Nnfcc market review biofuels issue nineteen october 2013

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  • 1. NNFCC Market Review, October 2013, Page 1 of 9 Biofuels Highlights Page 2 Policy Page 2 Markets Page 4 Biodiesel Page 5 Bioethanol/Biobutanol Page 7 Aviation and Marine Biofuels Page 7 Novel Technologies Page 8 Events Page 9 Commodity Prices NNFCC Market Review Issue Nineteen, October 2013 ach month we review the latest announcements and news from across the global biofuels market. This service is exclusively for our members. Foreword Welcome to the October issue of our biofuels market review. This month the world’s largest cellulosic ethanol refinery plant was inaugurated in Crescentino Italy. The opening marked the commercialisation of advance biofuels in the European market. The Beta Renewables advanced biofuels plant was privately funded and was delivered using BioChemTex’s accumulated knowledge of petrochemical refining and Novozyme’s expertise in lignocellulosic biomass processing. The plant is reported to be capable of producing fermentable sugars for around 10 cents/lb and ethanol for around $1.50 per US gallon. This accomplishment will go a long way to proving the feasibility of cost competitive cellulosic ethanol, and paves the way for future investments in the EU and global markets. Already, GraalBio announced last May plans to build five new commercial scale advanced biofuel plants using the PROESA process and ChemTex EPC services used for the Crescentino plant. Furthermore, the European Commission also awarded six advanced biofuel projects NER 300 programme funding last year in attempt to stimulate deployment. In global developments, project LIBERTY in the US is nearing completion and is expected to produce 20 million gallons of cellulosic ethanol per year once fully operational. Despite these positive developments, the EU advanced biofuel industry suffered a setback earlier this month when the Environment Committee (ENVI) did not give Corinne LePage (rapporteur for the file on proposals to amend the Renewable Energy Directive and Fuel Quality Directive), a mandate to begin negotiations with European Council. This means that biofuel reforms will likely be delayed for at least another year, due to upcoming elections in coming April. Read on for all the latest sector news. E
  • 2. NNFCC Market Review, October 2013, Page 2 of 9 Policy Biofuel reform delayed indefinitely The European Parliament's Environment Committee (ENVI) has voted to again deny a negotiating mandate to Corinne LePage, the French Liberal MEP in charge of a proposal to limit the use of biofuels produced from food crops in the EU. Last month, MEPs backed the cap proposed by the Commission, but did not give LePage a mandate to begin negotiations. LePage has since attempted to gain support for bringing forward discussions with Council but has not been successful. The refusal will mean the legislation will likely pass into a second reading, which could delay proceedings for at least a year because of the approaching end of the parliamentary term in April 2014. Click here for more information. Aviation emissions: Commission proposes applying EU ETS to European regional airspace from 1 January 2014 Source: Wiki The European Commission has proposed amending the EU emissions trading system (EU ETS) so that aviation emissions are covered for the part of flights that takes place in European regional airspace. The adjustment in the legislation would apply from 1 January 2014 and would run until a planned global market-based mechanism (MBM) becomes applicable to international aviation emissions by 2020, according to the International Civil Aviation Organization (ICAO). Connie Hedegaard, European Commissioner for Climate Action, said: "In the light of the recent progress made at ICAO, not least thanks to Europe's hard work and determination, the European Commission today has proposed to adjust the EU ETS so that emissions from the aviation sector would be covered for the part of flights that takes place in European regional airspace.” “The European Union has reduced greenhouse gas emissions considerably, and all the economic sectors are contributing to these efforts. The aviation sector also has to contribute, as aviation emission are increasing fast – doubling since 1990. I am confident that the European Parliament and the Council will move swiftly and approve this proposal without delay''. Click here for more information. Markets Report: Virtually no biofuels on the EU market come from grabbed land In the debate on the sustainability of biofuels, one concern is that EU demand may cause large scale land acquisitions with negative socio-economic impacts in countries all over the world. Commissioned by ePURE, a new Ecofys study now claims that the acreage of land possibly subject to land grabbing caused by EU biofuels demand is far less than often presented. Based on the Land Matrix of the International Land Coalition, the analysis found that, at best, only 0.5% of all deals ((or 180,000 hectares) concerned land grabs for EU biofuels.
  • 3. NNFCC Market Review, October 2013, Page 3 of 9 New EU biofuels projects, are now giving as much attention to the socio-economic aspects of biofuel production as the fuel production itself. This coupled with new legislative and regulatory frameworks within many developing countries effectively means that the EU biofuels market has raised the bar for land governance in many developing nations. Click here for more information. IISD's biofuels failures tarnish a once respectable institution Eric Sievers, chief executive of Ethanol Europe Renewables (EERL), has written a critique to Peter Wooders, senior economist at the International Institute for Sustainable Development (IISD). Wooders displayed the IISD as a paragon of integrity in a commentary in EurActiv last month. However, Sievers said, the facts painted a different picture. IISD has been criticised repeatedly of publishing eronneous ‘facts’ and drawing misleading conclusions in the report ‘Biofuels at what cost?’ published in 2013. Sievers wrote: “How IISD has so easily misled Europe about biofuels by orders of magnitude illustrates why EU climate policy is in shambles today— theatrics and unaccountability have pushed aside science and honest debate.” “The flawed IISD estimates have been widely published as credible data and used to justify regulatory changes that damage an important European industry. The result has been the loss of millions of investment funds and thousands of jobs for hard pressed European citizens.” Click here for more information. New Eurobserv’ER Barometer: Biofuels in the European Union A new Biofuels Barometer report has been published with information pertaining to the European Biofuels market, the main biofuel producing countries, and industrial players for 2012. According to the report biofuel consumption growth was ‘firm’ in the European Union, rising to almost 14.4 million tonnes of oil equivalent (toe) in 2012, i.e. a year-on-year increase of 0.4 million toe. However the previous years’ weaker growth trend was confirmed at just 2.9% between 2011 and 2012 (5.3% between 2010 and 2011). This slowdown follows the strong build-up in biofuel consumption between 2005 and 2010. Growth in 2012 was unevenly distributed across EU member states; while consumption in14 countries increased (including France, Spain, Sweden and Finland), it decreased in 10 others (such as the UK, Poland, Hungary and Italy). In the UK biofuel consumption dropped 15.9% compared to 2011; 83% of these biofuels were certified as sustainable. Click here for more information. South Africa to blend biofuels from 2015 South African fuel producers will begin mandatory blending of petrol and diesel with biofuels from 1 October 2015 as the country moves to encourage investment in its biofuels sector and reduce its reliance on imported fuel. Energy Minister Ben Martins noted that the government had approved South Africa's biofuels industrial strategy in December 2007, but incentives such as a 50% rebate on the general fuel levy for biodiesel manufacturers and a fuel tax exemption for bioethanol
  • 4. NNFCC Market Review, October 2013, Page 4 of 9 producers had been insufficient to lure investments in the biofuels sector. A Biofuels Pricing Framework would be finalised by the end of 2013, the minister said, and a Biofuels Implementation Committee had been set up to resolve all "practical or operational aspects pertaining to the blending of biofuels with mineral petrol and diesel". Click here for more information. Biodiesel Greener bio-buses to cut pollution in Canterbury Stagecoach and University of Kent staff and guests mark the investment. Source: ThisisKent Ultra-modern "bio-buses" have hit the roads of Canterbury in east Kent, ferrying university students between campus and the city centre. The six new buses, which run on 100 per cent biofuel, are being used by Stagecoach on the Unibus route between the University of Kent and city bus station. The biofuel is made by blending and refining used cooking oil and waste fat sourced from the UK food industry. The new vehicles represent an investment of £1.1million. As well as using sustainable fuel, the new buses are equipped with technologically- advanced Euro 5 engines. Operator Stagecoach expects the combination of biofuel and environmentally-friendly engines to reduce emissions by up to 50 per cent. Click here for more information. Pacific ethanol begins production of corn oil at Stockton plant Pacific Ethanol, Inc. the leading marketer and producer of low-carbon renewable fuels in the Western United States, has begun commercial production of corn oil utilizing Edeniq, Inc.’s Oil Plus™ proprietary process at its Stockton, CA plant. Neil Koehler, the company’s president and CEO, stated: “We are pleased to be producing corn oil at our Stockton plant. Corn oil is a high value co- product with multiple markets including animal feed and biodiesel. Corn oil production at our ethanol plants is an important strategy to further diversify our plant revenue streams and significantly improve operating income.” Click here for more information. US biodiesel production surpasses set target for second straight year The US biodiesel industry is on track to produce more than the 1.28 billion gallons set under the Renewable Fuels Standard (RFS) for this year, says a new report from research and consulting firm GlobalData. According to the report, biodiesel is the first Environmental Protection Agency (EPA)- designated ‘advanced biofuel’ — a category that lists alternative fuels possessing at least 50% fewer emissions than gasoline — to reach 1 billion gallons of annual production. This growth is driven in large part by a $1 per- gallon production tax credit extended through the end of 2013 by the US Congress.
  • 5. NNFCC Market Review, October 2013, Page 5 of 9 Several cities in the US have been making strides to institutionalise the use of biodiesel. In September, New York City Mayor Mike Bloomberg signed a law that requires all city diesel vehicles to use a fuel blend of 5% biodiesel (B5) by 2014, and 20% (B20) by 2016 during the warm weather months. The law also calls for the city to conduct a pilot program that studies the feasibility of using B20 throughout the whole year. In addition, the Port Authority of New York and New Jersey has been operating on B20 since 2000. Their case studies of using B20 year-round in airport emergency and snow removal equipment show biodiesel's performance capabilities are acceptable during the winter months. Click here for more information. Bioethanol/Biobutanol Crescentino biorefinery opened Ethanol refinery in Crescentino Italy, Source: Beta Renewables The world's largest advanced bioethanol production facility has been opened in Northern Italy. The biorefinery was constructed by Beta Renewables (Mossi Ghisolfi Group) and cost €150 million euros. Operating at full capacity, the plant will produce 75 million litres a year of bioethanol, produced from non-food biomass such as agricultural residues and energy crops. The project was supported by the European Commission within the 7th Framework Programme for Research and Technological Development. The “revolutionary” feature of the bio-refinery is the technology platform. The innovative PROESATM (PROduzione di Etanolo da biomasSA - Production of ethanol from biomass) technology developed by Biochemtex (a Mossi Ghisolfi Group engineering company), combined with Cellic® enzymes produced by Novozymes, makes use of sugars that are present in lignocellulosic (non-food) biomass to obtain alcohol, fuel and other chemical products. Moreover, the PROESA technology produces biofuels that ensure a reduction in greenhouse gas emissions close to 90% of those generated by fossil fuels. Click here for more information. Ensus bioethanol plant restarts in UK Ensus bioethanol plant, Source: Ensus The Ensus bioethanol plant in the UK has restarted production in September after completion of essential maintenance work. Germany-headquartered CropEnergies purchased Ensus over the summer and promised to inject £50 million (€59.8 million) into the facility and site in Teeside. CropEnergies claimed: “Essential maintenance work taking place since July is now complete and market conditions have improved meaning the process of getting the plant up to full production can now begin”.
  • 6. NNFCC Market Review, October 2013, Page 6 of 9 The plant employs 100 people and produces 400,000 litres of ethanol, 350,000 tonnes of dried high protein animal feed and 350,000 tonnes of carbon dioxide for the food and drink industry annually. Click here for more information. New ASTM International Standard establishes performance requirements for butanol for use as automotive engine fuel Butanol shows strong potential to be used as a biofuel. Now, a new ASTM International standard specification, ASTM D7862-13, covers butanol that is intended to be blended with gasoline at 1 to 12.5 volume percent for use as an automotive spark- ignition engine fuel. Glenn Johnston, executive vice president, regulatory affairs, of Gevo Inc., and member of the ASTM Subcommittee D02.A0 on Gasoline and Oxygenated Fuels, commented: “The new ASTM standard for butanol will further commercialisation of a new renewable fuel, and provide a fuel quality standard to govern the production and marketing of butanol.” Johnston encourages all interested parties to join in the standards developing activities of ASTM. The subcommittee next plans to develop a proposed standard on the use of butanol in flexible fuel vehicles. Click here for more information. KiOR announces project to double columbus production capacity KiOR, Inc. has announced that it is planning to double production capacity at its Columbus, Mississippi, cellulosic fuels facility through construction of a second facility incorporating KiOR's commercially proven technology. KiOR estimates that Columbus II will cost approximately $225 million and will take approximately 18 months to construct once financing has been achieved. KiOR expects that the Columbus II project will allow each Columbus facility to achieve improved yields, production capacity and feedstock flexibility over the original design, enabling KiOR to more quickly make progress towards its long- term goal of 92 gallons of hydrocarbon fuels per dry ton of biomass. KiOR has also announced that it has received commitments, subject only to negotiation and execution of final documentation, from Khosla Ventures and Vinod Khosla for an aggregate commitment of up to $50 million as the cornerstone investor for the Columbus II project and to meet the Company's ongoing liquidity needs Click here for more information. Another US state offers E15 biofuel at the pumps North Dakota has become the ninth state in the US to offer the public E15 fuel at the pumps. A total of six petrol stations now offer the blended fuel and the Renewable Fuels Association believes the US public is becoming more and more receptive to green fuel options. Robert White RFA director of market development said: “A recent Fuels America poll showed that 82% of Americans want E15 to be available at the petrol station.” “It is tremendous to see stations in state after state begin to offer E15 and I hope this trend will continue.” Click here for more information.
  • 7. NNFCC Market Review, October 2013, Page 7 of 9 Aviation and Marine Biofuels First gasoline produced from biomass with ‘Bioliq’ process The bioliq plant at KIT, Source: Dailyfusion For the first time, synthetic gasoline was produced by Karlsruhe Institute of Technology (KIT). The synthesis stage of the “bioliq” pilot plant successfully started operation. So far, all stages of the bioliq process, i.e. flash pyrolysis, high-pressure entrained-flow gasification, and synthesis, have been performed successfully. The project will then be completed by testing the entire process chain and optimising it for the large industrial scale. The pilot plant is expected to begin supplying high-quality fuel from straw, during mid-2014 once all stages of the bioliq process have been optimized. Construction of the bioliq synthesis stage has required an investment of about €22 million. Fifty percent was financed by the Federal Ministry of Food, Agriculture, and Consumer Protection (BMELV) and from the European Regional Development Fund (ERDF). The BMELV funds were provided via the Fachagentur Click here for more information. Novel Technologies New metabolic pathway more efficiently converts sugars into biofuel University of California, Los Angeles (UCLA) chemical engineering researchers have developed a new synthetic metabolic pathway for breaking down glucose that could lead to a 50% increase in the production of biofuels. The new pathway, described in an article recently published in the journal Nature, is intended to replace the natural metabolic pathway known as glycolysis. Glycolysis converts four of the six carbon atoms found in glucose into two-carbon molecules known as acetyl-CoenzymeA, a precursor to biofuels like ethanol and butanol. The two remaining glucose carbons are lost as carbon dioxide. Glycolysis is currently used in fermentation processes in biorefineries to convert sugars derived from plant biomass into biofuels, but the loss of two carbon atoms for every six that are input is seen as a major gap in the efficiency of the process. The UCLA research team's synthetic glycolytic pathway converts all six glucose carbon atoms into three molecules of acetyl-CoA. This synthetic pathway uses enzymes found in several distinct pathways in nature. James Liao, UCLA's Ralph M. Parsons Foundation Prof. of Chemical Engineering and chair of the chemical and biomolecular engineering department commented: "This pathway solved one of the most significant limitations in biofuel production and biorefining: losing one third of carbon from carbohydrate raw materials" "This limitation was previously thought to be insurmountable because of the way glycolysis evolved." Click here for more information
  • 8. NNFCC Market Review, October 2013, Page 8 of 9 Microbial production of short-chain alkanes Nature journal has published an article reporting the development of a bacterial strain for production of short chain alkanes, which could serve as drop in replacements for fossil-derived petroleum and diesel fuels. The article outlines the engineering of an Escherichia coli strain for biosynthesis of a variety of metabolites, including short-chain alkanes, free fatty acids, fatty esters and fatty alcohols. The strain produced up to 580.8 milligrams per litre of alkanes consisting of nonane, dodecane, tridecane, 2-methyl-dodecane and tetradecane, together with small amounts of other hydrocarbons. Click here for more information. Events Gasification 2013, 6 - 7 Nov 2013 in London, UK www.wplgroup.com/aci/conferences/eu- ecg3.asp ACI’s 3rd Annual Gasification Summit will comprise two days of formal presentations, interactive roundtable discussions and excellent networking opportunities, providing an ideal setting to convene with your peers to discuss both current operational & future planned gasification plants, end product markets, potential barriers & support policies as well as project economics & finance. NNFCC members get 15% discount on the registration fee, please email enquiries@nnfcc.co.uk for the discount code. LCA Workshops, 29-30 April in York, UK www.nnfcc.co.uk/events/new-life-cycle- assessment-workshops Following the success of our previous Life Cycle Assessment (LCA) workshops, NNFCC and North Energy bring you two new training workshops providing you with insight into how LCA's work and their applications. The workshops take place over two days;  Day 1: 29 April 2014. Introduction to LCA Workshop  Day 30 April 2014. Advanced LCA Workshop This is an NNFCC Event
  • 9. NNFCC Market Review, October 2013, Page 9 of 9 Commodity Prices Arrows indicate rise (↑), constant (–) or fall (↓) from previous month. Price, pence/RTFC Item May 13 Jul 13 Sep 13 Renewable Transport Fuel Certificate 15.50 12.10 12.15 RTFC prices, source www.nfpas-auctions.co.uk Item Price, €/tonne Oct 13 Ethanol Spot (FOB ARA T2) ↓ 731.3 Price, US$/tonne Oct 13 Biodiesel Spot (Fatty Acid Methyl Ester (FAME), 0°C, CFPP FOB ARA) ↑ 1125.25 Biodiesel Spot (Soy Methyl Ester (SME), CIF ARA T2) ↑ 1132.75 Biodiesel Spot (Palm Methyl Ester (PME), CIF ARA T2) ↑ 1052.50 Biodiesel Spot (Rapeseed Methyl Ester (RME), FOB NWE) ↑ 1247.75 European ethanol and biodiesel spot price, www.kingsman.com Price, US$/US gallon Item Nov 13 Dec 13 Jan 14 Feb 14 Ethanol Futures (CBOT) ↑ 1.791 ↑ 1.665 ↑1.636 1.636 Chicago ethanol futures, source www.cmegroup.com Price, US$/US gallon Item Sep 08 Sep 13 % change Petrol (NY) 2.36 ↓ 2.59 9.74 Diesel (NY) 3.04 ↓ 3.05 0.32 New York Harbour petrol/diesel prices, source www.indexmundi.com Price, US$/US gallon Item Oct 12 Oct 13 Expected 2013 avg. Index value (2000=100%) Jet Fuel (Global) 3.785 ↓ 2.978 – 2.964 341.9 Global jet fuel prices, source www.iata.org Disclaimer The Review has been compiled in good faith by Dr Efthalia Arvaniti and NNFCC does not accept responsibility for any inaccuracies or the products or services shown. NNFCC The Bioeconomy Consultants NNFCC, Biocentre, Phone: +44 (0)1904 435182 York Science Park, Fax: +44 (0)1904 435345 Innovation Way, E: enquiries@nnfcc.co.uk Heslington, York, Web: www.nnfcc.co.uk YO10 5DG.