since late 2015, while the official price of grain bioethanol has only increased by 55%.

Despite this difference, the industry still enjoys positive returns. In the case of bioethanol produced from sugarcane, it allows mills to diversify their production and have an alternative depending on the size of the crop and the level of world sugar prices.

Argentina is self-sufficient in sugar and normally has a significant volume of sugar surplus to export.

Last year’s current sugarcane harvest began in June, with a large surplus from the previous season and expectations of a large production. However, world sugar prices have begun to increase lately and could help the industry to improve its difficult economic and financial situation.

Argentina is the world’s third largest corn exporter, averaging around 18-22M tonnes in the past three to four years. Domestic consumption ranges between 9M and 10M tonnes a year, with the poultry, feedlot, and dairy industries as the main consumers. The local grain ethanol industry, which is expected to consume roughly 1.3M tonnes of corn in 2017, has lots of room to continue expanding as corn production in Argentina is expected to increase significantly during this crop season and hereafter as a result of the government’s new policies for the sector. Sorghum exports are also important, with volumes ranging between 1.5-2.0M tonnes a year.

CONSUMPTION Argentine consumption of bioethanol for 2017 is forecast to increase to 1.04bn litres, a new record. This is the result of a full year with the new 12% mandate mix (increased in April 2016) and an expected growth in gasoline demand due to an anticipated rebound in the local economy.

The mandate mix for 2016 is estimated to total approximately 10.7% as the first four months operated at 10.5%. Industry contacts expected to reach the full 12% mix rate by August-September 2016. The mandate rate in 2015 was 9.4%.

Since the implementation of the biofuels law in 2010, bioethanol domestic consumption has grown every year.

Industry contacts indicate that the government is working on adapting gasoline specifications and higher quality standards which will allow, eventually, a higher content of bioethanol. Car manufacturers are not very supportive of an increase of the mandate blend due to potential problems with engines and the extension of warrantees. The local association of grain ethanol have done studies which indicate that gasoline can be blended with 20% ethanol without affecting engines. The case of neighboring countries Brazil and Paraguay support blends of 25-27% of ethanol.

TRADE Exports of bioethanol from Argentina are not expected in the near nor medium future. Argentina still has significant potential to increase its domestic consumption which enjoys official support that guarantees a profitable business. Bioethanol domestic prices under the mandate are normally higher than world prices. Also greater investment in expanding capacity would be needed to support exports.

Once the biofuel mandate was in place in early 2010, Argentine ethyl alcohol exports dropped significantly as most production surplus was redirected to supply the local bioethanol mandate which was more profitable. Before the mandate,

Argentina exported 60-80M litres of ethyl alcohol (not for fuel use) a year. Exports in 2015 totaled 22M litres, with Chile and France being the main destinations.

Ethanol imports from Mercosur countries (including Brazil) are duty free, and countries outside the block pay 20%. Exports are taxed at 5%, but receive a 4.05% rebate.

ENDING STOCKS Bioethanol ending stocks for 2017 are forecast at 44M litres. Stocks are mainly in the hands of the local sugar industry which produces ethanol in the last semester of the year, which then is distributed throughout the following months until the new sugar crop begins in May. By the end of the year the local grain bioethanol industry can have some 10M litres waiting to be distributed immediately, as demand at that time of the year is large.

Biodiesel PRODUCTION Production of biodiesel in Argentina in 2017 is forecast to increase to 3.1bn litres, a new record. The final production volume is tied to the country’s domestic use and exports, since there are no imports. Exports depend strongly on other countries’ biofuels and trade policies. Biodiesel production for the domestic mandate is expected to continue its ascending trend of the past years.

Most contacts believe that the USA will continue to import significant volumes of biodiesel to meet increased mandates. They also believe that the Peruvian market will continue to be open while exports to the EU will probably resume timidly during 2017. Production in 2016 is estimated at 2.69bn litres, a substantial increase from the previous year thanks, primarily, to growing exports to the USA. Practically all biodiesel produced in Argentina is made from soyabean oil. The biodiesel business began in 2007 when large local vegetable oil crushing plants saw the opportunity to add value to TABLE 2: ARGENTINE BIODIESEL (MILLION LITRES) Calendar year 2008 2009 Beginning stocks Production

10

40

75

830

1,360

2,070

Imports

0

0

0

Exports

780

1,305

1,545

Consumption

20

20

580

Ending stocks

40

75

20

18

22

24

1,500

2,300

2,800

55.3

59.1

73.9

750

1,230

1,870

Production capacity Number of biorefineries Nameplate capacity Capacity use % Feedstock use for fuel (1,000 tonnes) Soyabean oil Market penetration (million litres) Biodiesel, on-road + agriculture Diesel, on-road + agriculture Blend rate % Diesel, total use

20

20

580

13,830

12,740

13,775

0.1%

0.2

4.2

14,568

13,735

15,451

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Argentina biofuels.indd 3

2010

02/02/2017 10:33

B I OF UE L S

the oil and export it as biodiesel to the EU. Argentina is one of the world’s three largest soyabean producers and the top exporter of soyabean meal and oil. There is an insignificant volume of biodiesel produced from used cooking oil encouraged by several municipalities and some private operations.

Since its beginning, local biodiesel operations have invested over US$1.5bn.

The current production capacity is approximately 5.4bn litres and it is expected to remain the same in 2017. Due to the difficulties of the past several years in exporting, investment in expanding has been minimal. The use of capacity during 2010-2012 ranged between 70-84%. However, the combination of export limits to the EU market and a significant growth in capacity during 2013-2015 made capacity utilisation drop to 40-55%. Capacity utilisation in 2017 is forecast at 57%, the highest since 2012. While most small plants are operating almost at full capacity to supply the local mandate, there are a few large plants which have shut down or are only working a few days a month. New investment is directed primarily at small plants.

There are 38 biodiesel plants in Argentina with capacity of up to 700M litres/year. The largest 10 companies account for over 70% of the country’s capacity. Most of these companies are international and local traders which already had large vegetable oilseed crushing facilities in the country. They account for practically all exports.

The balance is distributed among 28 smaller companies, with plants with a capacity ranging between 12-110M litres/year. This group supplies most of the local mandate. These plants typically need to buy the feedstock from third parties and have higher production costs than large plants, most of which are fully integrated.

The local biodiesel industry had a difficult 2015 due to low exports and a low domestic official price. Capacity utilisation was 40%, the lowest since the industry began operating. Currently the sector of small and medium companies is in a good situation as the official price is currently profitable for them. The large exporting companies are also enjoying positive returns.

However, capacity utilisation for 2016 and 2017 is expected to stay low, ranging between 50-57%. Most of the big plants are owned by large corporations which have been operating in the local grain sector for many years and do not have biodiesel as their core business. Several of these plants were built during the first days of the biodiesel industry and have already recovered the investment.

CONSUMPTION Argentine biodiesel consumption for 2017 is forecast to reach a record 1.4bn litres. The local economy is going through significant adjustments, implemented by the new government and an economic recession. Most economists believe that there will be a strong rebound in 2017, with lower inflation, strong investment and a stronger agricultural sector. The Buenos Aires Post projects a significant growth in diesel consumption and the

2010

2011

2012

2013

2014

2015

2016

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2017

40

75

20

20

55

5

20

35

25

1,360

2,070

2,760

2,800

2,260

2,935

1,060

2,690

3,100

0

0

0

0

0

0

0

0

0

1,305

1,545

1,910

1,770

1,305

1,820

895

1,500

1,700

20

580

850

995

1,005

1,100

1,150

1,200

1,400

75

20

20

55

5

20

35

25

25

22

24

27

33

36

38

38

38

38

2,300

2,800

3,300

4,000

4,550

5,200

5,200

5,400

5,400

59.1

73.9

83.6

70.0

49.7

56.4

39.6

49.8

57.4

1,230

1,870

2,500

2,530

2,050

2,660

1,860

2,440

2,800

20

580

850

995

1,005

1,100

1,150

1,200

1,400

2,740

13,775

14,210

13,530

12,750

13,420

13,710

13,720

14,500

0.2

4.2

6.0

7.4

7.3

8.2

8.4

8.7

9.7

3,735

15,451

16,232

15,345

16,340

15,214

15,910

15,920

16,850

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25 OFI – www.ofimagazine.com

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BIOFU ELS

current B10 for on-road transport and agriculture will be maintained at least through 2017 with some additional use in agriculture. Only very small volumes of biodiesel are expected to be used in the industrial sector through 2017 to generate electricity.

There are some rumours indicating that the biodiesel mandate could be increased in the near future to 11% or even 12%. Some believe that the mandate for public transportation, trucking and agriculture should be increased to 20%. In late 2013 the government announced that diesel for heat and power generation would be mixed with 10% biodiesel. This requirement has been delayed (but not forgotten) as there have been some technical limitations which are being worked on. In July 2016, the state company that administers the wholesale electricity market finished a test in a heat and power plant that was very successful and more tests will follow shortly.

There are many different technologies and equipment involved in this sector, as well as a diversity of biodiesel qualities. This sector consumes approximately 2.0-2.5bn litres of diesel/year. Local biodiesel producers estimate that some 50-100M litres of biodiesel could be used in the generation of electricity in 2017, but the Buenos Aires Post has not included this in the biodiesel balance.

There is no official data on diesel consumption per end user in Argentina. However, contacts estimated that in 2015, cars used 2bn litres, freight trucking 6.7bn litres, public transportation 1.32bn litres, the agricultural sector 3.2bn litres, and the shipping industry 490M litres. Except for the latter, all the other end users consume diesel mixed at the official blend.

Car manufacturers and oil companies prefer not to increase the blends due to liability concerns, logistical problems and higher costs. The Argentine chamber of biodiesel has come up with successful results after testing a diesel engine running on 10% and 20% biodiesel blends. Most contacts indicate that mandate blends will continue to be set by the government depending on its needs.

TRADE Argentine biodiesel exports for 2017 are forecast at 1.7bn liters. This would be the highest volume since 2014 and only 200M litres shy of the 2011 record, when most shipments went to the EU. Local traders expect most exports to continue flowing to the USA to meet growing mandates and much smaller volumes to Peru. However, exports to Peru will depend on the resolution of a dispute over subsidies and antidumping of Argentine biodiesel in Peru (see Biofuel News, OFI January 2017). Most local contacts are not optimistic on any significant resumption of biodiesel exports to the EU in 2017. In the best case scenario, brokers believe exports could total 100-200M litres.

Exports of Argentine biodiesel are currently profitable, supported by a weaker currency and access to the US market where the blender’s credit and RINs add value to shipments.

As in 2015 and 2016, Argentine biodiesel exports in 2017 will be mainly focused on the US biodiesel market, which benefit from RIN credits under the Renewable Fuel Standard (RFS) and the blenders credit. Local brokers forecast exports between 1.41.5bn litres next year, the key assumption being that the blender’s credit is not changed to a US producer’s only credit. Exports to the USA in 2016

ARGENTINA HAS A LARGE BIODIESEL INDUSTRY BASED ON SOYABEAN OIL. PHOTO: SIMA/ADOBE STOCK

were expected to total 1.3bn litres.

In early 2015, the EPA approved a certification scheme presented by the Argentine Biodiesel Chamber (Carbio) demonstrating that it complied with the EPA’s environmental regulations and qualified under the RFS programme. Biodiesel exports have to be segregated and traced back to the farm, demonstrating that the feedstock (soyabeans in this case) used to make biodiesel was produced on land not cultivated or cleared after 2007 (the year EISA 2007 was enacted). However, local exporters are not using this certification scheme as there are seven processors which are registered individually with the EPA and use an individual record keeping system.

The EPA segregation requirements add an estimated cost of US$30-40/tonne of biodiesel.

This includes a price premium paid to farmers producing ‘EPA soyabeans’, the cost of segregation and controlling the whole chain until export and the time consumed in the whole process. Different companies have different problems. The most common are limited supply of traced soyabeans, smaller-than-needed biodiesel storage capacity and logistical complications.

Sources report that foreign (namely US) demand for biodiesel will rise in 2016 and possibly in 2017, as Argentine suppliers capitalise on developments in the US biofuels market. In particular, this is due to expanding US federal mandates for biomassbased diesel (BBD) and other (non-cellulosic) advanced biofuel, strong RIN values, the US blenders tax credit and a sharply devalued peso.

At present, about 23% of the US fuel supply is diesel used in heavy-duty trucks, buses, construction and farm equipment and heating oil. However, domestically processed biodiesel in the USA faces imported biodiesel and renewable diesel that is more price competitive. According to Bloomberg, biodiesel derived from soyabean oil costs US$3.71/ gallon, but imported biodiesel coming through the Gulf of Mexico port costs US$3.07/gallon, with

Argentine supplies up to 30 cents cheaper than that.

This presents a significant opportunity for Argentina to gain greater market share. In 2015, Argentina was the largest foreign supplier of biodiesel to the US market and accounted for 35% of total US biodiesel and renewable diesel imports, Bloomberg reported in June 2015.

In the past three years, Peru has been a very steady market for Argentine biodiesel, and emerged as the second largest market in 2015 following the loss of sales to Europe and loss of discretionary sales supported by the price competiveness of lower cost biodiesel and very high oil prices just prior to the oil price collapse. Peru has imported roughly 300M litres a year to supply its official mandate, most of which was supplied by Argentina.

However, in August 2014 the Peruvian Institute of Defense of Competition and Intellectual Property Protection (INDECOPI) opened an investigation on imports of alleged Argentine subsidised biodiesel.

Peruvian biodiesel plants have been idled due to the influx of cheaper foreign suppliers, and this investigation was requested by the largest Peruvian biodiesel processor. To date, Peru has set anti-subsidy duties per company ranging between US$15-30/ tonne of biodiesel.

Regarding the antidumping case, Peruvian authorities imposed anti-dumping tariffs on biodiesel from Argentina for a period of five years, Reuters reported in October 2016. Different companies will be charged different rates, under the measure. The Argentine Biofuels Chamber said it would take legal action against the Peruvian government.

In November 2013, the EU implemented an average countervailing duty of 24.6% on Argentine biodiesel due to alleged dumping (provisional antidumping duties were established in May 2013). In practice, this meant the closing of that market.

Argentina appealed such measure before the WTO. In March 2016 the WTO ruled mostly in favour of Argentina’s position, indicating that the EU had wrongly calculated the tariffs. Following an EU appeal, the WTO announced in October that it upheld the original decision. The decision annulled the anti-dumping duties on Argentina’s biodiesel exports to the EU. In May 2016, Spain eliminated a blockage to imported biodiesel which had come into effect two years previously and directly affected Argentina’s exports. This is very important as Spain was the number one market for Argentine biodiesel exports in the EU and will be able to resume exports to this market once the anti-dumping issue is resolved.

Nonetheless, local brokers believe that exports to the EU will restart slowly in 2017 at volumes far smaller than in the past.

Argentine biodiesel is very competitive as a result of large production scale with the latest technology, the use of no-till and GM seed, the close location of soyabean production areas to the industry and ports. This, and the revaluation of the Argentine peso, are the key sources of Argentina’s biodiesel competitiveness.

To some extent, Argentine biodiesel exports are also supported by the differential exports tax which is lower on biodiesel than it is for its feedstock

(soyabean oil).

This feature is extracted from a United States Department of Agriculture (USDA) Global Agricultural Information Network (GAIN) report published on 7 July 2016, titled ‘Argentina: Biofuels Annual 2016’

26 OFI – FEBRUARY 2017 www.ofimagazine.com

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PHOTO: FOTORINCE/ADOBE STOCK

EU ROPE

EU SUNFLOWERSEED PRODUCTION DECLINED SHARPLY IN THE 2015/16 SEASON, DOWN 20% FROM THE PREVIOUS SEASON AND DOWN 13% COMPARED TO THE FIVE-YEAR AVERAGE DUE TO DROUGHT

Rapeseed under pressure Oilseed production

Europe is a major oilseed and vegetable oil producer, importer and exporter. Rose Hales provides an update of current ures and w at s caus n c an e w t n t e ndustr n t e

E

urope is the largest economy in the world, is home to approximately 500M consumers and is a major player in world trade. It is a key grower, producer, importer and exporter of edible oils.

According to FEDIOL, the EU vegetable oil and protein meal industry association representing the interests of European oilseed crushers, vegetable oil refiners and bottlers, the EU produced a total of 32.295M tonnes of oilseeds and 17.399M tonnes of vegetable oils and fats in 2015.

The European vegetable oils and fats industry is characterised by certain unique traits that reflect its vast size, geographical and climate variances. It is the largest producer and consumer of olive oil in the world, as well as producing rapeseed, sunflowerseed and soyabeans, among other oilseeds. The vegetable oil industry in the EU remains relatively stable, although the effects of climate change and the ban on neonicotinoid pesticides, among other factors, are threatening this stability.

The main oilseeds grown in Europe are rapeseed, sunflowerseed, soyabeans and cottonseeds. However, it also grows small amounts of groundnuts, linseed and sesameseed. Europe also imports vegetable oils and oilseeds from elsewhere including soyabeans, sunflowerseed, and tropical oils such as palm oil and coconut oil.

The European Commission (EC)’s Short-Term Outlook in 2016 and 2017, published in February 2016 reports that oilseed production in Europe remained largely stable in the 2015/16 season with shifts mainly occurring between crops. The production of soyabean increased by nearly 19% compared to the previous season, according to the report, and production was up 80% if compared to the five-year average. The increase in production was caused by a 40% increase in planting area, as yields actually declined.

In contrast, the production of rapeseed and sunflowerseed declined sharply in the 2015/16 season, down 12% and 20% respectively, from the previous year. Sunflowerseed production was down 13% compared to the five-year average – caused in particular by drought in the main producing areas of Bulgaria, France, Hungary, Romania and Spain, the report says.

The main producing countries for rapeseed in Europe are Czech Republic, France, Germany, Poland, Romania and the UK. In 2015, these countries produced nearly 18M tonnes of the total 21.8M tonnes of rapeseed produced in the continent,

according to FEDIOL figures. This fell from 2014, when a total of 24M tonnes of rapeseed was produced in the EU, 20.1M tonnes of which came from the main producing countries mentioned above.

Austria, Croatia, France, Hungary, Italy and Romania are the main production areas for soyabean in Europe. The increase in planting area in 2015/16 was most apparent in these countries. In 2015, FEDIOL reported that 2.04M tonnes of soyabeans were produced, compared to 1.69M in 2014.

Cottonseed is only produced in Greece and Spain.

The two countries produced 326,000 tonnes in 2014, FEDIOL says, which rose to 450,000 tonnes in 2015.

Very small amounts of linseed are produced in just over half the EU countries, with the main producer being the UK. Only 85,000 tonnes were produced in 2015, a slight drop from 91,000 tonnes in 2014.

Taking all the oilseeds grown in Europe into account, in 2015 France was the largest producer, having produced 6.77M tonnes of oilseeds. It was also the highest producer in 2014, producing 7.3M tonnes. Other large producers of oilseeds in Europe in 2015 include Bulgaria, Germany, Hungary, Poland, Romania and the UK.

Vegetable oils and fats production In 2015, the EU produced a total of nearly 17.4M tonnes of crude vegetable oils and fats, which rose from 16.9M tonnes in 2014. According to figures obtained from FEDIOL, the EU produced significantly more rapeseed oil than any other oil, at 10.8M tonnes, compared to 3.37M tonnes

27 OFI – FEBRUARY 2017 www.ofimagazine.com

Europe 4.indd 1

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EU ROPE

SOURCE: EUROPEAN COMMISSION

TABLE 1: OILSEED CROP AREA, YIELDS AND PRODUCTION Crop area Crop area Crop yields, Crop yields, (1,000ha) (1,000ha) (tonnes/ha) (tonnes/h) 2015e 2016f 2015e 2016f

Crop production (1,000 tonnes) 2015f

Rapeseed

6,370

6,727

3.35

3.10

21,371

21,287

Sunflower

4,153

4,193

1.74

1.95

7,235

8,056

Soyabean

796

767

2.76

1.69

2,198

2,071

63

75

2.23

1.97

140

128

11,382

11,762

2.72 (average)

2.59 (average)

30,944

31,542

Linseed Totals

SOURCE: EUROPEAN COMMISSION

Export Crop production (1,000 tonnes) 2015e

TABLE 2: EU-28 OILSEEDS BALANCE SHEET (M TONNES) 2014/15e 2015/16f

2016/17f

Production

35.2

30.8

31.4

Rapeseed

24.3

21.4

21.3

Soyabean

1.9

2.2

2.1

Sunflower

9.1

7.2

8.1

Total domestic use

48.4

48.4

46.8

Rapeseed

25.4

25.3

23.9

Of which crushing

24.5

24.5

23.1

Soyabean

14.1

15.8

15.1

Of which crushing

12.8

14.3

13.7

Sunflower

8.9

7.3

7.8

Of which crushing

7.8

6.4

6.9

Imports

15.4

17.4

16.7

Rapeseed

2.4

3.6

3.2

Soyabean

12.8

13.5

13.2

Sunflower

0.3

0.3

0.3

Exports

1.3

0.7

1.0

Rapeseed

0.6

0.3

0.4

Soyabean

0.1

0.2

0.1

Sunflower

0.6

0.3

0.5

End stocks

4.3

3.3

3.6

Rapeseed

2.0

1.4

1.6

Soyabean

1.4

1.1

1.2

Sunflower

0.9

0.8

0.9

Self-sufficiency rate %

73

64

67

SOURCE: FEDIOL

e (estimate), f (forecast) TABLE 3: THE CONSUMPTION SPLIT OF VEGETABLE OIL IN EUROPE BY END USE (‘000 TONNE) Jan-Dec 2013 Jan-Dec 2014 TOTAL Food

27,222 51%

13,188

48%

Biodiesel

8,510

35%

10,260

38%

Non-energy technical

1,256

5%

1,417

5%

Feed Direct energy (electricity) Direct fuel

24,632 12,515

971

4%

1,017

4%

1,350

5%

1,310

5%

30

0%

30

0%

of sunflower oil and 2.6M tonnes of soyabean oil.

This has been the trend since 2002, when the EU produced similar levels of soyabean oil and rapeseed oil (around 3M tonnes).

The majority of the EU’s rapeseed oil was

produced in Germany, followed by France and then Poland. In 2015 sunflower oil was mainly produced in Hungary, Spain and France. Finally, the top producers of soyabean oil were Germany, Spain and the Netherlands.

EU shipments of sunflowerseed reduced considerably in 2015/16 compared to the previous year, with trade within the EU being favoured. Usually, the main export destinations for sunflowerseed are Pakistan, South Africa and Turkey according to the European Commission. Figures from FEDIOL show that in 2014 the EU exported 630,000 tonnes of sunflowerseed but this fell to 260,000 tonnes in 2015. Exports of rapeseed also declined from 549,000 tonnes in 2014 to 300,000 tonnes in 2015.

In comparison, soyabean exports grew between 2014 and 2015 from 67,000 tonnes to 185,000 tonnes.

In terms of vegetable oils and fats, FEDIOL reports that a total of 10.25M tonnes of crude vegetable oils for all purposes were exported from the EU-28 countries in 2015, with the Netherlands and Germany as the top exporters. This includes approximately 3.6M tonnes of rapeseed oil, 2.27M tonnes of sunflowerseed oil and 1.7M tonnes of soyabean oil. These figures are more or less the same as in 2014, where exports of vegetable oils were slightly lower.

Imports and consumption Europe imported 10.75M tonnes of vegetable oils and fats for edible purposes in 2015, and an additional 7.05M tonnes for technical purposes (including biofuels). In addition, it imported 17.37M tonnes of oilseeds in 2015, FEDIOL reports.

The largest volumes of soyabeans were imported from Argentina, Brazil and the USA. The USA took some of Brazil’s soyabean market share in the EU in 2015, with shipments from the USA to Europe increasing by 17% to 4.7M tonnes. Brazil’s exports to Europe decreased by 13% in 2015, dropping to 5.2M tonnes. The largest supplier of soyabeans to Europe is Argentina, which sold 8.5M tonnes to the EU in 2015, compared to 7.7M tonnes in 2014, the EC report says.

Despite Europe’s somewhat negative relationship with palm oil, 2015 palm oil imports increased by 16% compared to the five-year average, which was due to a strong decline in prices. The two main suppliers of palm oil worldwide are Indonesia and Malaysia; in 2015 Malaysia’s supplies to Europe rose 9% and Indonesian supplies fell 9%.

The CBI (Centre for the Promotion of Imports from developing countries) Ministry of Foreign Affairs report, CBI Trends: Vegetable Oils in Europe, published in August 2016 reports on the specific trends in oilseed and vegetable oil imports from individual countries within Europe.

For example, the Netherlands plays an important role in terms of its function as a trade and refining hub, thanks to the Port of Rotterdam (see Rotterdam: the gateway to Europe, p31-33). It imports a large amount of some of the most significant vegetable oils, including palm and coconut. Figure 1 (page 30) shows the percentage of Europe’s coconut oil imported into the Netherlands, which was 43% in 2015. The Netherlands also imported the joint highest volume of palm oil, along with Germany, at 23% of Europe’s total imports. The Netherlands ships these oils on to other European countries via inland vessels. In 2015, Germany imported 9.167M tonnes of oilseeds, and the Netherlands imported 5.29M tonnes. Germany consistently imports large volumes of the majority of vegetable oils, which the report says reflects “its role as the largest vegetable

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EU ROPE

oil consumer/food market in Europe”.

In comparison, countries such as Belgium, France, Italy and the UK are stronger for the smaller or more speciality markets, such as groundnut and sesame oils, according to the CBI Trends report. The UK imported 27% of Europe’s total imports of sesame oil in 2015, and Italy took 42% of Europe’s groundnut oil imports, followed by France at 22% and Belgium at 16%.

According to FEDIOL, rapeseed oil is the highest consumed oil in the EU-28 countries. In 2015, the EU consumed 10.12M tonnes of rapeseed oil. This was followed by 6.9M tonnes of palm oil, 3.97M tonnes of sunflowerseed oil and 1.89M tonnes of soyabean oil. Rapeseed oil has been the most consumed vegetable oil in the EU since 2000 and has grown considerably from 3.985M tonnes at that time. France, Germany, Italy, the Netherlands, Spain and the UK are the highest consumers in Europe, representing population sizes.

Oilseed processing and refining

European oilseed industry members

FEDIOL represents 85% of the sector’s activity in the EU. This 85% consists of 150 oilseed crushing and vegetable oil refining facilities; 35 small, medium and large companies in 17 member states; and 20,000 jobs.

The EU oilseed processing sector processes more than 40M tonnes/year of oilseeds, according to FEDIOL, and refines an additional 6M tonnes of imported tropical oils and fats including palm oil, palm kernel oil and coconut oils.

The EU is responsible for bringing more than 20M tonnes of vegetable oils to markets around the world.

In 2015, the EU was responsible for crushing 48.35M tonnes of oilseeds, 13.55M tonnes of which was crushed in Germany.

FEDIOL’s members are national associations of seed crushers and oil processors in countries across the EU. These national associations in turn represent specific companies located in their regions. This encompasses around 85% of the market, over 35 companies, around 150 plants and 20,000 direct jobs, as well as turnover of approximately €23bn.

Major companies active within the EU market include: ADM, AAK, Bunge, Cargill, Fuji Oil Europe, IOI-Loders Croklaan, Louis Dreyfus, Olenex Edible Oils, Raisio, Sime Darby Unimills, Unilever and Wilmar.

Is stability being threatened?

EU oilseed and vegetable oil production has been

Final use of Europe’s vegetable oils Table 3 (previous page), shows the consumption split of vegetable oil in Europe by end use. Between 2013 and 2014, it can be seen that vegetable oil consumption for food use declined, previously taking 51% of the market at 12.515M tonnes (out of a total of 24.632M tonnes). In 2014, it took 48% of the market at 13.188M tonnes (out of a total of 27.222M tonnes). The decline in vegetable oil for food was offset by consumption of vegetable oils in biodiesel, which grew between 2013 and 2014 from 35% to 38% (8.510M tonnes in 2013 and 10.260M tonnes in 2014). Other end-use consumption industries include non-energy technical, feed and direct energy (electricity) of which the consumption split was much smaller.

Olive oil According to figures obtained from the International Olive Council, the EU produced 1.434M tonnes of olive oil in 2014/15, which grew to 2.322M tonnes in 2015/16 and a projection of 1.923M tonnes in 2016/17. Imports of olive oil fell dramatically between 2014/15 and 2015/16 from 224,500 tonnes to only 190,000 tonnes. In 2016/17 the projection remained at a similar level of 120,000 tonnes.

EU exports of olive oil have remained relatively stable in the last few years, at 508,000 tonnes in 2014/15, 610,000 tonnes in 2015/16 with a projection of 590,000 tonnes in 2016/17.

Consumption has also remained very stable at around 1.6M tonnes/year in the EU from 2014/15 to the 2016/17 year.

Spain is the largest producer of olive oil in the EU at 1.401M tonnes in 2015/16, forecast to fall slightly to 1.311M tonnes in 2016/17. Greece is the second largest producer of olive oil, producing 474,600 tonnes in 2015/16, forecast to rise to 260,000 tonnes in 2016/17. The third largest olive oil producer in the EU is Italy, which produced 320,000 tonnes in 2015/16 and it is estimated it will produce only 243,000 tonnes in 2016/17.

Consumption of olive oil in the EU is highest in Italy, totalling 583,000 tonnes in 2015/16, projected to shrink to 562,000 tonnes in 2016/17.

This is followed by Spain, which consumed 502,500 tonnes in 2015/16 and Greece, which consumed 140,000 tonnes in the same period.

29 OFI – FEBRUARY 2017 www.ofimagazine.com

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SOURCE: EUROSTAT, 2016

EU ROPE

FIGURE 1: MAIN EUROPEAN IMPORTERS OF INDIVIDUAL VEGETABLE OILS, IN VOLUME, 2015 Palm oil Coconut oil

Groundnut oil

Sesame oil

relatively stable in recent years, although this looks set to change. According to a report published by the EU’s Humboldt Forum for Food and Agriculture research consultancy in January, the ban on neonicotinoid pesticides is costing the EU oilseed rape farming industry €900M/year, the European Crop Protection Association (ECP) reported on 11 January. Neonicotinoid seed treatments have been

accused of threatening bee species as well as other wildlife.

The report, commissioned by Bayer and Syngenta, concluded that the ban has resulted in a negative yield impact of 4% for rapeseed, resulting in 912,000 tonnes of lost harvest and an average of 6.3% of harvest quality losses. Almost €350M was lost in market revenue; €50M in revenue losses

due to lower quality product; nearly €120M in additional production costs and more than €350M in upsteam and downsteam industries; resulting in at least €900M of losses/year for the European rapeseed industry.

Farmers Weekly quotes vice-president of the UK National Farmers Union Guy Smith as saying, “There is clear emerging evidence that farmers both in Britain and in the EU are finding it more difficult to grow profitable crops of oilseeds because of increasing insect damage to crops.”

Farmers across the union are walking away from the production of oilseed crops such as rapeseed, he says.

A report written by independent UK agronomist Alan Dewar found that rapeseed produced in the UK declined from 675,000ha in 2014 to 579,000ha in 2016. 2014 was the last year that neonicotinoid seed treatments were used widely in the UK. Average yields also fell to 3.1 tonnes/ha in 2016, which is a decline of 21.5%, the report says.

Yield decrease, along with a decline in planting area, resulted in a provisional 30% drop in total production in 2016.

The fall in rapeseed production in the EU is being taken up in parts of the world where the ban is not in place, such as Australia, North and South America and Ukraine. Although the total world production of rapeseed and other oilseeds does not look likely to fall, the EU’s share of production is declining, which could have a devastating effect on the union’s total oilseed production

and economy.

Rose Hales is OFI’s editorial assistant

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30 OFI – FEBRUARY 2017 www.ofimagazine.com

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S H IPPIN G & STORAGE

PHOTO: PORT OF ROTTERDAM

Rotterdam: Europe’s finest

AN AERIAL VIEW OF THE PORT OF ROTTERDAM

The Port of Rotterdam is Europe’s biggest and busiest port and the world’s largest outside of Asia. The port handles the import and export of oils and fats including palm, palm kernel, coconut, sunflower, rapeseed and soyabean oils and lard, as well as biofuels from locations across the world and is an important logistics hub for the storage, handling, transhipment and processing of edible oils.

Rose Hales writes

L

ocated in the city of Rotterdam in the Netherlands, the Port of Rotterdam is Europe’s largest and busiest port. The port covers 105km2 and stretches over a distance of 40km. There are five distinct areas within the port and three distribution parks, and it serves as the access point for Europe’s 500M consumers.

In 2015, the port handled 466.4M tonnes of total cargo, as reported by the port authority, more than double the total weight handled by Europe’s second biggest port, Antwerp in Belgium, which handled 208.4M tonnes.

In terms of its position in the world rankings, the Port of Rotterdam is ninth in terms of annual cargo tonnage, and the largest port outside Asia (ports throughout China and Singapore’s port are in the top eight places).

Between 1962 and 2002, Rotterdam was the world’s busiest port, but has now been overtaken by Singapore and Shanghai.

Vegetable oil throughput Vegetable and animal oils and fats passing through the Port of Rotterdam include palm and palm kernel oil, coconut oil, sunflower oil, lard, rapeseed oil, soyabean oil and fatty acids.

Palm oil is by far the largest commodity being discharged and loaded at the port, with a total of 3.3M tonnes in 2015 and 2.77M tonnes in 2016, according to figures provided by the port.

The two largest origin countries are Malaysia and Indonesia – Malaysia contributed 0.9M tonnes in 2016 and Indonesia 0.7M tonnes. Emerging palm oil markets including Colombia, Honduras and Guatemala are contributing more and

more to the palm oil throughput at Rotterdam.

In 2016, their share increased to almost 0.6M tonnes.

The main origin of coconut oil passing through the port is the Philippines and sunflower oil handled at Rotterdam originates mostly from Ukraine.

The port’s biggest destinations for all vegetable and animal oils and fat are Finland, France, Germany, Spain, Sweden and the UK, Ronald Backers from the Port of Rotterdam told OFI in January. Almost all of the exported lard at the port heads to Finland.

Oils and fats storage and handling The Port of Rotterdam is an important logistics hub for the storage, handling and transhipment of animal and vegetable oils and fats in Europe. Oils and fats arrive from areas outside Europe and are distributed around the continent either in their unrefined state, or once they have been refined at the port.

Palm oil and coconut oil arrive in Rotterdam from Asia, soyabean and sunflower oil is shipped in from South America and rapeseed oil arrives from Germany and Canada.

According to the port’s website, four tank storage companies with specialised storage and handling for edible oils and fats operate in Rotterdam. Together

they own a total capacity of 1.2M m3.

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S H IPPIN G & STORAGE

Specialist vegetable oil tank storage terminals VOPAK The Vopak Vlaardingen terminal is a deep sea access terminal in the Port of Rotterdam, and specialises in storing vegetable oils and fats, oleochemicals, biodiesel and base oil. The terminal has a storage capacity of 567,105m3, 351 tanks, a draught of 14m and is on a site of 179,000m3. It has access via barge, rail (see image, right), truck and vessel.

THE NEW RAIL FACILITY AT VOPAK VLAARDINGEN

Non-specialist vegetable oil storage

BOTLEK TANK TERMINAL (BTT) BTT currently has a 200,000m3 storage capacity at the Port of Rotterdam, although it announced in April last year that it would be significantly expanding this capacity to 467,000m3, with construction starting in May. Ultimately, BTT wants to expand its capacity in Rotterdam to 750,000m3.

The existing terminal is on a 100,000m3 site and has 34 storage tanks with capacity per tank ranging between 1,800-17,150m3. The company says these are for mineral oil, biodiesel and edible oils.

The existing terminal is also a so-called ‘zero emissions terminal’, and one of the most environmentally-friendly tank terminals in the world.

MAASTANK The Maastank terminal, wholly owned by Dekker Group since 2015 when it bought out partner Fluvia, is an independent tank terminal in the heart of Rotterdam harbour. It stores and handles vegetable oils, fats, specialities, oleochemicals and base oils.

The terminal has an overall capacity of 48,300m3, divided between 64 tanks of both mild and stainless steel. It offers a full logistical service including barging, tank trucking, tank container leasing and sea-going transportation.

Expansion and facility improvement In recent years, the four tank storage companies have invested heavily in expanding the available storage and improving facilities at the port. According to the Port of Rotterdam, larger tankers can now load and unload at the port, which is an advantage particularly for shipments from Asia.

Tank terminals can now load tank trucks and trains, can transfer cargo onto inland tankers and short sea vessels. Additionally, buoys and dolphins allow ship-to-ship transfers at the port.

Processing and refining at the port

2011

2012

2013

2014

2015

2016

Palm oil

2.46

3.61

3.81

3.16

3.30

2.77

Palm kernel oil

0.43

0.49

0.62

0.55

0.57

0.59

Coconut oil

0.32

0.61

0.67

0.64

0.58

0.48

Sunflower oil

0.34

0.28

0.34

0.38

0.37

0.46

The port has facilities which process palm oil, sunflower oil, rapeseed oil and coconut oil. Overall there are five vegetable oils and fats refineries in the port including four large-scale palm oil refineries, meaning it is a major player supplying edible oils to the European food industry.

The port says that the processes taking place at the port include bleaching, deodorisation, filtering and blending.

The five refineries are run by MaasRefinery, Wilmar Edible Oils, Cargill Refined Oil Europe, IOI Loders Croklaan and Sime Darby Unimills. Between them, they cover an area of 411,000m2 and have a refining capacity of 3.09M tonnes/year, according to information obtained from the Port of Rotterdam’s ‘Facts & figures on the Rotterdam energy port and petrochemical cluster’ 2015.

According to the Port of Rotterdam authority, vegetable oils and fats refined at the port are mainly intended for the food industry. However, in recent years demand has increased considerably for the production of biofuels in Rotterdam.

One of the largest vegetable oil refineries at the Port of Rotterdam is Maastank’s MaasRefinery, which is integrated with the storage facilities of Maastank.

The refinery’s processes include degumming, bleaching, winterisation, deodorisation and high level automation, and its products include high oleic sunflower, sunflower, rapeseed, evening primrose, palm olein, palm stearin, groundnut, shea butter, shea olein, cocoa butter, safflower, palm, coconut, walnut and almond oils.

Palm stearin

0.48

0.45

0.37

0.48

0.42

0.44

Lard

0.05

0.15

0.29

0.37

0.45

0.40

The world’s largest renewable industry cluster

Fatty acid distillate

0.09

0.10

0.29

0.48

0.48

0.35

Rapeseed oil

0.69

0.32

0.60

0.39

0.37

0.28

Soyabean oil

0.21

0.25

0.26

0.19

0.26

0.26

Fatty acids

0.25

0.29

0.28

0.21

0.20

0.18

Other products

0.98

1.04

1.02

0.96

1.04

1.00

Total

6.51

7.60

8.52

7.81

8.05

7.21

KOOLE Koole has a 625,000m3 storage capacity terminal, Koole Tankstorage Pernis BV, in the Port of Rotterdam, which it says will be increasing by an additional 200,000m3 in coming years – to reflect the growing demand for storage in the area. The site is 114,000m3 and it has 260 tanks with tank capacity ranging from 150-22,000m3.

Koole’s terminal is well connected, including a train connection that enables fluids to be transported as far as Germany.

The company lists the products it handles at the port as including vegetable oils and fats, oleochemicals, base oils, waxes, biodiesel and easy chemicals.

SOURCE: BUSINESS ANALYSIS & INTELLIGENCE, PORT OF ROTTERDAM

STANDIC Standic is a liquids tank storage company for liquid chemicals, mineral oils and biofuels. In 2015, it extensively increased its capacity at the Port of Rotterdam with the addition of a new tank pit with 36,000m3 of tank storage, taking the company’s total storage capacity to 230,500m3. It cited a growth in the market for the storage of special chemical products for its expansion.

Standic’s site is approximately 168,000m3 and in 2015, it had 163 tanks, ranging in capacity between 156-6,600m3.

TABLE 1: THROUGHPUT OF VEGETABLE & ANIMAL OILS & FATS AT THE PORT OF ROTTERDAM (TOTAL DISCHARGE IN – M TONNES)

The Port of Rotterdam is the largest renewable industry cluster in the world and the European hub for biofuels, according to its website. It contains five biofuel plants and two biochemical companies, with room for growth, and says it is the ideal location for the supply of biobased feedstocks.

Alternative fuels manufacturers at the Port of Rotterdam include biodiesel, bio-ethanol and renewable diesel. The biofuels produced at the port are used for road transport, shipping and aviation.

The port authority states that a major consideration for the production of biofuels is the location of sufficient biomass – either available or accessible.

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S H IPPIN G & STORAGE

Being located in the Port of Rotterdam means that biofuel producers based there have access to raw materials via inexpensive shipments all year round and from sources worldwide. The port’s logistics network of inland shipping, road, rail and short sea transport means the biofuels can be transported from Rotterdam across Europe, including to customers in Belgium, France, Spain and the UK. In addition, the port has pipelines, which directly connect it with Paris, Frankfurt and Schiphol Amsterdam airports.

Manufacturers in the port include Neste, Biopetrol Rotterdam BV, Biopetrol Pernis BV, and Abengoa. On 23 June last year, SeeNews reported that Abengoa’s Rotterdam assets had been bought by a consortium comprising Belgium’s Alcogroup SA, Vanden Avenne Commodities and Vandema.

The former Abengoa Rotterdam is one of the largest biorefineries in Europe, producing 480M litres/year of ethanol. The facility was shut down in April 2016, following Abengoa’s debt restructuring.

Current manufacturers of biofuel at the Port of Rotterdam produce 2M tonnes/year, with further expansion of capacity possible. According to the Port of Rotterdam’s factsheets, 80ha of space have been reserved for a new industry using biomass as a raw material.

An extensive pipeline network The port has an extensive network of 1,500km of pipes, which connect business within the port and to destinations in Belgium, Germany and the Netherlands. According to the port, the pipes are

a “safe, efficient and environmentally-friendly transport solution for liquid bulk” – which includes the transport of biofuels.

Some pipelines are owned by chemical companies and refineries, as well as ‘common carriers’, which are hireable for long period.

Pipelines can also be leased via Vopak and the Port of Rotterdam Authority’s joint venture MultiCore.

The MultiCore bundle has pipes running past the main liquid bulk industrial areas and runs pipes between the 20km route from Pernis to Europoort.

Rotterdam also has pipeline corridors, ground which is reserved specifically for pipelines. Laying new pipes at the port is therefore a relatively simple task as the corridors are already fully tailored to their designated uses.

A change of an era: the port’s future In April 2016, Port News published a report in which executives at the Port of Rotterdam shared their views on how the port will look in 2050 and what they plan to do in preparation for future development, requirements and trends.

By 2050, the ambition is that global CO2 emissions will be almost zero, according to the recent Paris climate agreement.

One of the first challenges Rotterdam will face as a port is that the international community is moving away from fossil fuels, and Rotterdam is traditionally a major petroleum port. Eric van der Schans, director of environmental management, responded by saying that, “we are not going through an era of change, but a change of an era”. Changes

will have to be made in terms of petrochemical plants currently running on petroleum products as the sector increasingly turns to vegetable oils.

Schans also comments on the need to “close the production and consumption loop” so as to stop wasting raw materials.

The Port of Rotterdam already encourages and has invested in facilities for greener fuel and cleaner vessels. Cleaner vessels receive a port tariff discount, and Schans says the port is a “pioneer” in investing in infrastructure to assist vessels needing to bunker LNG. Another challenge is the viability of the chemical and petrochemical plants currently operating at Rotterdam – will these eventually be forced to close? Schans is adamant that this is not the case, saying that production will simply switch from fossil feedstocks to vegetable-based feedstocks, such as sugarbeet, wheat, soya roughage and wood residues.

He says that this process is already in full swing, as the port already boasts the largest renewable cluster in Europe including four vegetable oil refineries, four biofuels plans and two biochemical production plants.

Schans says the port has ambitions to see significant further growth in the renewable sector, with 80ha being reserved at Maasvlakte 2, 40ha of which are still available. He also goes on to explain that these renewable facilities look exactly the same as their fossil-based counterparts, and use the same conducts and pipelines, for example – just without the huge CO2 emissions.

Rose Hales is OFI’s editorial assistant

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SH OW PREVIEW

Countdown begins for OFI India 2017 IMAGE: ADOBE STOCK

With just three months to go until OFI India 2017 on 19-20 May, the event in Mumbai promises to bring together suppliers, processors, experts and key players across the supply chain to the world’s largest edible oil market

Book a stand!

Exhibition & sponsorship Mark Winthrop-Wallace, Sales Manager E-mail: markww@quartzltd.com Tel: +44 (0) 1737 855 114 Anita Revis, Sales Consultant E-mail: anitarevis@quartzltd.com Tel: +44 (0) 1737 855 068 Nikunj Vishwakarma, India Sales Executive E-mail: nikunj@quartzltd.com Tel: +91 67351022; +93 73517070

www.ofievents.com/india

Register now!

Three registration options 1. Register free of charge for the exhibition online at www.ofievents.com/india 2. Register for the exhibition and the OFI Business Congress & SOPA Soya Conference for £80 (including lunch and refreshment package) at www.ofievents.com/india.

25% discount for SEA, SOPA, OTAI, CSIR-IICT and FOSFA members 3. Register for the Smart Short Course and receive free entrance into the exhibition. Go to: www.smartshortcourses.com/ ofi-india17/program.html

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THE GATEWAY TO INDIA IS ONE OF THE ICONIC LANDMARKS OF MUMBAI, THE HOST CITY OF OFI INDIA 2017

ith just three months to go, the second OFI India exhibition and conference in Mumbai promises to be bigger and better than the launch event which attracted over 600 attendees in 2016.

OFI India 2017 is being held on 19-20 May 2017 at the Bombay Convention and Exhibition Centre (BCEC) in Mumbai, India’s commercial and financial headquarters. It will feature: An international exhibition of suppliers, producers and processors The OFI India 2017 Business Congress & SOPA Soya Conference: ‘New Strategies, New Approaches’ (see programme, opposite).

A Smart Short Course technical programme: ‘Oilseed and Oil Processing Technology – Focus on Mustard Seed, Sunflower Seed and Rice Bran Oil’ (see programme, opposite).

The world’s key edible oil market India is a US$2tr economy, with GDP growing at more than 7% and a population of over 1.2bn people. It is the world’s largest edible oil importer, with an oil and oilseed turnover of US$25bn and import-export turnover of some US$13bn.

India’s demand for edible oils is some 21M tonnes/year. It meets this with domestic production of some 7-8M tonnes and imports of 14-15M tonnes – some 70% of the country’s requirements – valued at over US$12bn. The country’s edible oil imports have soared by almost 50% in the last five years, with imports of palm oil growing by 25% and soya oil jumping by 300%.

India’s consumption growth is pegged at 5%/

year and the country is expected to be consuming around 34M tonnes of edible oil by 2025, with a projected vegetable oil imports bill of US$25bn.

Learn from the experts The two-day OFI India 2017 Business Congress & SOPA Soya Conference will offer delegates the chance to learn from leaders in their fields about the Indian and global marketplace for oils and fats.

Four modules will cover ‘World Supply and Demand – 2017/18 Price Forecast and Outlook’; ‘The Indian Market – Challenges and Opportunities’; ‘SOPA Soya Conference’; and ‘Feedstocks and Applications’ (see programme, opposite page).

A parallel two-day Smart Short Course technical programme will be held for marketing, technical and plant personnel entitled, ‘Oilseed and Oil Processing Technology – Focus on Mustard Seed, Sunflower Seed and Rice Bran Oil’ (see programme, opposite page).

Industry support OFI India 2017 is also supported by the main edible oils and fats associations in India including the Solvent Extractors’ Association of India (SEA); Soybean Processors Association of India (SOPA); Oil Technologists’ Association of India (OTAI); CSIRIndian Institute of Chemical Technology (IICT) and also the Federation of Oils, Seeds and Fats Associations Ltd (FOSFA).

Major suppliers to the edible oils and fats industry have already booked exhibition space at the OFI India 2017 exhibition including Andreotti Impianti, Buhler (India), CM Bernardini, Crown Iron Works/ Kumar Metal Industries, Dalian Baofeng Machinery Manufacturing, Desmet Ballestra, Fenix Process Engineers, HF Press+LipidTech, Mectech Process Engineers, Muyang Co Ltd, SAP Filter, Sharplex Filters, Sundex Process Engineers, Tintometer India and United Engineering (Eastern) Corporation.

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SH OW PREVIEW

OFI India 2017 Business Congress & SOPA Soya Conference: ‘New Strategies – New Approaches’ DAY ONE: FRIDAY 19 MAY 2017

Keynote address: India’s edible oil demand and supply picture Solvent Extractors’ Association (SEA), India India’s biofuels policies Speaker to be confirmed Rice bran oil ... growth story Dr B V Mehta, Executive Director, Solvent Extractors’ Association of India (SEA)

Welcome and opening remarks. Oils & Fats International/Quartz Business Media, UK

Global sunflowerseed and oil production, trade & prices and India’s role in world imports Sergey Feofilov, General Director, UkrAgroConsult, Ukraine World palm oil supply and India’s demand and future outlook Bhavna Shah, Country Representative – India/ Sri Lanka, Malaysian Palm Oil Council

DAY TWO: SATURDAY 20 MAY 2017

Module 1: World Supply and Demand – 2017/18 Price Forecast and Outlook

Register now!

Module 3: Soybean Processors Association of India (SOPA) Soya Conference

Fadhil Hasan, Executive Director, Indonesian Palm Oil Association

www.ofievents.com/india £80 includes lunch and refreshments

Dr Davish Jain, Chairman, Soybean Processors Association of India; President and Managing Director, Prestige Group of Industries, India

G Chandrashekhar, Economic Advisor, Indian Merchants’ Chamber Sumit Gupta, Business Manager, McDonald & Pelz Global Commodities

25% discount for groups of four or more and for SEA, SOPA, OTAI, CSIR-IICT and FOSFA members

D N Pathak, Executive Director, Soybean Processors Association of India (SOPA)

Module 2: The Indian Market – Challenges and Opportunities

20% discount for early bird registration (on or before 19 March 2017)

Module 4: Feedstocks and Applications

Smart Short Course: ‘Oilseed and Oil Processing Technology – Focus on Mustard Seed, Sunflower Seed and Rice Bran Oil’

Winterising Using Centrifuges and Classical Filtration System in Sunflower Oil. Dr Mario Bernardini, Technoilogy, Italy

12.30: Lunch – Visit OFI India Exhibition

15.00: Break – Visit OFI India Exhibition

DAY ONE: FRIDAY 19 MAY 2017

15.30: Advantages of Using Membrane Filter Presses in Palm Oil and PKO Processing.

T Manoharan, Adhithana Engineering Corporation, India

13.30: Fat Modification Processes – Dry Fractionation, Chemical and Enzymatic Interesterification and Hydrogenation. Desmet Ballestra Group, Belgium

8.50: Opening remarks 9.00: Chemistry and Fundamentals of Oils and Fats. Dr. Roland Verhé, Ghent University - Bio Base Europe Pilot Plant, Belgium

Session 3: Fundamentals of Edible Oil Refining 16.00: Review of Degumming and Refining Technologies. Ling Hua, Food & Water Division, Alfa Laval, Malaysia

Session 1: Oilseed Processing 9.30: Optimal Oil Seed Dehulling. Dirk Heinrich, Buhler Group, Switzerland 10.00: Energy Recovery Optimisation in Preparation Plants. Farah Sköld, Solex Thermal Science Inc, Canada 10.30: Break – Visit OFI India Exhibition

DAY TWO: SATURDAY 20 MAY 2017 9.00: Optimising Deodorisation for Quality and Energy. Desmet Ballestra Group, India

11.00: Extraction Fundamentals: Optimising Oil Removal in Extractors. CPM Crown Iron Works, USA (TBN)

9.30: Enzyme Solutions Improve Process Yield and Final Product Qualities. Aindrila Dasgupta, Novozymes South Asia, India

11.30: Desolventising: Balancing Meal Quality with Solvent Recovery. CPM Crown Iron Works, USA (TBN)

10.00: Deodorisation Technology and Automation to Produce High Quality, Low Trans Refined Oil. Aarti Chame, DVC Process Technologists, India

Session 2: Mustard, Sunflower Seed and Palm Oil Processing 12.00: Full-Pressing of Canola and Sunflower Seed with the Two-step Pressing Process.

Bernd Rosner, HF Press+LipidTech, HF Group, Germany 12.30: Lunch – Visit OFI India Exhibition 13.30: Chemical Refining of Oils in Solvent Phase. Birger Horns, GEA Mechanical Equipment, Germany 14.00: Innovative Bleaching. Sarika Wahi, HF Press+LipidTech, HF Group, Germany 14.30: Comparison with Cold Refining

Session 4: Speciality Processing

14.00: Mechanism of Oxidation and Oil Quality Management in Frying and Cooking Oils.

Dr Ignace Debruyne, ID&A, Belgium 14.30: Castor Oil as a Feedstock for Oleochemicals. Dr Rakesh Trivedi, Harcourt Butler Technical University, India 15.00: Break – Visit OFI India Exhibition 15.30: Protein Concentrate Plant Design for Food and Aquafeed Applications. CPM Crown Iron Works, USA (TBN) 16.00: Sustainability and Ingredient Applications in Line with New Indian Food Regulations. DuPont Nutrition & Health, Denmark

10.30: Break – Visit OFI India Exhibition 11.00: Latest Developments in Filtration of Edible Oils and Fats and Biodiesel During Oil Processing. Satish Khadke, Sharplex Filters, India 11.30: Methods to Reduce 3MCPD and GE Content. Marco Muraca, CM Bernardini International, Italy 12.00: Critical Issues in Rice Bran Oil Processing: Deodorisation Process. Dr Rakesh Trivedi, Harcourt Butler Technical University, India

Smart Short Course Registration www.smartshortcourses.com/ ofi-india17/program.html Early Bird Registration (On or before 17 April 2017) US$445 (India Subcontinent); US$695 (Other) Regular Registration (After 17 April 2017) US$545 (India Subcontinent); US$795 (Other) Group Registration Rate: 10% off for three or more; 20% off for five or more US$50 discount for members of supporting organisations (OTAI, CSIR-IICT, SEA, SOPA, FOSFA International)

35 OFI – FEBRUARY 2017 www.ofimagazine.com

India 2017 preview .indd 2

06/02/2017 12:24

STATISTIC S

BIODIESEL VS DIESEL PRICES, EUROPE (US$/LITRE)

STATISTICAL NEWS FROM MINTEC Diesel and biodiesel

UNLEADED PETROL VS ETHANOL PRICES, USA (US$/GALLON)

EU diesel prices rose in 2016 and closed the year up 56% year-on-year. The increase was supported by higher crude oil prices as OPEC members agreed to cut production for the first time in eight years and non-OPEC producers also joined to cut production.

Global crude oil production fell month-on-month by 0.6M barrels/day (bbl/d) to 97.6M bbl/d in December.

Reports of decreasing global supply surplus also supported higher prices. However, non-OPEC production is forecast to rise by 385k bbl/d in 2017, mainly due to increasing production in the USA. EU biodiesel prices are up 10% year-on-year after they gained support from rapeseed prices in November 2016, as the oilseed is the dominant feedstock of biodiesel in the EU.

Unleaded petrol and ethanol US unleaded petrol prices rose steeply in the last two months of 2016. In addition to the increase of crude oil prices, higher than usual exports also supported the uptrend. However, the upswing of ethanol prices were limited by the record production, which rose above 1M barrels/week in the last months of 2016.

Rapeseed and rapeseed oil In 2016, rapeseed oil prices generally trended with the fluctuations of the vegetable oil market that was dominated by supply concerns of palm oil. However in Q4 2016, rapeseed oil developed an unusual price premium over soyabean oil, due to supply concerns of rapeseed. EU rapeseed production is forecast down 10% year-on-year in 2016/17.

In addition, the increase in prices for rapeseed oil has also encouraged crushers to process higher levels of rapeseed, reducing supplies further. Rapeseed ending stocks are forecast to be down 54% year-on-year at 0.9M tonnes. Rapeseed oil production in the EU is forecast down 4% year-on-year at 9.7M tonnes in 2016/17.

RAPESEED OIL PRICES (EU/TONNE)

Oct 16

Nov 16

Dec 16

Jan 17

827 712 678 1,514 840 818 1,375

849 706 671 1,443 893 821 1,290

858 739 698 1,523 866 823 1,426

879 778 738 1,649 901 837 1,590

862 757 712 1,733 909 821 1,668

Mintec works in partnership with sales, purchasing and supply chain professionals to deliver valuable insight into worldwide commodity and raw materials markets using innovative technology and a knowledgeable team of specialists. We provide independent insight and trusted data to help the world’s most prestigious brands to make informed commercial decisions.

966 229

953 226

990 235

1,053 250

1,066 253

Tel: +44 (0) 1628 851313 E-mail: sales@mintecglobal.com Website: www.mintecglobal.com

PRICES OF SELECTED OILS (US$/TONNE)

Soyabean Crude Palm Palm Olein Coconut Rapeseed Sunflower Palm Kernel Average price INDEX

2015

Sept 16

747 637 602 1,099 773 846 901 801 190

36 OFI – FEBRUARY 2017 www.ofimagazine.com

Statistics FEB.indd 1

02/02/2017 09:21

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