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Exotic fats for chocolate

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Leading edge technologies for the oils & fats industry

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

CONTENTS FEATURES VOL. 32 NO. 7 SEPT/OCT 2016

PROCESSING

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

3-MCPD and GE: a new challenge

NEWS & EVENTS 2

Comment

Take-off for deal on aviation emissions?

SPECIALITY FATS

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Exotic fats for chocolate

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COFCO completes full Nidera buy-out

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NEWS

COMMENT

Take-off for deal on aviation emissions? A

ugust is the holiday season throughout Europe, when children have their longest break from school and families take time off, some jetting off for a break to another country. We now take flying for granted and a staggering 3.5bn passengers were carried by the world’s airlines in 2015. That’s nearly half the global population of 7.4bn. But aviation has become an increasing focus of those concerned with climate change. In 2012, the industry produced 689M tonnes of CO2 or around 2% of the global total and this is expected to treble by 2050. The industry was controversially excluded from the landmark Paris Climate Agreement (see Comment, OFI June 2016) but this autumn is when the UN’s International Civil Aviation Organization (ICAO) presents its plans for a global market-based measure (GMBM) scheme for aviation, for adoption at its General Assembly. The ICAO sets standards for international aviation and the assembly gathers only once every three years, making the 27 September-7 October meeting a critical time for action. According to James Murray of BusinessGreen, an aviation emissions deal is likely because the ICAO is under pressure to deliver results. “Similarly, the EU only suspended its legislation bringing flights in and out of the bloc into its emissions trading scheme on the understanding a new international agreement would be reached. If the talks this autumn falter, the EU would be obliged to start requiring international carriers to begin purchasing carbon allowances again, reigniting a major trade row with the USA and China in the process.” Market-based measures are key In an MBM scheme, emissions would be capped at 2020 levels (what the airline industry has committed itself to) and aircraft operators can compensate for their emissions by buying emissions units (one unit being equal to one tonne of CO2) from other carbon market programmes or find another way to limit emissions through biofuels or other technologies. It is clear that a good MBM is key to meaningful emissions cuts. Earlier in March, leading environmental NGOs launched their own campaign to cut aviation emissions, called FlightPath 1.5, which is pushing for an aggressive and transparent ICAO deal that: Initially caps net carbon emissions of global aviation at 2020 levels; Encourages airlines to meet the cap by cutting their own emissions and lets them use market-based measures as well – but only if those measures deliver high-quality emission reductions and lowcarbon biofuels that promote sustainable development; Reviews the cap regularly, so that aviation’s climate pollution can be ratcheted down in line with the Paris target of limiting temperature increases to 1.50C above pre-industrial levels. “We can’t assume that biofuels and other radical technological breakthroughs will automatically materialise and put aviation on a flightpath in line with 1.5°C,” says Tim Johnson, director of Aviation Environment Federation, one of the participating NGOs. “A welldesigned market-based measure is the safety net the aviation industry needs.” FlightPath itself says: “This is the moment to make sure that ICAO’s MBM is strong enough to prevent serious climate impacts. The world can’t wait to 2019 and debate this issue again.”

COFCO completes full Nidera buy-out C

hina’s state-owned agricultural trader COFCO Corp announced on 23 August that it had taken full ownership of Netherlands-based grain trader Nidera NV following an agreement to buy the 49% share it didn’t already own from Cygne BV, a company controlled by the family that founded Nidera. The deal for an undisclosed sum is expected to be completed in the fourth quarter, subject to regulatory approvals. It follows in the wake of COFCO’s buy-out of the Noble Group’s agricultural unit in March for US$750M to form COFCO Agri, giving COFCO full ownership of two leading global agri-businesses. “This acquisition represents an important accomplishment for COFCO International as we continue to realise our vision of building a world-class global agribusiness,” said Patrick Yu, president of COFCO, chairman of COFCO International and chairman of Nidera’s supervisory board. COFCO will start to integrate COFCO International, COFCO Agri and Nidera when the deal closes, led by COFCO International CEO Matt Jansen. “Our combination enlarges the playing field and opens up new

opportunities that were previously closed to us as separate companies, but that we can now pursue together,” he said. “This significantly accelerates the progress we have made in building a global leader in the international agricultural and food products industries.” COFCO International is the overseas investment and management platform for the agribusinesses of COFCO, including COFCO Agri, which trades and processes a wide range of agricultural products including grains, oilseeds, sugar, cocoa, coffee and cotton. COFCO Agri had sales of US$16.9bn last year. It has been expanding into its singular lacking region – North America – with the establishment of a US ethanol trading desk in May and the opening of its first trade office in Canada in June (see News, OFI July/August 2016). Nidera had an annual turnover of US$18.5bn in 2015 but posted its first loss in five years as well after a rouge trader incurred losses of some US$200M in the biofuels market. COFCO bought its initial 51% stake in Nidera in 2014 for a reported US$2.4bn.

COFCO-Chinatex merger approved

hina’s State Council has approved the merger of China National Cereals, Oils and Foodstuffs Corporation (COFCO) and Chinatex Corp, which specialises in edible oils and textiles, Reuters reported on 14 July. Both companies are state-owned enterprises and the merger had been expected as part of the country’s efforts to improve the competitiveness of its state-owned sector, Reuters said. On completion of the merger, Chinatex will become a subsidiary of COFCO, China’s largest food processer, manufacturer and trader. Chinatex has two core businesses. Its textiles business covers the trading and manufacturing of cotton, wool, yarns, fabrics, home furnishing textiles and garments. Its grains and oils business includes the trading, processing and warehousing of soyabean, corn, wheat, rapeseed, soyabean oil and palm oil. According to Chinatex’s website, it is China’s largest soyabean trader, one of the country’s largest edible oil traders and has one of China’s largest edible oil extraction facilities. It operates 10 oil extraction plants and two storage plants, with storage capacity totalling 500,000 tonnes and a crushing capacity of 22,000 tonnes/day or more than 600M tonnes/year, which makes it one of the top three domestic soyabean crushers. Within edible oils, Chinatex has nine subsidiaries operating in Guangdong, Fujian, Liaoning and Sichuan provinces and two overseas subsidiaries in Brazil and the USA involved in oilseeds and oils purchasing.

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NEWS

Cargill selling two European oilseed plants to Bunge

argill has agreed to sell two oilseed processing plants and businesses in the Netherlands and France to Bunge for an undisclosed sum, the companies announced on 5 August. In the Netherlands, the deal includes Cargill’s soyabean and rapeseed crush and soya oil refining facility in the Port of Amsterdam, as well as part of its bulk port terminal assets dedicated to supporting discharge and storage of raw materials for the crush plant. In France, it includes the soyabean and rapeseed crush facility located in the Port of Brest. “The total processing capacity at the two locations is approximately 2M tonnes/year,” the

companies said. “The assets are highly complementary to Bunge’s existing soya processing operations in Europe, and will allow Bunge to further expand into key northern European destinations, grow its presence in Europe’s protein market, and further optimise global flows and logistics.” Cargill would retain its two other soyabean processing facilities in western Europe, in the ports of Barcelona, Spain and Liverpool in the UK. Cargill said these plants were firmly integrated with a number of its other businesses serving local customers in the food and feed sectors in Spain and the UK. The deal is subject to competition clearance

and employee consultation. Cargill has been reshaping its operations over the past year, agreeing to sell its farm retail business to Calgary-based fertiliser group Agrium in July (see News, OFI July/ August 2016) and exiting businesses such as steelmaking, hedge funds, US pork production and dressings and sauces, according to the Financial Times. In July, Bunge also announced a crushing joint venture in Vietnam with leading Asian agribusiness group Wilmar (see News, OFI July/August 2016) and the expansion of its logistics partnership with agricultural trader and producer Amaggi in Brazil (see Transport News, p?)

Sequencing of peanut DNA promises better varieties

global team of 51 scientists from four countries have decoded the DNA sequencing of the ancestor of the peanut, which could lead to the development of improved groundnut varieties with higher productivity and oil yields, drought and disease tolerance, free of aflatoxins and allergens, Hindu Business Line reported on 1 June. “This will provide an efficient road map for sustainable and resilient groundnut production to improve the livelihoods of smallholder farmers, particularly in the marginal environments of Asia and sub-Saharan Africa,” said David Bergvinson, director general of the International Crops Research Institute for the Semi-Arid Tropics (Icrisat), one of the participating institutes.

SOME 40M TONNES OF GROUNDNUTS ARE PRODUCED EVERY YEAR WORLDWIDE

The team decoded the DNA sequencing of the groundnut’s ancestor, the diploid A-genome (Arachis duranensis).

Some 40M tonnes/year of peanuts are produced globally with leading producers including China, India and the USA

Continuing decline of spreads unit at Unilever

nilever released its first-half 2016 results on 21 July, reporting underlying sales growth across its grocery and ice cream brands, but continued decline with spreads, just-food said. The consumer goods giant reported group-wide underlying growth of 4.7% in the six months to end of June. “Despite a challenging environment with slower global economic growth and intensifying geopolitical instability, we have again grown profitably in our markets,” CEO Paul Polman said. Unilever conceded that its spreads business continued to decline, attributing this to continued market weakness but stressing that it was working to turn around its brands, just-food said. “In spreads, Flora highlighted its plant-based health credentials with a new advertising campaign and introduced a dairy-free variant in the UK.” According to the Wall Street Journal, Unilever is the world’s largest margarine maker and a large big part of the problems for spreads is the revival of butter,

considered to be more wholesome and natural. Unilever has tried to stem the decline of its margarine division – said to be worth around US$7bn – by splitting it into a standalone baking, cooking and spreads subsidiary in December 2014, after two years of disappointing growth. The spreads unit – which includes brands such as Flora, I Can’t Believe It’s Not Butter and Promise – accounted for about 4% of Unilever’s US$58bn in sales in 2015, according to Bloomberg. A new chief was appointed to the unit in January 2016, amid speculation that the company might sell it. Unilever’s total turnover for first-half 2016 dropped 2.6% to €26.3bn, just-food said. Operating profit fell 0.1% to €3.8bn but net profit rose 2% to €2.7bn. Commenting for the rest of 2016, Polman said: “We have been preparing ourselves for tougher market conditions in 2016 and do not see any sign of an improving global economy. Our priorities continue to be volume-driven growth, steady improvement in core operating margins and strong cash flow.”

IN BRIEF RUSSIA: A World Trade Organization (WTO) panel ruled on 12 August that Russian import duties on palm oil, paper and refrigerators had exceeded its ‘bound rates’, the first time the WTO has ruled against Russia since it joined the WTO in August 2012. The EU requested the WTO to rule on the issue in October 2014. In the case of palm oil products, “Russia has a bound rate of 3% yet applied an alternative duty of ‘3%, but not less than €0.09/kg’ at the date of the panel’s establishment”, the European Commission (EC) said in a press release. The EC said the EU’s annual exports of palm oil to Russia were worth €50M. Russia had 60 days to appeal the ruling. USA: Leading microalgae pioneer TerraVia announced on 4 August that it had agreed to sell a majority stake in its Algenist skin care brand to private equity firm Tengram Capital Partners for some US$20M. They two companies will also form a partnership to develop new beauty products. The Algenist beauty brand was launched in 2011 and includes products based on TerraVia’s algae-based ingredients including alguronic acid and microalgae oil. The deal is expected to close by the end of third quarter 2016. TerraVia will retain an interest of about 20% in Algenist and will continue to supply ingredients for the Algenist product line.

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NEWS

RSPO lifts its suspension of IOI Group T

he Roundtable on Sustainable Palm Oil (RSPO) has lifted its suspension of Malaysia’s IOI Group, effective 8 August. IOI was suspended by the RSPO’s Complaints Panel (CP) on 1 April following a complaint made by Aidenvironment against PT Sukses Karya Sawit, PT Berkat Nabati Sawit and PT Bumi Sawit Sejahtera – all IOI subsidiaries – alleging that they had failed to protect forests and peat areas. In a statement on 5 August, the RSPO said it was satisfied that IOI had met the conditions it had set following the complaint. This includes excluding areas opened up to 1 April 2011 in Ketapang, West Kalimantan, Indonesia from future RSPO certification; and certifying most of the land which are non-

IN BRIEF NEW ZEALAND: Global dairy co-operative Fonterra announced a new palm oil standard on 12 August that commits the multinational to buy only segregated palm oil by 2018. “The new standard also requires us to work with suppliers of palm products to ensure that plans are in place for full traceability to plantation by 2018,” said Fonterra’s director of social responsibility, Carolyn Mortland. Fonterra said its new standard would apply to both palm oil and palm kernel expeller (PKE), which was used by some farmers as animal feed. It sold about one-third of the PKE used in New Zealand through its Farm Source stores and it sourced PKE from only one supplier – Wilmar International. Fonterra is responsible for some 30% of the world’s dairy exports, with revenue exceeding NZ$19.87bn (US$14.5bn). INDIA: The Food Safety and Standards Authority of India (FSSAI) has published draft amendments to the Food Safety and Standards Regulations proposing that chocolate can contain vegetable fats that are not cocoa butter so long as it does not exceed 5% of the finished product, the Indian Express reported on 7 August. Amit Lohani, convenor of the Federation of Indian Food Importers said the new law would allow the import of well-known brands previously unavailable in India due to their vegetable oil content.

compliant with RSPO’s standards in the future. “The RSPO welcomes the good progress achieved so far towards the resolution of this case,” it said. However, the RSPO said IOI’s action plan would be subject to independent ground verification by a team of experts, which would be appointed by the RSPO Secretariat within 30 days. “The findings of the independent ground verification team shall be scrutinised by the CP, which will advise the Board of Governors to reimpose the suspension if the verification team find significant failures in the implementation of IOI’s commitments to the RSPO.” IOI was expected to submit its quarterly progress report and at the end of a 12-month period, an independent ground verification

team would again conduct a review. IOI’s suspension led to major multinationals, including Unilever, Kellogg’s and Mars, to drop the group as an approved palm oil supplier. According to BusinessGreen, Unilever would now consider whether to re-start its commercial relationship with the company. “Unilever is looking into the decision taken by the RSPO and, based on this assessment, will decide on the right approach and next steps,” the multinational said in an emailed statement to BusinessGreen. IOI is one of Malaysia’s biggest conglomerates, with operations in plantations, oleochemicals, speciality fats and real estate. It has about 152,000ha of oil palm plantations in Malaysia and 83,000ha in Indonesia.

GreenPalm endorsement to end

he Roundtable on Sustainable Palm Oil (RSPO)’s endorsement of GreenPalm will end this December, it said in its newsletter on 30 August. Instead, RSPO certified volumes can be sold as credits via the Book & Claim model on the RSPO eTrace platform. “Only credits traded via the RSPO eTrace platform can have a RSPO claim as it will be verified during RSPO audits,” the roundtable said. “Volumes sold via GreenPalm in 2017 are not endorsed by the RSPO and will not be verified during the RSPO audits. Hence, they cannot carry a RSPO claim.” The Book & Claim model allows manufacturers and retailers to buy certificates from an RSPO certified palm oil grower to offset each tonne of palm oil or palm kernel oil they use. There is no guarantee that the end product contains certified sustainable palm oil, but this option directly supports RSPO certified growers and farmers.

The RSPO said that from January 2017, its eTrace platform would allow: RSPO certified mills to sell certified sustainable palm oil (CSPO) credits. RSPO certified palm kernel crushers to sell certified sustainable palm kernel oil (CSPKO) and certified sustainable palm kernel expeller (CSPKE) credits. Independent smallholders (IS) to sell IS-CSPO, IS-CSPKO, and IS-CSPKE credits. “Traders, processors and refiners cannot sell credits,” the RSPO said. “In order to align the credit trading with the physical supply chain models, mills will no longer be able to sell CSPKO and CSPKE credits.” The RSPO said that GreenPalm certificates bought in the 2016 calendar year could still carry a RSPO claim and be used to cover the palm oil, palm kernel oil and palm kernel expeller used in the products.

Oil replacement

cDonald’s China is planning to replace the palm oil-based cooking oil they currently use next year, the Beijing Times reported on 15 July. McDonald’s China CEO Phyllis Cheung said the fast-food giant was testing a new sunflowerseedcanola cooking oil which would be introduced next year despite an increase in cost. The change was being made to reduce the consumption of saturated fatty acids and improve heath, the report said. McDonald’s China restaurants would also offer more healthy choices including fruits, vegetables and grains, Beijing Times said. It had already piloted selling apple slices in Beijing, Shanghai, Guangzhou, Shenzhen and Tianjin. The fast-food chain had also reduced the amount of salt it used by 450 tonnes since 2010, including a 20% cut in the amount of salt used on fries. McDonald’s is in the process of selling its China and Hong Kong stores in an auction that could fetch up to US$3bn, Reuters said.

India’s Kerala state first to introduce fat tax

he southern Indian state of Kerala has become the first in the country to introduce a “fat tax” on burgers, pizzas, doughnuts and tacos in branded restaurants, reports the BBC on 13 July. According to a national family health survey, Kerala has the second highest number of people suffering from obesity in India after Punjab. The 14.5% fat tax has been imposed by the new Communist-led state government, which said it was aimed at making people more conscious about food choices and to curb obesity. Finance Minister Thomas Isaac said the tax was a preventative measure, as the food habits in Kerala were changing, moving away from traditional food.

BBC said global fast food chains such as McDonald’s, Burger King, Domino’s and KFC were relatively new to Kerala; McDonald’s had seven outlets and Burger King had just launched its first outlet in the state. AFP said most high-fat snacks and other fast-food items in India were still sold by largely unregulated street vendors, rather than branded chains. The state government said the tax only targeted the “elite section of the society” and should get people thinking about what they ate. AFP said while India had high rates of malnutrition, lifestyle-related health issues including diabetes and obesity were also major problems.

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21/09/2016 09:35

BIOFUELS NEWS

IN BRIEF IRAN: An undisclosed Italian private investor will invest US$450M to build a plant to produce bioethanol fuel from around 1M tonnes/year of inedible wheat at the Amirabad Special Economic Zone (ASEZ), in the north of Iran, reports the Tehran Times. POLAND: The United States Department of Agriculture says only about 200,000 tonnes/ year of ethanol is being produced at the Poland’s 11 ethanol plants despite installed production capacity of 511,000 tonnes, despite a 7.1% blending mandate, set to increase to 10% in 2020, reports Biofuels Digest. The country currently produced about 800,000 tonnes/year of biodiesel from rapeseed. INDONESIA: Asia Pulp & Paper (APP), one of the world’s largest pulp, paper and packaging firms, has teamed up with the government of West Kalimantan and the Belantara Foundation to find suitable land for smallholder farmer cooperatives to plant Kemiri Sunan (Reutealis trisperma (Blanco) Airy Shaw) as a biofuel feedstock, edie.net reported on 5 July. Also known as Philippine tung, Kemiri Sunan could yield up to 10 tonnes/ ha, with the trees developing broad canopies and deep root systems, helping to reduce soil erosion and water evaporation, the report said. VIETNAM: The Dung Quat ethanol plant has been closed following unpaid debts of US$58M and heavy losses since its commissioning in 2012, reported Biofuels Digest in July.

Auditors’ court finds flaws in EU biofuel certification system

he European Court of Auditors has found that weaknesses in the EU’s system of certifying biofuels could be undermining its 2020 Renewable Energy Directive targets for sourcing 10% of the energy in transport from renewable sources. “Most biofuels placed on the EU market are certified through voluntary schemes recognised by the European Commission (EC),” the court said in a press release on 21 July. “But our auditors concluded that the schemes suffer from weaknesses in the EC’s recognition procedure and in its supervision.” The auditors found that the EC did not require schemes to verify whether biofuel production carried risks such as conflict over land ownership, forced or child labour, poor working conditions for farmers and dangers to health and safety.

“The schemes’ assessments did not cover the impact on biofuel sustainability of indirect land use change (ILUC – where more land is cultivated for food to make up for crops used in biofuel production). The auditors accept that assessing ILUC change presents technical difficulties but, without this information, the relevance of the certification system is undermined.” The court said that in addition, the EC did not supervise the operations of voluntary schemes and therefore could not be sure that these actually applied the standards on which they had been certified or detect infringements. The auditors said the EC should ensure that schemes: assess how much biofuel production entails significant socio-economic risks and ILUC; verify that feedstock producers comply with environmental

requirements for agriculture; provide sufficient evidence of the origin of waste and residues used for biofuels. The EC itself should also check that schemes comply with the standards presented at the time of recognition; set up transparent complaints systems; seek evidence from member states on the reliability of their biofuels statistics and harmonise the definition of waste substances. The European renewable ethanol association (ePure) said it welcomed the EC’s review of all bioenergy after 2020 and said that the Commission should adhere to its recent GLOBIOM study to differentiate between biofuels that were sustainable, such as European ethanol, and biofuels with unacceptably high levels of ILUC risk, such as palm oil.

First African flight using bio-jet fuel Neste UCO trial

frica’s first passenger flight fuelled with sustainable bio jet-fuel took off on 15 July and flew from Johannesburg to Cape Town. The South African Airways (SAA) and low-cost carrier Mango flight carried 300 passengers and used a blend of 30% aviation biofuel produced from Sunchem’s nicotine-free tobacco plant, Solaris, refined by AltAir Fuels, and supplied by SkyNRG. The flight coincided with the 100th anniversary of Boeing International, which launched a sustainable aviation fuels collaboration with SAA in 2013, resulting in Project Solaris in 2014, in which farmers in South Africa’s Limpopo province grow Solaris as a feedstock for biofuels. The cross-bred variety of tobacco contains no nicotine and has high seed and limited leaf production compared to traditional tobacco. “These normally undesirable traits make Solaris an ideal feedstock for biofuel production,” Boeing said.

innish fuel producer Neste is planning a trial project to the end of 2017 to convert used cooking oil (UCO) into biodiesel at its biorefinery in Porvoo, reports Biofuels International. Neste was aiming to process 20,000 tonnes/year of UCO to produce its NExBTL brand biodiesel, the report said UCO would comprise 4% of all renewable feedstocks and 0.2% of all feedstocks used at the refinery during the trial. Experiments on UCO in 2015 were inconclusive because the volumes used were too small, Neste said.

UN says sustainable jet fuels could cost $60bn/year from 2020

he UN’s aviation body has estimated that replacing conventional jet fuels with sustainable alternatives would cost up to US$60bn/year from 2020 to 2050, Climate Home reported on 2 August. This would require around 170 new bioenergy refineries to be built each year through to mid-century, catering for 4% annual growth through 2030 and beyond, the report said. “Even under this scenario, achieving carbon neutral growth exclusively from the use of sustainable alternative fuels is unlikely to happen in 2021 or shortly thereafter as an initial ramp-up phase is required before production of alternative fuels can reach the

levels mentioned above,” the International Civil Aviation Organisation (ICAO) report said. The international aviation industry has committed to carbon neutral growth by 2020 and ICAO said aviation now accounted for 2% of global CO2 emissions but was expected to rise as the industry expanded through Asia, Africa and South America, the report said. Ethiopia, Malawi, Serbia, Sierra Leone, Uganda and Vietnam and were among countries projected to see 7-8% growth in flights each year. CO2 emissions from flying were likely to hit 682-755 megatonnes by the end of the decade and 2,500MT by 2050, the ICAO said. Better engines, paints, flying techniques and

improvements to infrastructure could knock off just under 1,000MT/year, leaving a gap of 1,039MT. The ICAO said the aviation industry could rely heavily on offsetting its greenhouse gas emissions from 2020. But the costs of offsetting emissions were likely to be steep, ranging from US$1.5-6.2bn in 2025 to US$5.3-23.9bn in 2035, depending on carbon prices. “The analysis also shows that the cost of carbon offsetting for operators would range from 0.2-0.6% of total revenues from international aviation in 2025; and 0.5-1.4% of total revenues from international aviation in 2035,” the report said.

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BIOFUELS NEWS

Abengoa’s updated restructuring includes $1.3bn funds T

RFA calling for probe into RIN market fraud

he Renewable Fuels Association (RFA) is urging the Commodity Futures Trading Commission (CFTC) and the Environmental Protection Agency (EPA) to investigate possible manipulation in the US market for biofuels credits. In a letter on 1 August, the RFA said it was concerned about “recent irregular activity and volatility” in the market for Renewable Identification Number credits (RINs), which it said had climbed about 30% since May. “The recent spike in RIN prices appears driven by something other than basic supplydemand fundamentals,” the RFA said. A RIN is a serial number assigned to a batch of biofuel to track its production, use, and trading as required by the US Renewable Fuel Standard. RINs can be sold and traded separately from the biofuels that created them, giving rise to instances of RIN fraud. In March, the CFTC and the EPA signed an agreement regarding RINs in which the CFTC agreed to help the EPA investigate possible fraud and market abuse of RINs, Reuters said.

to “reinitiate normalised operations”. A restructuring would apply to the whole of the Seville-based multinational, which is selling its non-core assets – including all its firstgeneration biofuel plants – in order to focus on engineering and construction activities. In the USA, a bankruptcy court gave the green light on 31 August for Abengoa to sell five ethanol plants for US$355.5M which it had put up for auction on 22 August. Green Plains Inc will pay US$237M for three plants in Madison, Illinois; Mount Vernon, Indiana; and York, Nebraska, with a combined production capacity of 236M gallons/year. KAAPA Ethanol LLC will buy Abengoa’s ethanol

facility in Ravenna, Nebraska for US$115M, while ICM Inc will purchase a plant in Colwich, Nebraska for US$3.15M. Abengoa still has two ethanol plants running in Spain – Cartagena with a capacity of 151,000m3/year and La Coruña with a capacity of 197,000m3/year – and one 300,000m3/year plant in the Lacq region of France, according to Platts. Its 240,000m3/year ethanol plant in Spain’s Salamanca is currently closed, along with its largest European facility – a 577,000m3/year plant in Rotterdam. Brussels-based ethanol production and trading company Alcogroup and its partners have agreed to buy the Rotterdam plant.

50 2015

roubled Spanish renewable energy and ethanol producer Abengoa SA presented an updated restructuring plan on 16 August – including US$1.3bn in new loans – that 75% of its creditors must approve before 28 October if it is to avoid becoming Spain’s largest ever bankruptcy. In its 16 August presentation, Abengoa said it had completed a critical milestone in its restructuring process after first presenting a proposal on 16 March. It said it had reached an agreement on 10 August with its Bank Coordination Committee and the New Money Investor Group to secure US$1.3bn in new loans and €307M of bonding lines to enable it

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EC appeals court ruling

he European Commission (EC) filed an appeal on 26 August against a European Court of Justice (ECJ) ruling which annulled anti-dumping duties on US ethanol. The ECJ ruled on 9 June that the EU’s 9.5% anti-dumping duty on US ethanol produced by companies that had been selected as part of a sample group in a probe was invalid because the EC was required by EU law to give each sampled US company its own anti-dumping rate (see Biofuel News, OFI June 2016). The decision affected imports from four US producers – Patriot Renewable Fuels, Plymouth Energy, Poet and Platinum Ethanol. During the appeal process, the duty will remain on all US ethanol. The duty was imposed in February 2013 following an EC investigation launched in November 2011. The US Renewable Fuel Association said it would continue to fight to ensure the duty was removed.

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BIOTECH NEWS

IN BRIEF EUROPE: The European Commission announced on 22 July that it had authorised three GM soyabeans for food and feed use in the EU including Monsanto’s Roundup Ready 2 Xtend soyabeans and Bayer Crop Science’s FG 72, following months of delay due to concerns over the herbicide glyphosate. The authorisations – valid for 10 years – do not cover cultivation in the EU. Any products produced from these GMOs will be subject to the EU labelling and traceability rules. Monsanto said its new GM soyabeans would be the industry’s first biotech product with tolerance to both glyphosate and dicamba herbicides. USA: German chemicals company Bayer AG will halt US sales of insecticides containing flubendiamide after the US Environmental Protection Agency (EPA) ruled that it posed risks to the environment, reported Reuters on 29 July. Flubendiamide is the active ingredient in Bayer’s Belt and Nichino America’s Tourismo and Vetica insecticides and is used on crops including soyabeans, almonds and tobacco. According to the Flouride Action Network, the EPA’s Environmental Fate and Effects Division concluded last year that “significant effects to aquatic organisms due to the use of flubendiamide could potentially occur in as little as two years” and asked Bayer and Nichino America to voluntarily cancel their registrations. The firms challenged the decision and the appeal went to the EPA’s Environmental Appeals Board. Farmers and retailers would be able to use up their existing supplies of the chemical. AUSTRALIA: Segregating GM canola from conventional varieties has given the industry a US$285M boost, says Australian Oilseeds Federation president Jon Slee, the Weekly Times reported on 26 July. Slee said market segregation was put in place in 2007 and farmers had received a US$19 tonne premium for their non-GM canola since 2010, equating to US$285M across the supply chain.

Bayer to acquire Monsanto for US$66bn in record cash deal A

fter months of talks, German chemicals giant Bayer AG has clinched a deal to buy US seeds leader Monsanto for US$66bn, the largest foreign takeover by a German company and the world’s biggest cash acquisition on record. The deal, announced on 14 September, will create the world’s largest seeds and pesticides company with combined sales of some US$25.8bn based on 2015 figures. It combines Bayer’s strengths in agricultural chemicals with Monsanto’s strengths in seeds and traits and is expected to significantly expand Bayer in the US agriculture sector. However, a Bayer takeover of Monsanto was likely to draw close scrutiny from anti-trust regulators because of the sheer size of the combined company and the control it would have over the global seeds and sprays markets, the BBC said. The companies said they expected the deal to close at the end of 2017 but they will need the approval of some 30 competition agencies globally, which are likely to demand disposals. Bayer and Monsanto plan to locate their worldwide

seeds and traits business at Monsanto’s St Louis, Missouri headquarters. The crop protection and overall crop science headquarters will be at Bayer CropScience’s Monheim, Germany base. John Colley of Warwick Business School, UK said Bayer’s hand was to some extent forced by recently agreed deals of ChemChina buying Swiss-based agribusiness Syngenta for US$44bn cash, rapidly followed by the US$130bn merger of Dow Chemicals with DuPont. “Falling crop prices meant that demand and prices were declining for seeds and agricultural chemicals such as herbicides and pesticides. The industry is responding to adversity with a series of mergers which are expected to have three main results: cost reduction, less competition and growth. “Bayer was clearly concerned at being left behind and was running out of options for merger targets. Clearly Bayer will realise cost savings from the acquisition but they have had to pay an enormous price for Monsanto at a 44% premium to the previously undisturbed share price.”

Monsanto withdraws GM application in India

umber one global seed supplier Monsanto Co has withdrawn an application for approval of its next generation of GM cotton seed in India, in a continuing row with the government over royalties and technology sharing, Reuters said on 25 August. A Monsanto spokesman said the withdrawal was “an outcome of the uncertainty in the business and regulatory environment” but the move had “no impact on our current cotton portfolio being sold in India”, the report said. A letter sent on 5 July by Monsanto’s local partner in India, Maharashtra Hybrid Seeds Co Ltd (Mahyco), had objected to a government proposal to force Monsanto to share its technology with local seed companies. Mahyco wrote that the proposal “alarmed us and raised serious concerns about the protection of intellectual property rights” and asked the Genetic

Engineering Appraisal Committee (GEAC) to return data submitted by it as part of its application for Bollgard II Roundup Ready Flex technology. Reuters said that the government had temporarily withdrawn its order and was seeking and evaluating feedback from stakeholders. Monsanto is also in dispute with India over a proposal to impose a 70% cut in royalties that local firms pay for its GM cotton seeds (see Biotech News, OFI May 2016). According to Reuters, India is Monsanto’s second largest market outside the Americas, bringing in royalties of 6.5bn Indian rupees (US$97M). India first allowed GM cotton cultivation in 2002 by approving Monsanto’s single gene Bollgard I technology. Bollgard II was approved in 2006, turning the country into the world’s top cotton producer and second-largest exporter, Reuters said.

EC to investigate merger of Dow and DuPont

he European Commission (EC) announced on 11 August that it had opened an in-depth probe into the proposed US$130bn merger of US chemical giants Dow Chemical Co and DuPont Co to investigate whether the deal may reduce competition in crop protection, seeds and certain petrochemicals. “The livelihood of farmers depends on access to seeds and crop protection at competitive prices,” said Commissioner Margrethe Vestager, who is in charge of competition policy. “We need to make sure that the proposed merger does not lead to

higher prices or less innovation for these products.” The EC said that both Dow and DuPont had a strong portfolio of herbicides for a number of crops such as cereals, beets and oilseed rape, as well as of insecticides. “The Commission has preliminary concerns that the proposed merger could reduce competition in these markets and that the reduction in competition may have an impact on price, quality, choice and innovation.” The investigation would also look into Dow and DuPont’s activities in nematicides as well

as into the companies’ product pipelines in fungicides. In seeds, the EC said that both Dow and DuPont were developing “gene editing” technologies that could be used to accelerate the breeding of new seed varieties. The EC said it was concerned that Dow and DuPont may have fewer incentives to license these technologies to competitors or may make the development of competing technologies more difficult. The EC said it now had until 20 December to make a decision over its investigation.

8 OFI – SEPTEMBER/OCTOBER 2016 www.ofimagazine.com

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TRANSPORT & LOGISTICS NEWS

IN BRIEF CANADA: OmniTrax announced on 26 July that it would be closing the Port of Churchill – Canada’s only rail-accessible deep-sea Arctic port – and accompanying 1,300km Hudson Bay Railway. The port operates from late July to mid-November, shipping around 514,000 tonnes/year of grain and oilseeds. Denver-based OmniTrax bought the port and railway in 1997. According to Real Agriculture, challenges facing Churchill Port include a short ice-free season, a rail line built on permafrost and small volume capacity on the line and through the port. Real Agriculture said exports had dropped to just under 188,000 tonnes in 2015 and Canada’s largest agribusiness, Richardson International, did not have any grain booked for Churchill this year. BRAZIL: Soya shipments have risen by a third this year, says Progressive Farmer, jumping 36% in the first four months of the 2016-17 commercial year (February to May) to 30.4M tonnes, with the traditional southern ports of Santos and Paranaguá seeing shipments rise 68% to 10.8M tonnes and 38% to 5M tonnes respectively. The improved performance was due to increased efficiency, replacement of old equipment, unusually dry weather allowing vessels to load without interruptions and increased shipments from northern ports – which rose 35% to total 6.5M tonnes in February to May – easing pressure in the south. Export capacity from northern ports rose from 19M tonnes in 2015 to 26M tonnes in 2016.

Stolt-Nielsen to buy Jo Tankers S

tolt-Nielsen Limited announced on 18 July that it had agreed to acquire the chemical tanker operations of Jo Tankers, a leading provider of deep-sea transport for the chemicals and edible oils industry. The acquisition comprises 13 chemical tankers and a 50% share in a joint venture with eight chemical tanker newbuildings. The total purchase price is approximately US$575M, including the share of the newbuildings in the joint venture. The transaction is subject to competition authority approval, with a decision expected before the end of September 2016. “The transaction covers the tonnage replacement needs of our current chemical tanker fleet for the next several years,” said Niels G Stolt-Nielsen, CEO of Stolt-Nielsen. “While giving us some operational savings, it adds new trade routes to our service offering, expanding our presence on key tradelanes and enabling us to better serve the needs of our global customer base.”

The 13 chemical tankers consist of eight all stainless steel ships, ranging from 19,00038,000dwt, and five ships with a combination of stainless steel and coated tanks, all of approximately 37,000dwt. Six of the 13 ships have been on time charter to Stolt Tankers for the last five years. The newbuildings included in the transaction consist of eight all stainless steel eco-friendly ships of 33,000dwt on order from New Times Shipbuilding in China, the first of which was delivered in early July 2016. The seven remaining newbuildings are to be delivered in the second half of 2016 and in 2017. Stolt-Nielsen is a leading global provider of transport for bulk liquid chemicals, edible oils, acids and other specialty liquids through its three largest business divisions, Stolt Tankers, Stolthaven Terminals and Stolt Tank Containers. Jo Tankers operates the world’s third largest chemical tanker fleet, with around 40 parcel tankers ranging from 5,000-40,000dwt.

Amaggi group to buy 50% of Bunge port complex

razil’s Amaggi Group and agribusiness giant Bunge announced on 26 July that they are expanding their partnership to use the Tapajós-Amazon waterway, which began in 2014 when they formed the Unitapajós (Navigations United Tapajós) joint venture. Amaggi will buy 50% of Bunge’s Miritituba-Barcarena port complex, comprising a transshipment station in Miritituba and a port terminal in Barcarena, Pará state. Unitapajós operates a fleet of 90 barges and has a handling capacity of 3.5M tonnes/year of oilseeds and grains. “This new step strengthens our presence in the region and also contributes to the growth of a key logistics route,” said Amaggi CEO Waldemir Loto. The ‘Northern Corridor’ route

can ship soya from Mato Gross state via Miritituba along the Tapajós river, which is a major tributary of the Amazon river. The route carries soyabeans and corn to Barcarena port for export to Asia or Europe, offering an alternative to Brazil’s crowded southern ports. The deal is subject to approval by Brazil’s Administrative Council for Economic Defense.

“This operation is fully in line with Bunge’s strategy to optimise its assets and pursue strategic partnerships,” said Raul Padilla, Bunge Brazil president and CEO. The Amaggi group has operations in agricultural and soya seed production; soyabean, cotton and corn cultivation; soyabean processing; fertilisers; river transport and power generation. It has three soya crushing plants in: Cuiabá, Matto Gross state (1,600 tonnes/day capacity); Itacoatiara, Amazonas (2,000 tonnes/day capacity); and Lucas do Rio Verde, Matto Gross (3,000 tonnes/day capacity). It also manages the Porto Velho transhipment terminal in Rondônia, the Itacoatiara floating port in Amazonas and part of the Guarujá Bulk Terminal in the Port of Santos.

Comvex’s Constanta Port berth to handle grains and oilseeds

hareholders of Romanian port operator Comvex have agreed to invest €52M to convert berth 80 of Constanta Port into a grains terminal with a storage capacity of 200,000 tonnes. Comvex operates the largest bulk raw material handling terminal in the Black Sea area, covering 700,386m2 in Constanta Port. It specialises in handling, storing and transhipping dry bulk minerals such as iron ore, coal, coke and bauxite but has recently focused on grain as it faces weaker demand for handling minerals. Manager Viorel Panait said the new terminal

would not compete with existing grain terminals in Constanta Port but would target extra-large ships of 120,000-140,000dwt due to the 18.5m depth of the water, adding that the company’s terminals were linked to the Danube river, to the railway network and to the Constanta-Bucharest motorway. Constanta Port plays a key role in the export of grains and oilseeds from Romania, Bulgaria and the Black Sea region. Dutch agribusiness trader Nidera has been using Constanta to export grains and oilseeds for several years and in December 2014, fully acquired the USA/USC terminal at the

port, with a capacity of 250,000 tonnes. The Romanian subsidiary of agribusiness giant Cargill also completed a €15M investment with local logistics operator Transport Trade Services in 2014 to increase the capacity of its Canopus Star grain terminal at the port to 110,000 tonnes. The USDA Global Agricultural Information Network (GAIN) April 2016 report on Romania said that Romania’s oilseed production for 2016/17 is expected to exceed 3.5M tonnes, a 16% increase compared to the previous year, and oilseed exports were expected to climb 18%.

10 OFI – SEPTEMBER/OCTOBER 2016 www.ofimagazine.com

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

Evonik commercialises biosurfactants

erman specialities chemical company Evonik has commercialised a process to make a yeast-derived biosurfactant using biotechnology on an industrial scale. The company said in a press release on 21 June that it was primarily targeting its new biosurfactants for household and personal care products. “Increasing prosperity has meant access to modern cleaning and personal care products for more and more people throughout the world,” said Hans Henning Wenk, head of research for biobased materials within Evonik’s nutrition and care segment. “Biosurfactants promise significant growth and will complement our conventionally manufactured products.” Surfactants are a key component of modern shampoos, shower gels, and household cleansers and enable oil and water to mix,

IN BRIEF

kernel or coconut oils. “In nature, however, microorganisms such as yeasts and bacteria produce surfactants as well,” Evonik said. “There are bacteria that use these biosurfactants to gain access to oil as a food source. We can feed the microorganisms with just sugar and rapeseed oil. This significantly expands our raw material base.” Wenk said although a lot of natural organisms produced biosurfactants, they were not suitable for production on an industrial scale because they only produced small quantities of biosurfactants or the technology underlying the production process was extremely complex. Evonik had been able to produce its biosurfactant on an industrial scale following over five years of research and combining expertise in biotechnology, process engineering and interfacial chemistry.

Scientists utilise waste alperujo for surfactants

WORLD: Russian authorities are the latest to approve US cosmetics manufacturer Coty Inc’s acquisition of Procter & Gamble (P&G)’s perfume, hair care and make-up businesses for US$12.5bn, the biggest cosmetics merger in recent history. The green light was reported by Cosmetics designeurope.com on 5 August and follows previous approvals by the European Commission and other regulatory bodies around the world. P&G said the sale “represents a significant step forward to focus our portfolio on 10 categories and 65 brands”. USA: American Refining Group Inc (ARG) has taken a 33.3% share in Novvi LLC, a joint venture between renewable products company Amyris Inc and Brazilian fuel and food conglomerate Cosan SA, the firms announced on 19 July. Novvi produces hydrocarbon molecules from plant sugars for automotive, industrial, marine, and construction applications, particularly for the global lubricant market. ARG supplies waxes, lubricant base oils, gasoline and fuels including finished lubricant products. Amyris CEO said with ARG’s support, Novvi would be able to expand the availability of renewable products more quickly into the global markets for base oils and lubricants, expected to reach US$42bn and US$70bn in size, respectively, by 2020.

allowing effective cleaning. Evonik said the first household cleansers containing its biosurfactants were already available to consumers in supermarkets and contained sophorolipids, which were produced in nature by a yeast and could be found in honey produced by bumblebees, among other sources. These sophorolipids were produced at Evonik’s Slovenská L’upca production site in Slovakia. The company also planned to develop and market another class of biosurfactants known as rhamnolipids, which had excellent foamforming properties. It is building a pilot plant at Slovenská L’upca to produce rhamnolipids through fermentation using bacteria instead of yeasts. Evonik explained that conventional surfactants were produced using raw materials such as petroleum and the lauric oils – palm

cientists have found a way to turn the waste alperujo by-product from olive oil production into bio-surfactants and monoglycerides, the first time alperujo has been used to produce an eco-friendly surfactant, UPI reported on 15 July. Alperujo is the main waste by-product of the two-phase method of olive oil extraction, in which no water is added. It is a combination of liquid and solid waste with a thick sludge-like consistency that contains 80% of the olive fruit, including skin, seed, pulp and pieces of stones. In Spain, over 90% of olive oil mills operate with the twophase method, which means that annual production of this by-product is around 2.5M tonnes depending on the season (Aragon

PHOTO: ADOBE STOCK

et al, 2000), posing a serious pollution problem. The UPI report said that currently, most alperujo is used to make biofuels, but the process was not that efficient or lucrative. However, scientists at Spain’s University of Granada and Ireland’s University of Ulster found that alperujo successfully fuelled the synthesis of valuable

surfactants when fermented along with biosurfactantproducing microorganisms such as Bacillus subtilis and Pseudomonas aeruginosa. “Researchers believe the new process can produce biosurfactants more cheaply than current production methods,” the UPI report said. Surfactants are active surface agents which are used to lower the surface and interfacial tension between two liquids or between a liquid and a solid. They can be used as detergents, wetting agents, emulsifiers, foaming agents and dispersants. The research, ‘Hydrolysis of olive mill waste to enhance rhamnolipids and surfactant production’, was published in the April 2016 edition of Bioresource Technology.

Godrej manufactures soap overseas Huntsman sale

ndian consumer goods company Godrej Consumer Products Ltd (GCPL) announced on 13 July that it has started manufacturing its Cinthol and Fairglow soap brands in Sri Lanka and Bangladesh respectively. “Envisaging the demand for consumer products in SAARC (South Asian Association for Regional Cooperation) countries and the logistics costs of exporting, we have initiated local manufacturing of soaps in foreign markets for the first time,” the company said. GCPL was also investing 100 crore rupees (US$14M) to build a manufacturing facility in Jammu, India which would be operational by March next year. Sunil Kataria, GCPL’s business head for India and SAARC, said the new facility would help ramp up its presence in the rural market, which was a growth driver. GCPL’s products include soap, hair colourants, toiletries and liquid detergents. It is a division of Godrej Industries, an Indian manufacturer of oleochemicals, edible oils, vanaspati and bakery fats.

lobal speciality chemicals company Innospec announced on 3 August that is buying Huntsman Corp’s European personal and home care business for US$225M and plans to significantly expand its product range in these sectors. The business has plants in France, Italy and Spain with sales revenues of some US$230M/year. Huntsman said it remained committed to its surfactants business worldwide, with the sale representing another step in the transformation of its performance products business.

12 OFI – SEPTEMBER/OCTOBER 2016 www.ofimagazine.com

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13 OFI – SEPTEMBER/OCTOBER 2016 www.ofimagazine.com

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D IARY OF EVEN TS

21-23 SEPTEMBER 2016 Globoil 2016 VENUE: Grand Hyatt, Goa, India CONTACT: Tefla’s, India Tel: +91 22 26304816/17 E-mail: events@teflas.com/teflas@gmail.com Website: www.globoilindia.com

21-23 SEPTEMBER 2016 Fat and Oil Industry VENUE: Kyiv Expo Plaza Exhibition Centre, Kiev Ukraine CONTACT: J.V. Agroinkom, Ukraine Tel/Fax: +38 044 593 1901 E-mail: info@agroinkom.com.ua Website: www.agroinkom.com.ua/ru/ maslo-zhirovaya

28-29 SEPTEMBER 2016 7th International Oilseeds & Oils 2016 VENUE: Barcelona, Spain CONTACT: APK-Inform, Ukraine Tel: +380 562 320 795, +380 562 321 595 E-mail: globoil@apk-inform.com Website: www.apk-inform.com/en/ conferences/oo2016/about

4-7 OCTOBER 2016 World Conference on Fabric and Home Care VENUE: Shangri-La Hotel, Singapore CONTACT: AOCS Meetings Department, USA Tel: +1 217 3592344 E-mail: meetings@aocs.org Website: http://singapore.aocs.org

12-13 OCTOBER 2016 Malaysian Palm Oil Trade Fair & Seminar VENUE: Kuala Lumpur, Malaysia CONTACT: Mohd Izham Hassan, Malaysia Palm Oil Council. E-mail: izham@mpoc.org.my or kharibi@mpoc.org.my Website: www.mpoc.org.my/Palm_Oil_ Trade_Fair_and_Seminar_(POTS)_2016_ Announcement.aspx

17-18 OCTOBER 2016 Biofuels Financial Conference VENUE: Hyatt Regency Hotel, Minneapolis, USA CONTACT: BBI International, USA Tel: +1 866 7468385 E-mail: service@bbiinternational.com Website: www.biofuelsfinancialconference.com

17-21 OCTOBER 2016 National Renderers Association (NRA) 83rd Annual Convention VENUE: The Ritz-Carlton Amelia Island, Florida USA CONTACT: NRA, USA. Tel: +1 703 6830 155 E-mail: co@martycovert.com Website: www.nationalrenderers.org

19-21 OCTOBER 2016 OFIC 2016 VENUE: Hotel Istana, Kuala Lumpur, Malaysia CONTACT: OFIC 2016 Secretariat, c/o MOSTA Malaysia. Tel: +603 7118 2062/2064 E-mail: mosta.secretariat@gmail.com Website: www.mosta.org.my

21-22 OCTOBER 2016 PORAM Annual Forum, Dinner, Golf Challenge LOCATION: One World Hotel, Bandar Utama Selangor Darul Ehsan, Malaysia CONTACT: PORAM, Malaysia Tel: +603 7492 0006 E-mail: poram@poram.org.my Website: www.poram.org.my/p/ wp-content/uploads/2014/01/PORAM-annualevent-A4-2016.pdf

24-25 OCTOBER 2016 3rd International Conference on Rice Bran Oil VENUE: ITO International Research Centre University of Tokyo, Japan CONTACT: Secretarial of ICRBO2016 Tel: +81 3 5657 0777 E-mail: icrbo2016@jtbcom.co.jp Website: www.icrbo2016.org

26-27 OCTOBER 2016 Fat and Oil Industry 2016 VENUE: Bristol Hotel, Odessa, Ukraine CONTACT: APK-Inform, Ukraine Tel: +380 562 320795 E-mail: market@apk-inform.com Website: www.apk-inform.com/en/ conferences/fat-and-oil-2016/about

27-28 OCTOBER 2016 Palm Oil Latin America, 16th Practical Short Course: Advanced Oil Processing – Palm, Palm Kernel and Coconut Oil Processing and Food Applications VENUE: Hotel Estelar La Fontana, Bogotá, Colombia CONTACT: Smart Short Courses Tel: +32 51 311 274 or +1 979 216 1210 E-mail: info@smartshortcourses.com Website: www.smartshortcourses.com/ oilprocess16/index.html

7-10 NOVEMBER 2016 19th Annual FO Lichts World Ethanol & Biofuel VENUE: Steigenberger Wiltcher’s Hotel Brussels, Belgium CONTACT: Informa Agra Customer Services, UK Tel: +44 20 3377 3658 Fax: +44 020 3377 3659 E-mail: registrations@agra-net.com Website: www.worldethanolandbiofuel.com

7-10 NOVEMBER 2016 14th Annual Roundtable Conference on Sustainable Palm Oil (RT14 2016) VENUE: Shangri-La Hotel, Bangkok, Thailand CONTACT: RSPO, Malaysia Tel: +603 2302 1500 E-mail: rt@rspo.org Website: www.rt14.rspo.org

10 NOVEMBER 2016 FOSFA Annual Dinner VENUE: Battersea Evolution, London, UK CONTACT: Gemma Hale, FOSFA, UK Tel: +44 20 7283 5511 E-mail: contact@fosfa.org Website: www.fosfa.org

14-16 NOVEMBER 2016 Oilseed and Grain Trade Summit/Organic & Non-GMO Forum VENUE: Hyatt Regency Hotel, Minneapolis, USA CONTACT: Sule Basa HighQuest Partners, USA E-mail: sule.basa@gmail.com Website: www.oilseedandgraintrade.com or www.ongforum.org

23-25 NOVEMBER 2016 12th Indonesian Palm Oil Conference (IPOC) and 2017 Price Outlook VENUE: BICC, The Westin Resort Nusa Dua, Bali, Indonesia CONTACT: IPOC Secretariat, GAPKI, Indonesia Tel: +62 21 57943852 E-mail: info@gapkiconference.org Website: www.gapkiconference.org

1-3 DECEMBER 2016 7th FOI 2016, Fats & Oils Istanbul/FGI 2016, Feeds & Grains Istanbul VENUE: Ceylan InterContinental, Istanbul, Turkey CONTACT: Agripro, Turkey. Tel: +90 212 236 0345 E-mail: info@fatsandoilsistanbul.com.tr info@agripro.com.tr Website: www.fatsandoilsistanbul.com.tr

29-30 DECEMBER 2016 ICBB 2016: 18th International Conference on Biofuels and Bioenergy VENUE: Paris, France CONTACT: World Academy of Science, Engineering and Technology (WASET) Website: www.waset.org/ conference/2016/12/paris/ICBB

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

14 OFI – SEPTEMBER/OCTOBER 2016 www.ofimagazine.com

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DI ARY O F E V E NT S

OFI India 2017 – new dates and venue announced 7-8 April 2017, BCEC, Mumbai Sales & Sponsorship

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www.ofievents.com/india 23-24 JANUARY 2017 Fuels of the Future 2017 VENUE: CityCube, Berlin, Germany CONTACT: Markus Hartmann, German Bioenergy Association (BBE) Tel: +49 228/81002-22; E-mail: info@bioenergie.de Website: www.fuels-of-the-future.com

1-2 FEBURARY 2017 Lignofuels 2017 VENUE: Helsinki, Finland CONTACT: Dimitri Pavlyk, ACI (Europe), UK. Tel: + 44 20 7981 2503 E-mail: dpavlyk@acieu.net; Website: www.wplgroup.com/aci/event/ lignocellulosic-fuel-conference-europe

6-8 MARCH 2017 28th Annual Palm and Laurice 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 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

7-8 APRIL 2017 OFI India 2017 VENUE: Bombay Convention and Exhibition Centre (BCEC), Mumbai, India. CONTACT: Mark Winthrop-Wallace, Sales Manager, OFI, UK Tel: +44 (0) 1737 855 114; E-mail: markww@quartzltd.com Website: www.ofievents.com/india

27-28 APRIL 2017 3rd Annual Congress on Biofuels and Bioenergy VENUE: Dubai International Convention and Exhibition Centre, Dubai, UAE CONTACT: ConferenceSeries LLC E-mail: biofuelsconference@insightconferences.com Website: www.biofuels-bioenergy.conferenceseries.com/middleeast

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15 OFI – www.ofimagazine.com

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I NTE RN ATION AL M ARKET REVIEW

CHARTS: JOHN BUCKLEY

Mixed portents for a new season FIGURE 1: CBOT SOYABEAN FUTURES (US CENTS/LB)

The oilseed and oil industry is seeing mixed fortunes. Soya supplies are turning out better than expected but palm oil production is still suffering the repercussions of El Niño, and a decline in rapeseed output should be outweighed by a record ‘oil-rich’ sunflower crop. John Buckley writes

he main components of the oilseed complex are seeing mixed fortunes into the start of the new 2016/17 season in September. Soya supplies are turning out larger than expected as ideal weather bumps up US yields to record high levels – more than offsetting the earlier loss of South American supplies to floods and droughts. Palm oil production continues to run well under par as last year’s El Niño drought effect works through. Yet weaker than expected foreign demand may stop origin palm stocks declining to ‘flashpoint’ levels – and the medium/longer term outlook points to more normal supply growth. This year’s European and CIS rapeseed crops have disappointed but the Canadian canola harvest is seen similar to last year’s – which has just been revised up sharply, along with carry-in stocks. The decline in world total rapeseed output is easily outweighed by a record large ‘oil-rich’ sunflower crop, thanks to hikes in production in the CIS countries, Europe, and even the former big exporter, Argentina.

Soya abundance Market leaders, soya and palm oil, continue to highlight these crosswinds buffeting prices both ways in the edible oil sector. Over the past few weeks, we have seen the bellwether CBOT soya

futures price from its mid-year peaks in excess of US$12/bushel (about US$440/tonne) to as little as US$9.65/bushel (US$355/tonne) before recovering to around US$10/bushel (US$367/tonne) recently (see Figure 1 above). The main supply-side factor here has been the USDA’s decision to raise its US yield forecast from 48.9 bushels/acre to a record 50.6 bushels/acre (+5.4% on the year), which projects a crop of 114.3M tonnes. This has gone up sharply by nearly 11M tonnes since mid-year, easily accommodating the earlier loss of about 3.5M tonnes of Brazilian output and 2.5M tonnes of Argentine output due to bad weather. Strong US export trade resulting from the Latin American supply shortfalls has allowed the CBOT market to play down the implied rise in US stocks, now seen accumulating to almost 10M tonnes/year, compared with a starting level of 5.3M tonnes (and as little as 2.5M tonnes just two years earlier). US crush has also been supportive, edging up to record levels in an effort to export meal into the gaps opened by the disappointing and later-than-usual Latin American harvests. The soya abundance is expected to continue into 2016/17 as Brazil hopes for more normal weather to deliver its first 100M tonne-plus crop. (This was on the cards last autumn but turned out at 96.5M tonnes at the last USDA count). Some analysts think the soya expansion in the south may be slowing as Brazil tries to recover maize production that fell far more dismally than soya during last year’s droughts and, in unusually tight supply, is reportedly offering much better returns now than oilseeds. Argentina may also check its soya production in response to the government’s decision to end grain export subsidies and quotas while still taxing soya exports up to 30%. But against that, US analysts suggest soya planted area there will jump by at least another 1M acres next year as farmers turn away from maize. Global soya production would have been up even more sharply for 2016/17 (it is currently at +17.4M tonnes or up nearly 5.6%) if not for India’s faltering monsoon curbing output there by 1.7M tonnes. However, at some 330M tonnes, the global crop will be large enough to keep ending stocks at a relatively

high level of 72M tonnes – below 2015/16’s starting level of 78.5M tonnes – but far over the 55/60M tonnes range of recent years. On the demand side of the soya ledger, main crush growth is, as usual, seen in China (+5.2M tonnes), requiring imports of 85/86M tonnes (82.5M tonnes last season). China is trying at long last to boost its own soya crop from the currently projected 12.5M tonnes to around 19M tonnes by 2020. This is unlikely to dent its vast import trade much, given that consumption there has been growing at an annual average of 11.3% in recent seasons, a pace that, if extended, would need an extra 27M tonnes of imports or domestic crop by the target date. China is the main factor in soyabean import growth in the season ahead, when the US hopes to expand its global export market share from a (recently-uprated) 52.8M tonnes to 54M tonnes. If Brazil makes a crop comeback, it should expand its own exports to keep it in the lead at some 58.4M tonnes while Argentina remains around the 10.5M tonnes mark. Overall, there is little here to fire up the soya market in Chicago where, not surprisingly, forward futures are quoted more or less the same as current positions. China is also leading world consumption growth of soya oil, a factor that has diminished its appetite for palm oil during the past year of relatively firmer palm prices. Unusually small soya price premiums have also seen India take more soya and less palm than expected. Demand for soya oil has been helped by the fact that, overall, in dollar terms, it has been among the least volatile of the vegetable oil markets in the past year or so. Along with a similar trend in sunflower oil, this has contributed to an overall stability within the complex.

Palm leans both ways Less stable has been top-traded oil palm which, after trading into the US$700s/tonne last spring, has recently been in the mid-US$500s/tonne before rallying back toward the US$650/tonne level (based Kuala Lumpur futures). As mentioned, the El Niño factor has been curbing production in both Malaysia and Indonesia during the year to date. In May, Malaysian output was down by almost a quarter on the year and, even after moving up seasonally in August, it was still running well under 2015 levels, leaving it almost 16% down for the year to date. The USDA calculates that world palm oil output dropped 2.2M tonnes or 3.6% in the past season at 59.5M tonnes (Indonesia minus 1M tonnes and Malaysia 1.6M tonnes). In the year ahead, it sees Indonesian output rebounding by 3M tonnes and Malaysia by 1.75M tonnes for a world total of 65.5M tonnes. At this stage, that looks a bit optimistic but not out of the question if plantations can recover quickly enough from the lagged impact of El Niño. USDA’s palm consumption forecast (global growth of 3M tonnes) is led by India (+850,000 tonnes) and Indonesia (+730,000 tonnes) plus gains in many of the stalwart, moderate and smaller areas of past growth, like Bangladesh, Pakistan and

16 OFI – SEPTEMBER/OCTOBER 2016 www.ofimagazine.com

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17 OFI â&#x20AC;&#x201C; SEPTEMBER/OCTOBER 2016 www.ofimagazine.com

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CHARTS: JOHN BUCKLEY

I NT E RN ATION AL M ARKET REVIEW

FIGURE 2: MALAYSIAN PALM OIL OUTPUT STILL LAGS 2015 (MILLION TONNES)

FIGURE 3: VEGETABLE OIL PRICES* (MONTHLY AVERAGES, US$/TONNE)

Malaysia itself. Some analysts contest the India figures though. They are expecting palm’s share of this to plunge to a record low amid the poor palm discount. Indian industry sources point out that since palm oil prices surged, the gap versus soya oil has dropped from US$170/tonne this time last year to as little as US$70/tonne for an oil seen to need a price incentive to counter the perception in some quarters that it is lower quality. Palm’s share of the Indian oil market has already dropped in the past year to 66% compared with as much as 86% in 2007/08. China’s demand for palm oil has meanwhile been curbed not only by the growth in soya oil supplies from its rapidly-rising, meal-driven, soyabean crush, but by a programme of sales from its overburdened rapeseed oil reserves (these were estimated to have peaked over 4M tonnes for the past two seasons, about three-quarters of the total world stocks of the oil). The rationale is that, as this programme winds down, China may turn back to palm – if the price is right. Recent export trade has offered a mixed picture. The official Malaysian Palm Oil Board data for August showed shipments rose by a stellar 31% on the back of better demand from the top buyers China (+42%), India (+126%) and the EU (+24%). More palm was also shipped to several smaller/ moderate-sized customers although accumulated year-to-date exports were still running about 5%

down. Malaysian production also rose in August but only by 7% – an unusually low gain for this usually peak time of the season. That allowed Malaysian stocks to fall under 1.5M tonnes – near six-year lows and less than the markets expected. However, these could recover in the months ahead as output improves further in September and October, and exports are already showing signs of weakening again (the September to date shipments were recently running 16% down). Top supplier Indonesia, which has also seen its stocks run down, should get better production numbers in this peak autumn fruiting period as well, increasing the need to keep its exports up. Overall, palm oil seems likely to remain one of the more volatile components of the vegetable oil complex as the markets wait to see how supply/ demand pan out in the season ahead. Clearly while soya oil remains abundant and relatively cheap, there are limits on how far palm can test the loyalty of its customers, especially with so many of them in the more cash-strapped developing world.

Rapeseed less tight A surprise upward revision of Canada’s 2015 canola crop by nearly 1.2M tonnes has loosened the perceived squeeze on supplies that has characterised most of the past season. Now seen at 18.4M tonnes, the new crop number followed the discovery of far

larger than expected July inventory by the Canadian government body AAFC. It means that Canada went into the new season with double the stocks thought earlier (about 2M tonnes). On current demand pointers, these should stay at similar levels at the end of 2016/17 and may even be bigger if the current crop estimate of 18M tonnes also turns out to be too low. Along with weakness in the US soya market and the implied competition for ‘oil-rich’ rapeseed from record sunflower oil and recovering palm supplies, this development has recently pushed the Winnipeg canola futures down to six-month lows. Prices might have moved lower still if not for recent news that China, Canada’s top rapeseed export customer, has delayed introduction of planned stricter rules on ‘dockage’ or foreign matter in incoming cargoes. Canadian officials had worried these would be tough, if not impossible to meet, curbing trade to this key 4M tonne market. Canada’s own crush has meanwhile performed well in the past season, preliminary data showing a 12% increase. The 2016/17 marketing year has also got off to a reasonable start with a further 5% gain over this time last year. A tighter market continues to face European rapeseed users as their domestic crop estimates continue to sink after a summer of troublesome weather, especially in the biggest producing countries. A few months back, the crop still seemed to have potential for 21M tonnes but the latest USDA figure is down to just 20M tonnes with other analysts now not far above that. It faces the EU with a hefty stock drawdown, even if it cuts rapeseed oil usage sharply for a second year running. Other sources have meanwhile been trimming their forecasts for production in Ukraine and Australia – key suppliers to Europe. Oil World’s recent take on the global rapeseed crop expected an eight-year low producing a third year of deficit (even including the larger Canadian crop estimate that came out after Oil World’s numbers, that still looks likely). Rainy weather and lack of sunshine up to and during French and German harvests (possibly CIS harvests too) also implies probable lower oil content in the seed. Parts of Western Canada have had similar problems with wet harvest delays. There has also been much discussion recently about European farmers getting disillusioned with rapeseed crops in the wake of the past season’s difficult weather and the EU’s neonicotinoid pesticide ban, maybe pointing to lower acreage and an even smaller EU crop next year. All this seems likely to maintain rapeseed’s position as one of the firmer oils, price-wise. In contrast, a 10% increase (4.3M tonnes) in global sunflowerseed production promises a healthy contribution to world edible oil supplies in the coming season. Among the key players, production is up by almost 20% in Ukraine, 9% in both Europe and Russia and a hefty 22% in the one-time main exporter Argentina. The big crop is expected to give a 1.5M tonne boost to world sunflower oil supplies, most of that taking place within the main user countries, including the EU, where it will help make up for rapeseed oil shortfalls. The improving supply outlook is helping to keep sunflower oil prices fairly stable, which should reinforce prospects for greater consumption in other key user areas. John Buckley is OFI’s market corrrespondent

18 OFI – SEPTEMBER/OCTOBER 2016 www.ofimagazine.com

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PROC ES S I N G

3-MCPD and GE: a new challenge Certain processing techniques are now known to cause the occurrence of 3-MCPD, 2-MCPD and GE in edible oils and various strategies are being adopted to minimise their formation within the bleaching and deodorising process. Dr Marc Kellens and Dr Wim De Greyt write

he growing attention on the nutritional quality of food oils is one of the main drivers for new developments in the edible oil refining industry. Over the years, the refining process has continuously been improved to assure the production of high quality food oils with no or very low levels of contaminants (pesticides, polycyclic aromatic hydrocarbons, dioxins and PCB, for example) and minimum amounts of trans fatty acids (TFA). The production of low trans food fats was a big challenge for the oil processing industry as it required both a change of technology (from partial hydrogenation to interesterification and dry fractionation) and feedstock (from soft oils to palm oil fractions). The occurrence of esters of 3-monochloropropane diol (3-MCPD) and 2-monochloropropane diol (2MCPD) and glycidyl esters (GE) in food oils was first reported in the mid-2000s. Soon after, in 2007, the German Federal Institute for Risk Assessment (BfR) concluded that the oil processing industry had to search for alternative process techniques to reduce formation of these harmful process contaminants during oil refining. This call was taken seriously and initiated a lot of research projects in the academic world and the oils and fats industry. As a result, the mechanism of formation and toxicity for humans of 3-MCPD and GE is now better understood and critical refining stages are known. Validated analytical methods are also available and widely used for process control. In May 2016, the European Food Safety Authority (EFSA) published its long expected scientific opinion on the risks for human health related to the presence of 3-MCPD/2-MCPD esters and GE in food. The report concludes that 3-MCPD esters and GE have the same toxicological profile as free 3-MCPD and glycidol and are therefore a potential health concern. GE are considered more harmful since some in vivo studies indicate that glycidol is a genotoxic compound. Not enough toxicological data is available to conclude about the toxicity of 2-MCPD. Based on the available toxicological data, EFSA derived a tolerable daily intake (TDI) for 3-MCPD of 0.8 µg/kg body weight. This value is

considerably lower than the earlier set TDI of 2.0 µg/kg body weight. The lower TDI value comes from a more conservative interpretation of the available toxicological data (lower uncertainty factor) and ensures a higher level of protection for consumers. No TDI is set for GE. Due to its genotoxic carcinogenic nature, its concentration in foods has to be minimised to the lowest achievable level. Dietary surveys of different EU countries show that the mean exposure to 3-MCPD and GE is highest for younger groups of the population (infants, toddlers and young children). Health risk is highest for infants that only consume industrial infant formula, as their daily intake of 3-MCPD may be three times higher than the TDI. EFSA therefore highly recommends a significant reduction of 3-MCPD/GE in food products for infants. Evaluation of the analytical data on the occurrence of 3-MCPD/GE in foods collected between 2009 and 2015 in 23 EU countries showed that food oils contributed most to the daily intake of these harmful contaminants. Mean 3-MCPD and GE values are highest in refined palm oil (fractions) and are five to 10 times higher than the mean values found in most other refined food oils (see Table 1, below). The data clearly shows that 3-MCPD/GE are mainly a challenge for palm oil processors and much less for refiners of other vegetable oils, who in their turn have to deal with TFA.

Formation of 3-MCPD and GE In the past, edible oil processors have already implemented effective mitigation technologies. This has resulted in a substantial reduction of 3-MCPD and GE in refined food oils. From 2010 to 2015, levels of 3-MCPD and GE in refined palm oil decreased by 30% and 50% respectively. However, this reduction is still not enough. Members of FEDIOL, the federation representing the European vegetable oil industry, committed to reduce GE content to a maximum of 1ppm in all refined oil by September 2017. This is an ambitious goal, especially for palm oil, knowing that the average GE content in refined palm oil in 2015 was still around 4ppm. FEDIOL members also committed

to continue reducing levels of 3-MCPD esters, but a concrete target value has not been set yet. In anticipation of eventual formal regulatory limits, producers of infant formula will impose very low levels of 3-MCPD (<1ppm) and GE (<0.5ppm) in food oils from 2018 onwards.

Mitigation strategies 3-MCPD esters and GE have different chemical and physical characteristics and do not have the same mechanism of formation. Hence, different mitigation strategies are required to achieve required low levels in refined food oils (see Table 2, right). GE are mainly formed from diglycerides at high temperature (>230°C). This explains the high GE content in standard refined palm oil, as this oil typically has a high diacylglycerol (DAG) content (6-8%) and is deodorised at high temperature (260°C) for a longer time (approximately one hour). The same is true for TFA. Formation of GE can be minimised by reducing the heat load during deodorisation. In practice, deodorisation is best done at temperatures <240°C. A higher temperature (e.g. 250°C) for desired heat bleaching and more efficient FFA stripping is acceptable provided that the residence time is kept short. Dual temperature deodorisation (with a short residence time at a higher temperature followed by a longer residence time at a lower temperature) is industrially proven and implemented as mitigation technology to achieve a minimum amount of GE in the refined oil. GE can also be removed from (refined) food oils. They have a similar volatility as monoglycerides (MAG) and can thus be stripped from the oil, but only at high temperature and deep vacuum (260°C and 1mbar). At a lower temperature and/or less deep vacuum, there will be more formation than stripping resulting in a net increase of the GE content in the refined oil. Hence, GE stripping requires quite extreme deodorising conditions, which will also result in the stripping of other volatile components such as MAG, tocopherols/ tocotrienols and phytosterols. This will not only give higher oil losses but may also have a negative effect on the oxidative stability of the refined oil. Another possibility to minimise GE formation is to reduce the DAG levels in palm oil. One interesting route to achieve this goal (2-3% DAG) is by enzymatic esterification of the FFA on the DAG TABLE 1: MEAN CONCENTRATION OF 2-MCPD, 3-MCPD AND GLYCIDYL ESTERS IN REFINED FOOD OILS Mean concentration (ppm) Oil type

3-MCPD

2-MCPD

Soyabean Rapeseed Sunflower Palm

0.4 0.2 0.5 3

0.2 0.1 0.25 1.5

0.2 0.2 0.25 4

Objective 20171 20182

1 <0.5

set by FEDIOL; 2 set by producers of infant foods

Source: EFSA report, May 2016

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PROC ESSIN G

in crude or bleached palm oil. This will not only give lower GE levels but will also increase the overall yield during refining. GE can also be degraded to MAG during postbleaching with (non-HCl) activated bleaching earth. This gives very low GE levels (<0.5ppm) provided that post-deodorisation is done at a low temperature (maximum 230°C), (see Figure 1, right). Oil processors generally do not like such double refining, but so far it is the only industrial proven refining process for the production of palm oil fractions with <0.5ppm GE. 3-MCPD esters can be formed by reaction of triglycerides (TAG) with chlorine (precursors at temperatures >140°C. Hence, removing the chlorine precursors and/or avoiding acidic conditions during the refining process are the most effective mitigation strategies. This is, however, easier said than done. First of all, it is very complex to determine the amount and nature of chlorine precursors in crude palm oil (CPO) and in practice the ‘potential’ of a CPO for 3-MCPD ester formation is not known. Applying the same refining process on different CPO (from various plantations) can give significantly different 3-MCPD levels which is quite frustrating for both the technology provider and the oil refiner (see Table 3, above). Thoroughly washing the fresh palm fruit bunches (FFB) before CPO production, as well as washing the CPO before storage and refining, seems to be the most efficient processes for the removal of chlorine precursors (see Figure 2, right). As 3-MCPD esters are already formed at quite low temperatures (140°C), it is not possible to control or minimise their formation during deodorisation. Bleaching is therefore the most critical refining stage for the mitigation of 3-MCPD esters. Selecting the proper grade of bleaching earth (natural or nonHCl activated) is very important. Physical refining of freshly washed CPO with use of natural bleaching earth can give 3-MCPD ester levels between 1-2ppm depending on the CPO quality and the efficiency of the washing process. Chemical refining has shown to be a good process for low 3-MCPD esters but good CPO quality is still required to get <1ppm 3-MCPD. Although there’s a growing demand for chemical refining lines for CPO, oil processors are still very reluctant to adopt chemical neutralisation on (high FFA) CPO as it gives high oil losses and a difficult to treat soapstock as a side stream. Current research focuses on the development of sustainable and economical mitigation technologies that consistently give RBD PO with 3-MCPD esters <1ppm. Chemical interesterification (CIE) is currently the only process that can remove/degrade 3-MCPD esters. CIE followed by post-bleaching with non-HCl activated bleaching earth (to degrade GE formed during CIE) and deodorisation at mild temperature (<220°C) is today the only industrial process that can give refined food oils with very low GE and 3-MCPD from standard quality (commodity) CPO.

Conclusion The recent EFSA report has put 3-MCPD/ GE on the agenda and brought an important new challenge to oil refiners. They will have to accelerate implementation of additional mitigation technologies to reduce 3-MCPD/GE levels further; especially in refined palm oil. With the active

TABLE 2: 3-MCPD ESTERS VS GLYCIDYL ESTER (GE) 3-MCPD ≠ Glycidyl Esters (GE) 3-MCPD

Glycidyl Esters (GE)

Toxicity

Carcinogenic (Non-genotoxic)

Carcinogenic (Genotoxic)

Precursors

Triglycerides, chlorine Acidic conditions

Diglycerides (DAG) Heat

Critical refining stage (for minimal formation)

Degumming, bleaching (starting at 140°C)

FFA stripping Deodorisation

Stability

Can only be degraded with strong Conversion to MAG with strong alkaline acid (ABE) Not volatile Volatile

Different mitigation strategies for 3-MCPD esters and Glycidyl Esters (GE) TABLE 3: CPO QUALITY AND ORIGIN HAS IMPACT ON 3-MCPD ESTER FORMATION CPO origin DOBI* FFA DAG Activated BE (HCl) Natural bleaching earth (%) (%) 3-MCPD (ppm) 3-MCPD (ppm) Central America

1.6

3.0

5.2

2.3

1.1

South America

2.3

4.6

7.2

7.5

1.6

South East Asia- 1

2.7

4.2

6.1

8.1

1.7

South East Asia- 2

3.1

3.8

5.2

9.7

2.1

South East Asia- 3

1.6

5.1

6.2

9.6

2.7

* deterioration of bleachability index

FIGURE 1: EFFECT OF RE-REFINING ON GE FORMATION 5 4.5

Glycidyl Esters (ppm)

RBD PO

4.6

0.5% SS,3 mbar,60 min.

3.5

Redeodorized 2.8 at 260 °C

3 2.5 2 1.5 1

0.5% ABE,110°C,30 min.

0.5 0

Post-bleached 1

0.1 2

Redeodorized at 230 °C 0.3 3

Sample number FIGURE 2: WASHING OF CPO – EFFECT ON ELEMENT CONTENT AND COLOUR Parameter CPO Washed CPO FFA (C16:0) %

3.67

3.53

P (ppm)

22.3

8.0

Fe (ppm)

20.3

2.68

Ca (ppm)

20.1

8.7

Mg (ppm)

12.3

1.7

K (ppm)

21.6

0.7

Na (ppm)

1.4

1.2

support of technology providers, it should be possible to properly address this issue and improve further the nutritional quality of food oils. It is difficult to predict how far the consequences of the EFSA’s recommendation to reduce 3-MCPD/ GE in food oils will reach out to the global food oil

LEFT TO RIGHT: CPO, WASHED CPO, WASH WATER

processing industry, but as with trans fat issues in the past, when it smoulders in Europe, it may start a fire in the rest of the world. Dr. ir. Marc Kellens is Global Technical Director and Dr. ir Wim De Greyt is R&D Manager at Desmet Ballestra

20 OFI – SEPTEMBER/OCTOBER 2016 www.ofimagazine.com

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Healthy Fat for the Future Our Oils & Fats technologies and R&D are at the service of industry to address the issues of 3-MCPD & GE.

Science behind Technology

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9/23/16 8:15 AM

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OFI September-October p22-23_imerys (dps).indd 22

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CELITE® CYNERSORB IN USE

Celite® Cynersorb

Working with a global producer of “speciality” oils and hydrogenated fats, Celite® Cynersorb was able to replace the existing silica gel adsorbent (but at a lower dosing rate) and at the same time reduce their usage of filter aid by 50% immediately post-interesterfication (Fig 1) and still achieve zero soap specification. W H AT I S W RO N G W I T H B L E AC H I N G E A R T H S ?

Fig 1: Adsorbent/Filter Aid Addition: Plant trials post inter-esterification

Bleaching Earths, like silica gels, are also excellent impurity adsorbents. However, unlike silica gels, they are also used for the removal of colour pigments – “bleaching”. As they typically have a low surface area, large quantities have to be added to remove both impurities and colour pigment. Like silica gels, they have very poor filtration characteristics.

3.00 2.50

Initially working with partners in the olive oil refining industry, IMERYS has shown that Celite® Cynersorb can have a “synergistic” effect on the colour pigment removal function of bleaching earths, allowing for significant reduction in bleaching earth dosing rates. In our study a typical 2% addition rate of bleaching earth could be replaced by a combination of 0.2% Celite® Cynersorb and 0.2% bleaching earth – a reduction in powder dosing of 80%.

Kg/MT

2.00

2.45 kg/MT

1.50

1.54 kg/MT

1.00 0.50 0.00

HOW DOES CELITE® CYNERSORB WORK? Unlike bleaching earths, Celite® Cynersorb has more specific adsorption characteristics, removing trace metals and polar contaminants like soaps and phospholipids. It has no affinity for chlorophyll or other colour pigments. Selectively removing these metals and polar contaminants means that the adsorption “sites” on the bleaching earth are reserved for removal of colour pigments, making the bleaching earth more effective at bleaching. Hence dosing rates can be significantly reduced.

Silica Gel 1.67

0.83

Silica Gel or Cynersorb

0.78

0.71

Moderate Adsorption

High Adsorption

(Feedstock with low soaps & metals)

(Feedstock with high soaps & metals)

Low Permeability

CynerSorb 200

CynerSorb 200C

High Permeability

CynerSorb 1000HS

CynerSorb 1000HC

Application

M U LT I P L E G R A D E S O F C E L I T E® C Y N E R S O R B TO ENSURE OPTIMAL INDIVIDUAL PERFORMANCE As IMERYS is acutely aware, when it comes to optimal filtration and performance functionality, a “one-size fits all” approach does not work. No two refineries are the same, having different hardware, different quality of feedstocks, different processes and different final customer requirements. Hence, Celite® Cynersorb is available in 4 different “versions” to allow a trained IMERYS technician to offer the most suitable grade for each individual production process.

Cynersorb

Filter Aid

T he dif ference is t: +44 (0)1726 818000

f: +44 (0)1726 811200

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SPEC IALITY FATS

A fall in the production of cocoa beans and a steady rise in the demand for chocolate, particularly in developing countries, has created a need for cocoa butter equivalents (CBEs) that are not only cheaper than cocoa, but also improve taste and texture especially in tropical climates. Speciality fats, used as replacement fats, include a group called exotic fats. Exotic fats make ideal CBEs and have great potential in the confectionery industry. Rose Hales writes

peciality fats are a unique group of vegetable fats that act as substitutes for other types of fats in a wide variety of products including chocolate, confectionery, compound coatings, fillings and spreads, ice cream, dairy products and infant formula. Although the market was pioneered in the early 1950s, since 2000 the conditions have been more favourable, causing a rise in smaller companies producing speciality fats. Top producers of speciality fats include Wilmar International, AAK, Cargill, 3F Industries, ISF, IOI Loders Croklaan and Nisshin OilliO. Companies such as IOI Loders Croklaan offer a complete range of fat alternatives, which are divided into suggested applications as well as brief descriptions of each product’s benefits, including texture, stability, cost and dietary alternatives. Vegetable oils such as palm and soya continue to be the major speciality fats used as substitutes; however, exotic fats are of particular interest as alternatives to the major vegetable oils. Exotic fats are defined as a group of fats obtained from wild, uncultivated crops. This characteristic means that crop sizes are extremely variable year to

IMAGE: DBVIRAGO / ADOBE STOCK

Exotic fats for chocolate

EXAMPLES OF EXOTIC FATS INCLUDE ILLIPE AND SHEA, AS WELL AS MANGO KERNEL BUTTER, SAL, DHUPA AND MAHUA

year. Many exotic fats have specific characteristics that are useful, in particular in the production of chocolate and confectionery. They also offer a perceived sustainable alternative to traditional palm and palm kernel oil, especially in Europe, which is well-known for its suspicious attitude towards palm oil. Although crop sizes are variable due to being wild and uncultivated, exotic fats also often have a high potential for growth. In theory, once some cultivation is introduced and collections are organised, available quantities of exotic fat has the potential to increase considerably.

Chocolate and confectionery The Wall Street Journal reported in January that global demand for chocolate remains strong. In particular, it reported an increase in demand from China and India, not traditionally large consumers, as chocolate has long been perceived as an unaffordable luxury. In 2015, global demand for chocolate was up 0.6% to 7.1M tonnes – including a 5.9% jump in Asia, Euromonitor International reported. However, production of chocolate’s most

crucial ingredient, cocoa, is volatile, and subject to weather, instability in producing countries, and pests and disease. Production has ranged from 3.43M tonnes in 2006/07 to 4.23M tonnes in 2014/15 and a forecast 4.15M tonnes for 2015/16, according to International Cocoa Organization statistics. The fall in production caused prices of cocoa to jump nearly 40% since the beginning of 2012. From lows of US$2,198/kg in February 2013, prices hit a high of US$3,346/kg in December 2015 and stood at US$3,037/kg in August this year. With demand and consumption up but production of cocoa currently down, speciality fats offer a useful alternative. The purpose of exotic fats is two-fold. Firstly their use is often driven by price, for example most cocoa butter equivalents are less expensive that cocoa butter. But equivalent fats also contribute to the taste and texture of chocolate. In the EU and some Asian countries, chocolate typically contains 20% cocoa butter and producers can legally replace a quarter of the cocoa butter (5% of the total weight) with an equivalent. Availability of speciality fats in comparison to cocoa butter is now an additional driver. In

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SPEC IALITY FATS

FIGURE: LMC INTERNATIONAL

Types of symmetrical, monounsaturated triglycerides that CBEs contain

FIGURE 1: RELATIONSHIP OF COCOA BUTTER VERSUS SHEA BUTTER

POP – Palmitic-oleic-palmitic POS – Palmitic-oleic-stearic SOS – Stearic-oleic-stearic SOO – Stearic-oleic-oleic SLS – Stearic-linoleic-stearic OOO – Oleic-oleic-oleic

September 2014, Reuters reported that the world’s capacity for producing cocoa butter alternatives of all grades was around 150,000 tonnes/year, an increase of 25-30,000 tonnes since 2013. In the same report, cocoa butter prices were said to have reached highs of US$8,200/tonne in 2014, with palm-based cocoa butter equivalents averaging US$3,300/tonne – a significant price difference. Exotic fats such as shea also undercut the price of cocoa, Figure 1 (above right) shows the relationship of cocoa butter vs shea butter. Although prices fluctuate, shea has remained cheaper.

Cocoa butter alternatives A large group of exotic fats are used as various alternatives to cocoa butter. These include cocoa butter equivalents (CBE), cocoa butter replacers (CBR) and cocoa butter substitutes (CBS). The three have different chemical compositions and are utilised differently in the production of chocolate and chocolate-flavoured products. Cocoa butter is particularly special because of its melting point – it remains solid at room temperature, but melts quickly at 34-380C. Alternatives have to mimic these properties so that they do not detract from the unique texture and characteristics of cocoa butter products.

Cocoa butter equivalents Cocoa butter equivalents (CBEs) are a group of speciality fats that are mostly used to replace cocoa butter in the production of chocolate. They are nonlauric fats that require tempering. According to a report on Cocoa Butter Alternative Fats by Joanna Oracz et al, CBEs must consist of symmetrical, monounsaturated triglycerides (POP, POS, SOS) like cocoa butter, and have to behave like cocoa and mix with cocoa without affecting the melting point or processing characteristics. CBEs share similar chemical and physical characteristics with cocoa butter, including melting temperature, crystallisation temperature, melting rate and need for tempering. The use of CBEs is mainly driven by price, but Oracz says they also stablise milk fat or liquid oils in fillings, as well as increasing the melting point of chocolate and other products, useful in the production of chocolate for tropical climates. Although CBEs can be mixed with cocoa butter in practically unlimited proportions, in the EU and some Asian countries their concentration in a final

product that is labelled as chocolate cannot exceed 5%. The USA currently does not allow any blending of CBEs in products marked as ‘chocolate’. ILLIPE Illipe butter is produced from the nuts of the Shorea stenoptera tree, which grows on the islands of Borneo, Java and Sumatra, and the Philippines. It was the first CBE to be identified and, before alternatives were sought to increase the potential of CBEs, it was the only CBE used in chocolate. The butter consists of three main triglycerides, POP, POS, and SOS. The composition of the triglycerides is very similar to cocoa butter. It also has a relatively high melting point of 37-380C, which makes it particularly suitable for the production of tropical chocolate. SHEA Shea butter is an important CBE, used in the production of chocolate products in Europe. The trees grow mostly in West and sub-Saharan Africa. The shea kernel has a very high oil content of around 50%, and its main triglycerides are SOS, SOO, POS, SOL, SLS and OOO. Its high levels of SOS (40-42%) make it idea for improving the heat stability of chocolate. According to Oracz’s report, relatively high levels of triglyceride SOO cause the oil to be quite soft and therefore it needs to be fractionated to produce a stearin fraction in order to manufacture a CBE. According to the Global Shea Alliance, 650,000 tonnes of shea kernels are collected globally each year, with potential for up to 2.5M tonnes. SAL Sal is obtained from the Shorea Robusta tree – a semi-deciduous, gregarious tree that grows in moist evergreen regions of Borneo, India, Java, Malaysia and the Philippines. Annually in India, around 125,000-150,000 tonnes of fat is collected from sal seeds. The trees grow in the Indian states of Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chattisgarh, Haryana, Himachal Pradesh, Jharkhand, Madhya Pradesh, Orissa, Uttar Pradesh, Uttaranchal and West Bengal. The fruits’ seeds contain around 14-15% oil. Sal fat is used as a substitute for cocoa butter in confectionery. Additional products obtained from

sal fat are sal stearine and sal oleine. Sal stearine is a fractionated product obtained by physical press fractionation or solvent fractionation. Sal stearine is harder than cocoa butter and can be used as a substitute for CBEs and replacers. It is used in the manufacture of plain chocolate for this reason. Sal oleine is fractionated sal fat and is liquid at room temperature with a part forming solid lumps. MANGO KERNEL FAT Mango kernel fat is obtained from the seed kernels of mangoes, which grow abundantly throughout India. According to India’s Manorama Industries, an estimated 7M tonnes of mangoes are produced in India each year, and the potential availability of mango kernels is around 1M tonnes. The kernels are estimated to contain about 70,000 tonnes of mango fat, which itself has an oil content of 8-12%. The largest importers of Indian mango kernel butter are Japan, Malaysia and the EU, Times of India reported in May. Mango fat is solid, resembling cocoa butter in its physical and chemical characteristics. Once refined, the butter is edible and can be used as a CBE. Mango stearine can also be produced through the processes of solvent fractionation or press fractionation. The product is used as a CBE and replacer.

A FRUIT BUNCH GROWING ON A SAL OR SHOREA ROBUSTA TREE

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SPE CI AL I TY FATS

KOKUM KERNEL FAT Kokum kernel fat is extracted from kokum nuts found on the Garcinia indica tree, which is cultivated in specific areas of India. The kernels contain approximately 40-50% fat, and the main symmetrical triglyceride is SOS (72%) – giving it a characteristic high melting temperature between 38-420C. According to Oracz, to be used as a CBE, the butter only needs to be refined, but does not require fractionation. Fractionated kokum kernel fat contains high levels of stearin fractions, useful for chocolate filling and coating. The fat extracted from the nuts increases the hardness of chocolate and is therefore used in a variety of confectioneries.

Cocoa butter substitutes Felda Iffco defines cocoa butter substitutes (CBSs) as lauric-based, hardened, non-tempered fats with a trans fat content of less than 0.5%. Use of CBS creates elasticity, gloss retention and fat crystallisation at lower viscosities. However, CBSs are not compatible with cocoa butter, so can only be used when there is a very low content of cocoa butter present or alongside cocoa powder. PHULWARA FAT Phulwara fat is an example of a CBS. Grown on the hill slopes and valleys along river banks in the sub-Himalayan tract in India, the seeds of the fruit have a relatively high fat content (60%). A POP enriched fraction can be obtained from the fat, which can be blended with SOS fractions (from sal, mango kernel, kokum and dhupa for example) for the preparation of CBS. DHUPA The oil obtained from the seed kernels of the Vateria indica tree is known as dhupa fat. It is called a fat because it contains more than 55% saturated fatty acids, meaning it is solid at room temperature. The trees grow in the Western Ghats of India, as well as in the Karnataka and Kerala states. The kernels of the Vateria indica seeds contain 19-23% fat. Once refined the fat is edible and used as a CBS.

It’s in Our Nature

MAHUA Mahua fat comes from the seeds of the Mowrah tree, a large deciduous specimen found in India, mainly in Andhra Pradesh, Gujarat, Madhya Pradesh and Uttar Pradesh states. The kernels in the seed have an oil content of 50%. Overall the potential production of kernels is estimated to be around 1.11M tonnes with oil yield estimated to be around 400,000 tonnes. Once it has been refined, Mahua fat is used as a CBS when combined with kokum. For edible and cosmetic uses, the fat is refined by chemical conventional refining, but for other uses it is physically refined.

Innovative and efficient centrifugal technology from GEA for the utilization of renewable resources

Additional speciality fats As well as acting as alternatives to cocoa butter, speciality fats also include milk fat replacers (MFR), filling fats and lecithin.

Algae Animal and vegetable proteins Biofuels By-products from fish and meat Fermentation products (e.g. yeast) Oils and fats (refining and recovery processes) • Starch and starch derivatives • Sugar mud, vinasse, molasses

GEA-RR-01-002

IMAGE: BUTTLEFLY/ ADOBE STOCK

• • • • • •

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SPEC IALITY FATS

Milk fat replacers are useful in producing dairy or lactose-free products, and replace milk fat in products such as ice cream, sweetened condensed milk, dairy-free cheese and confectionery. Filling fats, which include confectionery fillings, are another large group of speciality fats. Filling fats have to be right for a particular product, to produce a particular taste, sensation or texture. Filling fat specialist IOI Loders Croklaan says the choice of filling fat depends on the type of product, its positioning in the market, labelling or logistic requirements. Producers must consider what they want in terms of texture, flavour and mouth feel; and finally what other ingredients are in the recipe – for example cocoa butter or laurics, and the process required to create the product, such as tempering, pre-crystallisation or rework. All these conditions require different types of filling fats. One of the most important considerations is the presence of lauric oils in confectionery. According to IOI Loders Croklaan, due to having completely different compositions, if laurics and non-laurics are mixed together, the blend’s melting behaviour will be completely wrong for one of the components – causing the final product to be much softer than expected. A lauric filling with a non-lauric coating causes more rapid fat bloom appearance. Fat bloom, the phenomenon in which the surface of chocolate becomes dull and white crystals are visible on the surface, can be avoided by selecting the correct filling fat, IOI Loders Croklaan says.

‘Production of cocoa is volatile and subject to weather, instability in producing countries, and pests and disease’ The future of speciality and exotic fats New speciality fats are being developed with hopes that they will find uses in both edible and inedible applications. An example of a new fat or oil is Algawise, made from algae oil. AlgaWise is the product of a joint venture between TerraVia (previously Solazyme) and Bunge. The companies announced in October 2015 their agreement to bolster their joint venture with the inclusion of a focus on food. With this announcement came three speciality oils and fats, which are algae based:

AlgaWise Ultra Omega-9 Algae Oil, AlgaWise High Stability Algae Oil and AlgaWise Algae Butter. According to TerraVia and Bunge, AlgaWise Algae Butter has similar functional characteristics as high-value structured fats such as shea stearin, and has a large proportion of SOS triglycerides (70%). The butter is not yet on the market but was expected to be available in the USA later this year. The companies said it was expected that the algae butter would “bring significant value in confectionery, based on its reliable, scalable and sustainable supply”. New customers for exotic fats also stand to influence the market. In early August, the Food Safety and Standards Authority of India (FSSAI) proposed allowing CBEs in chocolate. The FSSAI’s draft amendments to the Food Safety and Standards Regulations suggest the same percentage of CBEs to be allowed as Europe, capped at 5%. Amit Lohani, convenor of the Federation of Indian Food Importers (FIFI), told just-food that allowing vegetable fats in chocolate would increase the melting point, essential in India’s hot climate. The future market for exotic fats looks favourable. Global demand for shea butter, for example, is estimated to be worth US$30bn by 2020, a rise from its current value of US$10bn, according to the chief executive officer of Nigerian Export Promotion Council (NEPC), Segun Awolowo. Nigeria currently produces around 325,000 tonnes of shea nuts, according to the FAO, but wants to increase its productivity in the coming years. Rose Hales is OFI’s editorial assistant

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REN D ERIN G

IMAGE: OLEKSANDR / ADOBE STOCK

IMAGE: DANIEL PRUDEK / ADOBE STOCK

A TOTAL OF 1.2M TONNES OF RENDERED FATS WERE USED IN THE PRODUCTION OF BIOFUELS IN 2015, AN INCREASE OF 12% FROM THE PREVIOUS YEAR

Risk and opportunity Biofuels are providing an opportunity for the international rendering industry as demand for second generation renewable fuels grows. However, cheap palm and soyabean oil are threatening the ability of rendered products to be price competitive. Rose Hales writes

he global rendering industry is facing both opportunities and risks, according to Kent Swisher, vice president of the National Renderers Association, who presented a report on the global market at the 2016 International Rendering Symposium in January. Biofuels are the industry’s biggest opportunity, with the EU importing large quantities of used cooking oil (UCO) for fuel production and US domestic animal fat production also being channelled into biofuel. New emerging importers also provide opportunities for the industry. However, the industry faces stiff competition from low-priced vegetable oils such as palm and soya, in addition to the risk of animal disease closing down export markets.

Global overview The world’s top four rendering industries are the USA, the EU, Brazil and Australia. In 2015 the USA produced 4.22M tonnes of animal fat of which 21% was exported, 25% was turned into biofuel and 54%

was used domestically. The second biggest industry is the EU, which produced 2.5M tonnes in 2015. However, rendered products produced in the EU cannot be exported to third countries. Instead the union uses 25% of its rendered products to produce biofuel, with the remainder used in other domestic utilities. Brazil, the third biggest animal fat industry, produced 1.97M tonnes in 2015. It only exported 2%, turned 28% into biofuel and used the remaining 70% for other domestic uses. Finally, Australia produced 600,000 tonnes of animal fat, of which 72% was exported. Dirk Dobbelaere, secretary general of the European Fat Processors and Renderers Association (EFPRA) in the EU, said at the association’s annual conference in June that the EU processed 17M tonnes of raw material into 2.85M tonnes of animal fat in 2015. This is compared to 2014, when the EU produced 2.7M tonnes of animal fat. The EU used considerably more animal fat to produce biodiesel in 2015, 500,000 tonnes of category 1 and 2, and just over 400,000 tonnes of category 3, which was a 200,000 tonne increase from 2014.

In a market report published in April in Render Magazine, Swisher said the prices of rendered products globally declined an average of 30% in 2015, taking them down to levels not seen since the economic crisis in 2008/9. Swisher highlighted an issue that would have affected the global rendering industry, namely the discovery of high pathogenic avian influenza (HPAI) in the USA in 2014. But there were other reasons for the fall in prices. The lower global demand for rendered fats is attributed to three factors – an oversupply of palm and soya oil, the weak economies of traditional importing nations and a marked decrease in tallow production. Swisher says that the decrease in tallow caused inedible tallow exports from the USA to drop 15% in 2015. Traditional importers of tallow were South Korea, Nigeria and Turkey, but these customers were declining or disappearing completely. For example, Turkey imported only 21,000 tonnes of tallow in 2015, when in 2014 it had imported more than 100,000 tonnes – a huge decline of 65%. Mexico is the main importer of US tallow, which continued in 2015. In 2015 it imported 226,000 tonnes, a 4% decline from 2014. However, the market for tallow in the biofuels industry is expanding, Swisher said, in particular in the USA, Brazil, the EU and Singapore. UCO/yellow grease exports also declined in 2015, dropping 24% from 2014 to 253,000 tonnes. Evidentially, the EU and Mexico both imported less yellow grease than in previous years. The country that was previously one of the largest importers of yellow grease from the USA, Venezuela, imported nothing at all in 2015. According to Swisher’s figures, overall exports of fat were down 50% between 2005-2015, which he attributes to high demand from the domestic biofuel market, a strong US dollar and oversupply of competing products on the global marketplace.

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EU categories of rendered products CATEGORY 1: Animal by-products which are considered high-risk, including diseased animals with the possibility of contamination CATEGORY 2: Animal by-products which are also considered high-risk, including fallen livestock and manure CATEGORY 3: Meat which is fit for human consumption but is undesirable, also egg shells, hides and skins THE EFPRA WOULD LIKE THE EUROPEAN COMMISSION TO LIFT THE BAN ON EXPORTING RUMINANT PROCESSED ANIMAL PROTEINS

US domestic market focus The US rendering industry is still dealing with the repercussions of the discovery of HPAI. First reported in December 2014 in the northwest USA, the virus had spread to multiple states on both the west coast and the Mississippi flyway by March 2015, with precautions having to be put in place across the industry’s exports. The World Organization for Animal Health (OIE) pronounced that heat-treated rendered products were safe, and most major export markets for the USA followed this advice with the exception of China. Domestic supply in the USA began to bounce back in 2015, Swisher said, having hit rock bottom in 2014. Rendered product production increased by 2% in 2015 to nearly 8.3M tonnes. Although cattle slaughter declined, slaughter weights increased. Tallow production in the USA was 2M tonnes in 2015, a less than 1% decline from 2014. White grease (which consists of choice white grease and lard) on the other hand increased by 7% in 2015 to 623,000 tonnes, which Swisher said reflected the increase in swine slaughter. Yellow grease production remained more or less the same in 2015, down less than 1% to 926,000 tonnes. Finally, poultry fat production increased 3% last year to 503,000 tonnes. Domestic demand for the USA’s rendered products including meal and fat in 2015 was 6.8M tonnes, a 2% increase from 2014. Exports fell 7.5%, however, to 1.4M tonnes. Domestic consumption of rendered fat was 3.5M tonnes, an increase of 3.6% from 2014. A total of 1.2M tonnes of rendered fats were used in the production of biofuels in 2015, an increase of 12% from the previous year. This accounts for 28% of the total fat production. More than 614,000 tonnes of recycled oils were used in biofuels, and 559,000 tonnes of yellow grease/UCO were used. Both increased in use from 2014. Despite demand for rendered fats still being high, and only a marginal increase in production in 2015, prices of rendered fats dropped considerably compared to 2014. According to Swisher, prices have fallen for the last four years; between 2014 and 2015 prices fell about 30%. From 2011, the price of fat has fallen on average 50%. According to figures in Oil World, the USA produced 3.4M tonnes of tallow and grease in 2013/14, which was predicted to shrink slightly to 3.35M tonnes in 2015/16. In 2013/14, it exported 606,400 tonnes and it is estimated it will export

580,000 tonnes in 2015/16. In the separate category of lard, the USA produced 594,300 tonnes in 2013/14, which was expected to climb to 615,600 tonnes in 2015/16.

tallow and grease have dropped considerably since their peak in 2009/10 of 314,300 tonnes.

History of US rendering industry

Swisher predicts that there will be growth in the supply of rendered products in the next 10 years. Using data from the USDA ERS (Economic Research Service), he says that rendered fat production in the USA will grow by up to 11% in the next 10 years. The outlook for rendered products globally is favourable, according to Swisher. However, the market can be easily affected by changes in regulation, new factory openings and disease outbreaks. Since Singapore opened a renewable fuel refinery in 2011, for example, it has transformed into a major importer of tallow, making a huge difference to international trade. China, alongside other developing nations, are the unknown variables that could severely affect the market. For example, the US meat sector is dependent on exports to large importing nations such as China. A decrease in the demand for meat will naturally lead to a reduction in the production of rendered products. In January, the Chinese government outlined a plan to reduce citizens’ meat consumption by 50%, the Guardian reported. Such a move would have huge repercussions on the rendering industry worldwide. However, many experts are convinced that demand for meat in China will not be easily curbed, and that contrary to the government’s plans, meat consumption will continue to grow. In Europe, the EFPRA is working hard to convince the European Commission to lift the ban on exporting ruminant processed animal proteins (PAP), which has been in place since the last outbreak of BSE in Europe. Niels Leth Nielson, president of the EFPRA, told delegates at the EFPRA congress in June that the export ban is causing an overload of category 3 mixed-species PAP in the European market, which is in turn harming category 2 products in the fertiliser market. This has resulted in a stock build-up and the price of these products dropping steeply. He said that some renderers might be forced to incinerate these PAPs. Allowing EU member states to export rendered products to third countries will open up the market and improve the industry’s economy. The EFPRA has submitted a legal opinion to the European Commissioner for Health and Food Safety and is awaiting a response. Rose Hales is OFI’s editorial assistant

According to Swisher’s report on ‘The Global Market for Rendered Products’ in 2004, the largest concentration of “modern efficient renderers” was in the USA, where in 2004 about 25M tonnes/ year of raw materials were processed. In the EU, around 15M tonnes/year was processed, and in major livestock and meat processing countries such as Argentina, Australia, Brazil, Uruguay and New Zealand, around 10M tonnes/year was produced. In 2005, the USA produced 2.2M tonnes of inedible tallow, 790,000 tonnes of edible tallow and 606,000 tonnes of yellow grease (UCO). The value of US rendered products was estimated to be US$2.7bn, and the world’s overall value of rendered products was estimated to be in the region of US$6-8bn/year. Traditionally, a quarter of the rendered products produced in the USA were exported. Mexico imported the greatest quantities of tallow, over 430,000 tonnes in 2005, the majority of which came from the USA. China had been increasingly importing tallow from the USA. However, the discovery of BSE in North America caused China to close the market completely.

The impact of China China is not a big producer of rendered products, but it still plays an important role within the market as a major importer. China was the only country to ban the import of animal fats from North America in 2003 following the discovery of bovine spongiform encephalopathy (BSE), despite the fact that the OIE listed tallow as a product that could be safely traded with a maximum insoluble impurity of 0.15%. Additionally, China banned all processed poultry proteins from the USA in early 2015 – the only country to do so – after the discovery of HPAI, even though products had been declared safe. Oil World projected that China would produce 3.8M tonnes of lard and close to 1M tonnes of tallow and grease in 2014/15. It was predicted to import 2,000 tonnes of lard and 150,000 tonnes of tallow and grease in 2014/15. China’s lard imports have gone down slightly in the last six years, imports of

Outlook

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R EN EWABLE RESOURC ES

UCO: use and reuse

marketing and advertising correctly for the specific cultural group, and correct placement of collection facilities.

What did Greenea do? The report is an analysis of the existing household UCO collection systems in the EU and estimates the growth potential of UCO collection in Europe until 2030, showing there is still high potential for growth. It considers the key success factors of household UCO collection, the possible issues at each stage of the process and any proposed solutions, as a guide for member states looking to adopt a collection system

Types of UCO collection There are three ways to organise the UCO collection from households: n Decentralised (door-to-door collection): UCO is collected directly from individual households, often by waste management companies already operating in the region and picking up other types of waste. n Centralised: collection points are located across towns and cities in schools, shopping malls, parking lots, streets, etc. Within a centralised collection system, there are two different arrangements possible, either UCO is poured directly from the small container/ bottle to the provided containers at collection points or waste recycling centres; or it is collected in bottles/small reusable containers that are left at the collection point and, in the case of specially designed containers, exchanged for a clean one. n Combined: both methods are used, collection points across towns and door-to-door collection. Centralised collection is, by far, the most popular one due to its financial viability as it has lower operational costs than the decentralised one. It is also easier to organise and co-ordinate.

Success stories of current systems EXAMPLES OF BELIGUM’S OIL GHOST, WHICH GAVE THE COUNTRY’S VALORFRIT UCO COLLECTION CAMPAIGN AN IDENTITY

Less than 50,000 tonnes of used cooking oil is collected from households across Europe each year. Fabien Hillairet, Victor Allemandou and Katarzyna Golab from Greenea analyse current household used cooking oil (UCO) collection systems in the EU and assess the industry’s potential

CO from households is a relatively untapped and valuable resource. Some 50,000 tonnes are currently collected across the EU but Greenea estimates that the total UCO resource is 850,000 tonnes altogether across all member states, with an estimated maximum collection

quantity of 200,000 tonnes by 2030. In addition to being a valuable by product, incorrect disposal of UCO (usually down drains) creates blockages that are expensive to fix, therefore encouraging disposal through recycling has additional benefits. Lack of knowledge on the correct disposal of UCO and prospective uses are also the biggest barriers preventing the industry from reaching its full potential. Greenea was commissioned by the European Climate Foundation to produce a study that focuses on UCO as an advanced biofuel for transport. In particular it looks at UCO from households – assessing the current systems in place in certain EU member states, and considers the potential for the collection of larger quantities and for other member states without any system currently in place. The report considers how changing cooking habits may have a negative effect, although feelings of greater environmental responsibility will encourage more people to recycle their UCO. But mostly the success of a project is down to

Compared to UCO collection from hotels, restaurants and catering companies, which is well developed especially in Western Europe, household collection is only in its developmental stage. Relatively-developed systems on a national level exist only in Austria, Belgium and the Netherlands. BELGIUM In Belgium, a UCO collection system was created due to the introduction of regulation requiring producers, importers and distributors of cooking oil to report the quantities of oil placed on the market alongside quantities of UCO recycled. The Valorfrit system was created in 2004 and is an umbrella association coordinating the collection and reporting across the whole of Belgium (with slight operating differences between the three regions, Flanders, Walonia and Brussels-Capital). The entire process takes place in four stages: Stage 1: Producers, importers and distributors of edible oils inform Valorfrit about the quantities of oil placed on the Belgian market. They have to

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make the distinction between oil for domestic and professional use. Stage 2: Valorfrit-licensed operators collect used cooking oil from professional users and from containers placed across towns and cities, filled by oil coming from individuals. Stage 3: Valorfrit-licensed operators have to inform Valorfrit about the quantities of UCO collected from professionals and from collection points. They also have to provide information about the final destination of the recycled oil, for example, biodiesel production. This is the stage where the operators get payment for their work. Stage 4: Valorfrit compiles and analyses the received data and hands it over to the authorities responsible for monitoring the UCO recycling activities. In Belgium, the system is predominantly centralised. Although around 64% of UCO from households is collected, the system requires significant quantities of money for the promotional campaign. Greenea interviewed someone connected to the system in Belgium who disclosed that around US$1M/year is needed for the marketing campaign. The costs are quite unavoidable as without constant reminders, collected quantities could drop. The system is currently free for members, but obtaining enough money is a challenge that puts Valorfrit’s existence at risk. Although Belgium as a country consumes relatively high amounts of fried foods due to dietary habits, and the per capita production of UCO is higher than other EU countries, sales of edible oil have been falling in Belgium in the last two years, meaning less oil is being collected. A healthier lifestyle is being adopted, in which consumers are looking to eliminate excess quantities of fried food from their diets. The system is not directly transferable to other EU countries as the keys to its success are specific culinary habits with high fried food consumption, a well-organised collection system and entrenched recycling habits. AUSTRIA Austria was the first European country to introduce a household UCO collection system in 1999, with an initiative called Öli. It is a centralised system and more than 1M households across the country contribute. People collect their UCO in three-litre reusable containers, which were specifically designed for the purpose. Collection points are situated in municipal recycling centres. Before the system was established, only 0.20.3kg/person of UCO was collected, but this has increased to 1kg/person. Of the oil collected, 10% is converted into biogas for cogeneration unit power generation, the remaining 90% is converted into biodiesel. Austria is somewhat the exception as some traditional foods are fried in lard, so it appears that more UCO is being collected than is being produced, but more than 50% of the UCO is estimated to be animal fat. NETHERLANDS The Dutch system is a voluntary initiative and not

a response to an obligation. It started in 2011 in Amsterdam and Den Bosch and now covers the whole country with 2,000 centralised collection points. An association coordinates several partners from the whole supply chain and the UCO is used to make biodiesel. Residents are encouraged to use regular plastic bottles but are supplied with special plastic funnels to help facilitate the pouring process. The process also cooperates with sports clubs and scouts all over the Netherlands in order to get children actively participating in the UCO collection and, in return, they receive some financing for their clubs and scouting organisations. Encouraging UCO recycling habits among the younger members of society is also advantageous. Although 3,600 tonnes of UCO is collected in the Netherlands each year, this is only 30% of potential quantities. It is less efficient than in Belgium, which is probably due to the fact that in the Netherlands the recycling of UCO is voluntary. However, there is high growth potential and a strong promotional campaign.

Major difficulties and solutions While analysing the UCO household collection systems across the EU member states, Greenea compiled a list of major difficulties that the collectors had to face. During the interviews with

people involved in UCO collection from individual homes, they were also asked how they managed to efficiently solve the most difficult problems. Below is a summary of their experiences. These were divided into difficulties faced during the four key stages of the UCO collection supply chain: 1. Pouring the UCO into containers at home 2. Disposing of the containers at designated collection points 3. Emptying the UCO collection points by designated companies 4. Further cleaning and processing of the collected UCO Table 1 (below) shows the results of the analysis. The majority of best practices refer to the first stages of the household UCO supply chain as they differ largely from the collection system established at restaurants and catering services and their operational side is not yet well known to the collectors. Stages 3 and 4, however, are similar to what is already known to collectors who work with restaurants, hotels or catering services and therefore require less theoretical analysis.

Possible regional limitations As already stated above, the application of best practices is not universal and some of them are

TABLE 1: SUMMARY OF EXPERIENCES OF MAJOR DIFFICULTIES, SOLUTIONS AND BEST PRACTICES FROM THOSE INV Difficulties Solutions Best Practic 1

n Lack of public awareness of the problems caused by incorrect disposal n Public laziness in taking their UCO to the collection points n UCO being inadvertently mixed with other waste oils n The smell discouraging people from collecting

n Using promotional materials n Introducing incentives n Encouraging the use of special containers to avoid contamination n Airtight containers to keep any unpleasant smells inside

n School n Incentiv n Use of s is prefe n Distribu funnels n Easy to

n Inconvenient locations or poorly marked collection points n Collection points being full – preventing people from disposing of their oil n Oil spillages caused by inadequate packaging and incorrect use of the collection points

n Constant monitoring of the collection points to ensure they are in good locations n Surveying residents when deciding on the locations of new points n Establishing a uniform sign for collection points n Distributing special containers should prevent spillages

n Constan n Establis n Coopera superm n Establis the con n Collectio proved n Coopera

n Unloading and opening bottles is time consuming n Cold weather turns UCO solid which also makes it more difficult to empty the containers n UCO can be stolen before it is collected or small companies collect it illegally from residents

n It is difficult to speed up the process of emptying the containers/bottles, but the procedure is extremely important to prevent contamination with mineral oil n Protect UCO from theft and the cold by placing storage containers indoors and in monitored areas

n Well-ins materia the chan n Placing private a monitor

n Separating UCO and mineral oil n Dealing with the complicated nature of traceability and sustainability to get RED/ISCC certification n Instability in both quality and quantity of UCO

n Collecting UCO in separate bottles to prevent n Involve large-scale contamination if one bottle co-opera accidentally contains mineral oil n It is possible to get the oil certified provided that all the people contributing are identified by a special traceable number n Good filtration will improve the quality of the oil n Habit and obligation should stabilise the quantities of oil collected

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highly dependent on cultural and regional factors. Thus a thorough background analysis including surveys among inhabitants has to be carried out in order to better understand the habits of the individuals in a given region. This, in turn, will allow the collectors to predict which practices could work and which have to be adjusted. One of the factors that varies most among the analysed collection systems is promotion, and choosing the right media is critical. In the Netherlands, the promotional campaign encompassed an array of different channels and the person interviewed by Greenea was unable to distinguish the most effective one. Instead, they said that it is rather the omnipresence of advertising, brochures and radio programmes that makes the campaign successful. In Spain and Portugal, information sessions for citizens proved to attract a lot of attention as people could easily ask questions and demand explanations. In Italy, newspaper articles describing the project in detail and mapping the nearby collection points turned out to be an effective means of promoting the household UCO collection. Analysis of everyday habits can be useful for deciding on the location of collections points. The climate also influences some aspects of the household collection, for example the location of the collection points and the type of containers

FROM THOSE INVOLVED IN UCO COLLECTION Best Practices n School education is most effective n Incentives such as discounts or lotteries n Use of small specially-designed containers or bottles is preferred n Distribution of hermetic recyclable containers and funnels n Easy to clean and well sealable containers

n Constant monitoring and surveys n Establishing a uniform sign for UCO collection points n Cooperation with other waste collectors and supermarkets nts n Establishing a digital monitoring system to alert when nt the container needs emptying n Collection points in supermarkets and shopping malls proved to be most effective n Cooperating with scouts and sports clubs

n Well-insulated containers made from resistant materials prevent spillages of oil and protect it from the changing weather conditions n Placing the containers in areas closed for the night, private and highly frequented ones or where there is monitoring installed to prevent thefts and vandalism

n Involve players from the whole supply chain, their close co-operation helps to optimise the operation by

oil

used. In regions where the temperatures can be extreme, either very low or very high, the containers have to be well isolated to prevent freezing of the oil or an unpleasant smell in hot climates. Additionally, they should also be located inside to avoid 24-hour exposure to extreme weather conditions. While determining the frequency of collection and the number of collection points, the cooking habits of people in the analysed region should not be forgotten, as this is a decisive factor in the financial viability of the collection. Last but not least, people’s attitude towards recycling can hugely influence the success or failure of such an initiative.

RELATIVELY DEVELOPED SYSTEM MORE CO-ORDINATED INITIATIVES SINGLE LOCAL INITIATIVES NO ACTIVITY

Implementing a system Greenea found four clear categories of factors to consider: 1. Geographical: n Population and population density – to determine the number of collection points and frequency of collections n If centralised or decentralised will work better 2. Awareness: n Promotional programmes need to be in place – these should be launched before the collection system is started to educate people n It is important to choose correctly on which groups to target with the promotional materials – for example, children are believed to be the best audience by the majority of those interviewed 3. Financial n It is necessary to estimate whether it is possible to collect enough oil to cover costs n Existing successful collection projects succeeded in getting financial and organisational help from local authorities in their promotional campaigns n Sponsorship can also significantly reduce costs 4. Operational: n It may not be easy or possible to place the UCO containers in the desired locations

Major costs and influencing factors It is extremely hard to get any type of financial data about the collection as this information is often considered confidential. However, some of the expenses connected with promotional campaigns were revealed after the projects were over. The precondition for the success of a project is a well-organised information campaign, but this can be quite expensive. The costs can be mitigated by involving media, local authorities, schools and sponsors. The quantity of collection points as well as their locations greatly effect the costs. The more widely distributed they are, the higher the costs. Yet, if they are too far from housing areas, people get discouraged from properly disposing of their oil and the project becomes financially challenging. The experience of already existing systems proves that placing the containers in highly frequented places

MAP OF HOUSEHOLD COLLECTION SYSTEMS ACROSS THE EU

is more important than providing a greater number of containers.

Summary of the findings The majority of the practices described in this section are, to a large extent, culture specific and will have to be adjusted depending on the country or region of application. Therefore, it is necessary to undertake thorough local research on the habits and customs of people in a given area before deciding on the household collection strategy. Some of the issues and solutions are universal and will generally apply to all countries, for example safety concerns and protection of the containers from damages, leaking, etc. Involving numerous market players such as local governments, waste companies and water-cleaning plants is also always helpful in faster development of the household collection system. The necessity to make the collection process as simple and user-friendly as possible is also a priority across all member states. Moreover, people have to have a clear understanding of why it is important for them to recycle UCO instead of pouring it down the drains. They need to see the reason and the results. Finally, financial planning of a household UCO collection system will also depend on the situation in a given region. It will be dependent on the level of development of the UCO collection that is already in place, on the involvement of waste collection companies, local authorities, market prices, etc. It is difficult to get detailed information about the expenditures faced by established collectors, yet marketing and promotion seem to be the major costs.

Estimation of UCO resources Based on the analysis of the household UCO collection systems in Europe carried out in the previous parts of this study, it is clear that the sector

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is only in its early stage of development. Table 3 (right) shows the potential quantities calculated for each member state.

Possible scenarios up to 2030 The oil consumption in the EU is falling, which is caused mainly by growing health awareness among Europeans. At the same time, the ecological consciousness of people is growing and they pay more attention to recycling. The potential growth of UCO collection is easier to estimate in the professional sector than in the case of households. It is because the former is generally regulated by law while the latter depends on a number of factors that are difficult to measure, e.g. recycling habits, cooperation of local authorities and urbanisation. HOUSEHOLD COLLECTION: 2030 PREDICTIONS GIVEN NO PROACTIVE SUPPORT Vegetable oil consumption in households is expected to keep falling in the long run. This will decrease the potentially available UCO resources and collection volumes given no proactive support coming from the member states. Unless there is an organised campaign introducing and promoting the collection of UCO at homes, individuals will not take the initiative themselves. Therefore, it is assumed that without proactive support, there will be no real growth in the quantities collected by country. Taking into consideration the decrease in vegetable oil consumption, the collection at households in the EU could fall down by as much as 7%. HOUSEHOLD COLLECTION: 2030 PREDICTIONS GIVEN PROACTIVE SUPPORT In order to arrive at some estimations, calculations have been based on the experiences of the already existing programmes. Therefore, following the example of Belgium, it is assumed that countries that currently have no collection system could arrive at 20-30% of their resources within the next 15 years. In the case of small countries such as Luxembourg, Malta and Lithuania, a figure of 30% was predicted, as collections should be relatively easy to organise. In the case of countries where the UCO collection in the professional sector is less developed, the percentage was lowered to 15% as household collection will be more difficult to organise there. It will also be more challenging to convince people there that they should add UCO recycling to their daily habits. In the case of countries with already relatively organised household collection, it is estimated that the growth potential could be around 10% of the currently collected volume. The estimation was based on the Belgian experience. For Italy this was increased to 20% as the initiatives there are not coordinated yet and better organisation of the systems could further increase the effectiveness of the collection.

Conclusion Recycling of used cooking oil is gaining more and more attention as its improper disposal contaminates water and causes sewage blockages. Collection of individual household UCO is still not very popular in most of the EU countries, therefore

TABLE 3: ESTIMATIONS OF HOUSEHOLD UCO RESOURCES ACROSS THE EU (TONNES) Country UCO collectable Collected UCO % collected household resources Italy

156,000

15,000*

9.6%

Germany

65,000

1,209

1.9%

France

52,000

0.0%

Spain

232,000

5,000

2.2%

Romania

49,000

0.0%

Poland

47,000

0.0%

United Kingdom

42,000

8,600*

20.5%

Hungary

29,000

400

1.4%

Bulgaria

27,000

0.0%

Portugal

30,000

1,000

3.3%

Czech Republic

16,000

500

3.1%

Croatia

12,000

0.0%

Belgium

13,000

8,300

63.8%

Slovakia

10,000

360

3.6%

Netherlands

12,000

3,600

30.0%

Austria

7,000

2,350

33.6%

Greece

20,000

0.1%

Lithuania

6,000

0.0%

Latvia

4,000

0.0%

Estonia

4,000

0.0%

Slovenia

4,000

0.0%

Finland

3,000

0.0%

Sweden

3,000

1,400

46.7%

Denmark

2,000

0.1%

Ireland

2,000

0.0%

Cyprus - modelled

4,000

0.0%

Malta - modelled

2,000

0.0%

Luxembourg - modelled

1,000

0.0%

854,000

47,736

5.6%

TOTAL

*The figures for Italy and the UK come from the estimations of collectors. However, they are very high and quite unrealistic when compared to the statistics on the Dutch collection, for example, where the household recycling of UCO is already relatively well organized. In the later parts of the study, lower numbers were used, based on interviews with people responsible for collection in these countries.

it is important that this is developed and UCO recycling promoted. It is clearly visible that only Belgium, the Netherlands and Austria have managed, so far, to develop comprehensive large-scale UCO collection systems for individual households. The collection in Sweden is working very well, however, these are locally organised systems and no country-level organisation has been introduced. In some countries such as Italy, Spain and the UK, for example, there are some initiatives aimed at establishing a household UCO collection system but they are far from the Dutch or Belgian initiatives that cover the whole territory of each of the countries. Household collection has big growth potential in the EU. Greenea estimates that currently less

than 50,000 tonnes of UCO gets collected per year from households across Europe. At the same time, potential resources should be at the level of 800,000900,000 tonnes/year. This results in around 800,000 tonnes of UCO still to capture. However, as household collection has to be organised from scratch in the majority of the countries, capturing all the resources will take time and require a longterm development scenario. It is estimated that until 2030, a maximum of around 200,000 tonnes/ year could be collected providing the active and continuous support of member states. This feature is based on Greenea’s report ‘Analysis of the Current Development of Household UCO Collection Systems in the EU’, pubished on 23 May 2016 and reprinted with permission

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SH OW PREVIEW

Mumbai to host OFI India 2017

OFI India returns to the world’s largest edible oil market on 7-8 April 2017 at the Bombay Convention and Exhibition Centre

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

ith the success of the first OFI India event in Hyderabad this April, the show’s organisers are delighted to return to India by hosting OFI 2017 at the Bombay Convention and Exhibition Centre (BCEC) in Mumbai on 7-8 April 2017. OFI India 2017 will feature: An international exhibition of suppliers, producers and processors A Business Conference: ‘New Strategies, New Approaches’ A Smart Short Course technical programme

Learn from the experts Delegates at the two-day OFI India Business Congress & SOPA Soya Conference will have the chance to learn from leaders in their fields. Four modules will cover ‘World Supply and Demand – 2017/18 Price Forecast and Outlook’; ‘The Indian Market – Challenges and Opportunties’; ‘SOPA Soya Conference’; and ‘Feedstocks and Applications’. A parallel two-day Smart Short Course technical programme will be held for marketing, technical and plant personnel, entitled ‘Advanced Extraction, Processing and Use of Sunflower, Cottonseed, Soyabean, Canola and Palm Oil’.

The Indian market

Erik Heath, Chinese Sales Executive E-mail: erikheath@quartzltd.com Tel: +44 (0) 1737 855 108

Present a paper OFI India 2017 Business Conference To present a paper, contact: Serena Lim, Editor, Oils & Fats International (OFI) E-mail: serenalim@quartzltd.com

www.ofievents.com/india

India is the world’s largest edible oil importer and the second most populous nation in the world, with over 1.2bn people. It imports some 14M tonnes/ year of edible oil, against domestic production of 7-8M tonnes. With the country projected to need some 30M tonnes of edible oils in 10 years’ time and increases in population and lifestyle changes driving a rise in edible oil consumption, interest is strong in this growing market. Palm oil remains the most widely consumed oil in India due to its blending versatility with other oils and competitive price. Palm oil’s food use consumption in India was expected to rise to

THE GATEWAY OF INDIA IS AN ICONIC LANDMARK OF MUMBAI, HOST CITY OF OFI INDIA 2017 (PHOTO: ADOBE STOCK)

9.2M tonnes in 2014/15, against 3.2M tonnes for soyabean oil and 2.6M tonnes for rapeseed oil. Vegetable oil imports enter India via eight important ports – Mumbai and Kandla in the western region; Mangalore and Cochin in the southwest; Chennai, Kakinada and Vizag in the southeast; and Calcutta in the eastern region.

Mumbai – India’s commercial centre The Bombay Convention & Exhibition Centre (BCEC) is the largest permanent exhibition centre in the private sector in India. The centre is ideally situated along the Western Express Highway in Goregaon, within 10 minutes from Mumbai’s airports, walking distance to train stations and a 20 minute drive from the heart of the city. There are numerous hotels, entertainment activities, retail shopping and sightseeing spots in close proximity. Mumbai is situated on the west coast of the Indian peninsula and its superb natural harbor provided a focal point for sea routes crossing the Arabian Sea, and Mumbai soon became the main western gateway to Britain’s expanding Indian empire. The city emerged as a centre of manufacturing and industry during the eighteenth century. Today, Mumbai is India’s commercial and financial capital.

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

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Plant and technology round-up Oils & Fats International reports on some of the latest projects, technology and process news and developments around the world

Perdue builds crushing plant in Pennsylvania

Alfa Laval wins order to supply firm in Russia

weden’s Alfa Laval announced on 9 June that it had won an order to supply a vegetable oil plant in Russia. The order, booked in its food technology and life science segment, has a value of approximately SEK 55M (US$6.34M) and delivery is scheduled for 2017. It comprises the delivery of equipment such as high speed separators, heat exchangers and pumps

which will be used to process sunflower, rapeseed, soyabean and corn oil into refined oil and edible lecithin for further use within the farm and food industries. “I am very happy to announce this large order in Russia,” says Svante Karlsson, president of the process technology division in Alfa Laval. “It proves our strong position as a trustworthy supplier to the food industry.”

new grain elevator and soya crushing facility in Conoy township, Lancaster county, Pennsylvania being built by Perdue AgriBusiness is due to be completed by September 2017 following the granting of final approval by the state Department of Environmental Protection in May. “Perdue’s facility will be one of the nation’s most advanced soyabean processing plants,” the company says “Because it is being built on land adjacent to the Lancaster County Solid Waste Management Authority, it will have a smaller environmental footprint than the typical soyabean processing plant since processing water and steam will be provided by the authority.” The plant will be located in the heart of Pennsylvania’s soya growing region and could expand market opportunities for farmers as most local soya currently leaves the state for processing and comes back as livestock feed, with extra costs incurred on both ends of the transport cycle, Perdue says.

Richardson expands crushing capacity at Alberta canola plant

anada’s Richardson International announced on 17 August that it is investing CAN$120M (US$91M) to modernise its canola processing plant in Lethbridge, Alberta and increase crush capacity from 450,000 tonnes/year to 700,000 tonnes/year. Combined with its canola processing plant in Yorkton, Saskatchewan, Richardson will have a total processing capacity of 1.7M tonnes/year. Upgrades and enhancements to the facility began last year with the addition of new processing equipment, the company said. A high throughput seed receiving facility was now being built to provide quick turnaround for farmers and truckers delivering seed to the plant. The new high-speed receiving system would be able to receive 800 tonnes/hour of canola and would be ready for harvest deliveries in the autumn of 2017. Richardson is a worldwide handler and merchandiser of all major Canadian-grown grains and oilseeds and a vertically-integrated processor and manufacturer of oats and canola-based products. 39 OFI – SEPTEMBER/OCTOBER

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Improved yields at Molinos

MOLINOS RIO DE LA PLATA IS A LEADING FOOD COMPANY IN ARGENTINA AND A LARGER EXPORTER OF EDIBLE OILS

nzymatic degumming of edible oils allows for more effective seed oil refining and Molinos Río De La Plata’s recent ugrade in Argentina to the latest generation of a commercially available Phospholipase C (PLC) enzyme has resulted in an impressive 50% performance improvement in oil yield, says Dutch science multinational DSM. DSM says that in edible oil refining, each step to separate the oil from impurities, such as phospholipids, results in a loss of oil yield. Hydratable phospholipids are easy to remove, while non-hydratable phospholipids are more challenging to take away. “In traditional oil refining, phospholipid removal is achieved by the addition of water to the crude oil, hydrating the phospholipids and causing an emulsion to form, trapping oil in ‘gum’. This viscous gum is then separated from the bulk oil by centrifugation, in a process termed ‘water degumming’. The gum may be further processed to lecithin, or can be returned to the meal, which can have an adverse effect on the meal value, due to the dilution of the protein content.” Following the centrifugation process to separate the gum fraction from the oil, neutral oil (triacylglycerol) is entrained within the intact phospholipids in the gum. The entrained neutral oil represents a yield loss, and therefore water degumming can be costly to oil producers. This method also uses high amounts of water, energy and raw materials, increasing production costs. In addition, the risk of having potential unwanted particles in the refined oil following water degumming is bigger compared to other refining methods. A growing number of manufacturers are

www.sepigel.es

therefore turning towards a more efficient and costeffective solution: enzymatic degumming. Enzymes act naturally on specific molecules belonging to impurities, thereby increasing the precision with which oil can be refined, without affecting its quality. In enzymatic degumming, the catalytic power of phospholipases is used to break the phospholipids into water-soluble and oil-soluble fragments, disrupting emulsion formation and releasing entrained oil, making degumming easier. “This process is an economical alternative to water degumming as it makes the gums easier to separate and allows for the production of more oil. Also, compared to other refining methods, enzymes reduce the volume of gum and so decrease the dilution of protein which can be put back into meal. “This is particularly significant for the growing feed industry where feedstock is scarce and concerns around the protein content of meal is increasing. “Due to the reaction it creates, enzymatic degumming also offers a reduction in fatty content in meals, and is therefore higher protein in meals, increasing its value to producers as well the return on investment for its users. DSM says phospholipase C (PLC) enzymes are the preferred molecules for enzymatic degumming because they remove water-soluble phosphate ester from the phospholipid, leaving intact diacylglycerol oil. This is in contrast to phospholipase A (PLA), which generate lysophospholipid and a fatty acid, which has a negative impact on oil quality. DSM says Molinos Río De La Plata has used its Purifine PLC enzymes since 2010 and has become one of the Argentina’s main soya and sunflowerseed processors, processing 6,000,000 and 500,000 tonnes/year, respectively. “In late 2015, Molinos upgraded to the latest generation of PLC, DSM’s Purifine 3G, resulting in an impressive 50% performance improvement in oil yield and a net oil yield gain of 2.4%. “In addition, the use of these enzymes also resulted in reduced fatty content in the meal of 1.1% relative to results prior to using the enzyme. This has led to 0.55% higher protein in the meal, increasing its value and therefore, Molinos’ return on investment.”

IN BRIEF NORWAY: St1 Biofuels Oy, part of the Finnish energy group St1, has signed a letter of intent with Viken Skog SA – the largest forest owners’ cooperation in Norway – to build an ethanol plant at a former paper mill using forest industry residues as feedstock, SeeNews says. The plant will be located at Follum in Honefoss and will be able to produce 50M litres/year of cellulosic ethanol for transport fuel. It is expected to become operational by 2021. The company is seeking locations for new plants in all three countries – Finland, Sweden and Norway – that it operates in, SeeNews says. St1 is the co-owner and technology provider for North European Bio Tech, which has a plant fuelled with sawdust that will go live in Finland this year. WORLD: The return-on-investment for most dry condensing installations used to process edible oils is two to three years, an attractive investment to help firms achieve their environmental goals, says GEA. “After edible oil has been extracted, producers must remove potentially harmful fatty acids,” GEA says. “This is achieved in a deodorising process in which superheated steam is forced through the oil. The unwanted fatty acids attach themselves to the steam and are removed in a subsequent scrubbing process. “The water vapour remaining in the oil then needs to be removed. This is traditionally performed in a ‘wet’ condensing process. However, dry condensing uses a vacuum system that condenses water vapour directly into ice, eliminating the liquid phase. “The dry condensing process uses just one-tenth of 1% (1/1000) of the water consumed by wet condensing systems, and it requires only 10-20% of the energy.” It is also possible for stripped-off pollutants to be easily separated as they are contained in a small volume of water, GEA adds.

www.sepiolsa.com

September 15-17, 2015. MOC Munich, Germany Booth 400 41 OFI – SEPTEMBER/OCTOBER www.ofimagazine.com

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P ROC E S S I N G & TE C

Pump systems for impro

ith life cycle costs (LCC) now at the forefront of considerations when making a pump selection, decisions are now based on designs with high pumping efficiency as well as low operational and maintenance costs, says Swiss engineering and manufacturing firm Sulzer. “In a globally competitive industry, the selection of every pump is more vital than ever before and one pump-systems can now be used without the extra cost of stand-by pumps.” Sulzer says pumps are required in the food and beverage industry to keep materials moving through the production process and faced a wide range of challenges including abrasive materials, high viscosities, temperature, corrosion and entrained air. “From the processing of tough raw materials, like sugarcane, to hygienic transport of finished products, pumps of all shapes and sizes play a crucial role in delivering food to the table.” Sugar production, for example, starts with either sugarcane or sugar beet, each presenting its own challenges. “Washing processes create a muddy, sand-laden, abrasive water mixture that needs to be transferred away from the washing area to a treatment system that can recycle the water. Such an abrasive suspension will need pumps designed with excellent wear resistance properties and seals that perform reliably in this hostile environment.

Construction of plant producing fuel from forest residue begins in Quebec

More than

3500

“At each stage of the production process, a new challenge awaits; dealing with fibrous materials, entrained gases, cavitation, chemical attack, increased temperature and high viscosity materials. In each case, the application must be carefully analysed to assess the challenges. In this way, the process engineer will be able to specify the most appropriate pump for each task.” Sulzer says the latest pump design can deliver improvements in performance and reliability. In one wet corn milling operation in the USA, two conventional centrifugal pumps were used to transfer a slurry mixture of starch, gluten and fibre from a storage vessel to the fibre separation screens. The liquid contained between 20-30% air so the processor had PUMP MANUFACTURERS WORK W to use large amounts of defoamer in order to reach the required production rate. “Analysis of the application showed that both of the original pumps could be replaced with a single, duplex stainless steel, self-priming, gas removal process pump, capable of producing a head of 230ft at 1,800-2,000 USGPM. As soon

14001

MANAGEMENT SYSTEMS

012

18001

onstruction of a 40M litres/year commercial-scale plant at Port-Cartier, Quebec that will produce renewable fuel from forest residues began on 13 July. The Côte-Nord project will use Ensyn Technologies’ RTP fast pyrolysis process to convert some 65,000 tonnes of forest residues into a liquid fuel product that will be sold to north-eastern USA and eastern Canada for biofuels and heating purposes. It is located adjacent to the Arbec Port Cartier Sawmill site on the north shore of the St Lawrence Seaway. The plant will be the first commercialscale facility of its kind in Quebec, with production set to begin in 2017, a Government of Canada press release said. It is being developed by Ensyn, Arbec Forest Products Inc and Groupe Rémabec. The RTP unit is supplied by Envergent Technologies, an Ensyn and Honeywell joint venture. 42 OFI – www.ofimagazine.com

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NG & T E CH N O L O G Y

www.dsengineers.com

mproved performance

Serving the Vegetable Oil Industry From Basic Engineering to Full Turnkey Project

NUFACTURERS WORK WITH PROCESS ENGINEERS TO IMPROVE DESIGN AND COMPONENTS

as the new pump was installed, the amount of expensive defoamer could be reduced by 90%.” Sulzer says the introduction of modern materials, coating systems, sealing components and impeller designs has enabled process engineers to finely tune a pump specification

to a particular application. Pump manufacturers also work very closely with process engineers from a wide range of industries to better understand the issues and challenges that beset pumps of all sizes. This leads to improved designs of complete pumps and individual components.

Single Point Responsibility through EPC or EPCM+® with guaranteed: � Process Performances � Time Schedule � Budget

Saria fully off-grid using food waste

he SARIA Group’s Doncaster site is now running completely off-grid and using 100% renewable energy, thanks to its ReFood anaerobic digestion (AD) plant, the company said on 3 August. SARIA is Europe’s largest food by-products processor and manufactures products for use in human and animal foodstuffs, agriculture, aquaculture and industrial applications, as well as bioenergy in the form of fats, biodiesel and biogas. It also offers collection and disposal services for biological and plant waste including waste oils.

The Doncaster site recycles more than 160,000 tonnes of food waste every year, and generates 5MWh of electricity via combined heat and power. A sustainable biofertiliser is also produced as a by-product of the process, which is used by local farmers. Part of the energy produced is now being used to power other businesses sharing the Doncaster site including Nortech Foods, which produces a range of animal and vegetable fats for catering and consumer use; the SARVAL pet food plant; and SPF and APC GB, which supply ingredients for use in pet food products.

43 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

22/09/2016 10:19

STATISTIC S

USED COOKING OIL (EU€/TONNE)

STATISTICAL NEWS FROM MINTEC Used cooking oil EU prices for used cooking oil have risen since the start of the year, largely driven by an increase in the wider vegetable oils market. In the EU, rapeseed is the most common stock for biofuel. Rapeseed oil prices rose, driven by lower production in the EU and Canada, the largest exporter. Global production in 2016/17 is forecast at 26.6M tonnes, down 4% year-on-year. Consumption is forecast at 27.6M tonnes, steady year-on-year and ending stocks are forecast at 4.5M tonnes, down 18% year-on-year.

Palm oil Palm oil prices have risen due to low seasonal production and higher global demand. Global production in 2016/17 is forecast at 65.5M tonnes, up 10% year-on-year after the low yields in 2015/16. Consumption is forecast at 64.1M tonnes, up 5% year-on-year. The most important factor driving prices of palm oil, and also in the wider vegetable oil market, is the reduction of global stocks. Ending stocks of palm oil are expected to tighten at 7.1M tonnes, down 3% year-on-year.

CRUDE PALM OIL PRICES ROTTERDAM (US$/TONNE)

Palm kernel oil Despite good supply, palm kernel oil prices rose, driven by strength in the palm oil and wider vegetable oil market. Global production in 2016/17 is forecast at 7.7M tonnes, up 7%. Ending stocks are also expected to rise at 0.7M tonnes, down 8% year-on-year. Production in Indonesia, the world’s largest producer, is set to rise 8% to 4M tonnes. Production in Malaysia is expected to increase 9% to 2.4M tonnes.

PALM KERNEL OIL PRICES ROTTERDAM (US$/TONNE)

PRICES OF SELECTED OILS (US$/TONNE)

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

2014

2015

May 16

June 16

July 16

Aug 16

897 825 762 1,276 906 905 1,120

765 676 650 1,358 787 853 1,116

801 701 666 1,413 798 873 1,188

796 670 635 1,491 776 850 1,261

772 645 609 1,462 756 807 1,242

807 684 656 1,497 809 807 1,319

956 226

887 210

920 218

925 219

899 213

940 223

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

44 OFI – SEPTEMBER/OCTOBER 2016 www.ofimagazine.com

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The best way to treat your oilseeds. Flaking Mill OLFB. The flaking mill opens a new dimension when processing soy, rapeseed, sunflower and corn, among others. More than 500 tons of throughput per day, about 25 % less space requirements and a high-performance motor increase efficiency. The flake thickness is constant at all times during operation. This ensures a consistently high product quality. In addition, large swinging doors ensure good accessibility and facilitate maintenance. This is how to get the best out of oilseeds. More at buhlergroup.com / olfb or +41 71 955 11 11.

Innovations for a better world.

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