NNFCC market review biofuels issue one april 2012


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NNFCC market review biofuels issue one april 2012

  1. 1. NNFCC Market Review Biofuels Issue One, April 2012E for advanced biofuels made from residues ach month we review the latest and wastes. announcements and news from across the global biofuels market. And our targets shouldn‟t end with roadThis service is exclusively for our business transport fuels, this month The Committeemembers. on Climate Change urged the UK Government to include aviation andForeword shipping in their emission reduction targets and they suggest sustainable andWelcome to the launch issue of our new particularly advanced biofuels will play anbiofuels market review. The last month has important role in reducing emissions frombeen full of biofuel firsts. In the UK, Vivergo these sectors over the forthcoming years.Fuels near Hull received its first shipment ofwheat from feedstock suppliers Frontier. Read on to find out more.When fully operational later in the springthe plant will use more than 20,000 tonnes Highlightsof wheat every week or some 1.1 million Page 2 Markets Newstonnes a year, equivalent to 7.2 per cent ofthe UKs wheat harvest in 2011. This wheat Page 2 Biofuels Sustainability Newswill be used to produce 500,000 tonnes ofanimal feed and 420 million litres of Page 3 Bioethanol Newsbioethanol each year, making it the UK‟s Page 4 Biodiesel Newslargest biofuel production facility. Page 5 Biomethane NewsBut conventional biofuels are unlikely to beenough to meet the UK‟s 2020 renewable Page 6 Aviation Biofuels Newsenergy targets for transport, so it isimperative we develop a trajectory – Page 7 Commodity Pricesbeyond our current 5 per cent biofuelstarget set for 2014 – which includes support Page 8 Events NNFCC Market Review, April 2012, Page 1 of 8
  2. 2. Markets IATA has set a 2050 decarbonisation target which is likely to require the substantial use of biofuels while more recently, the EuropeanEuropean biofuel capacity exceeds Advanced Biofuels Flightpath initiative hasdemand by 60 per cent been set up to support and promote the production, storage and distribution ofThe European biofuels market is growing sustainably produced “drop in” biofuels. Theirfaster than demand can currently sustain, aim is to introduce 2 million tonnes of aviationaccording to a new review by German biofuels into the market each year by 2020,consultants ecoprog GmbH. produced through a range of next generation technologies including BtL, algaeThere are currently around 380 plants across and pyrolysis. This equates to between aboutEurope producing biofuel, with a total 7 and 10 advanced biofuel plants in theproduction capacity of 1,050 petajoules, say European Union, dedicated to the productionecoprog. However, the European market for of aviation fuel.biofuels - in particular biodiesel - is lookingincreasingly saturated and there are pressures Contact enquiries@nnfcc.co.uk for a fullfrom cheap imports from countries like the US, report on the event.Brazil, Argentina and Indonesia. Many ofthese countries are allowed to import theirbiofuel into the EU without paying any duty. Biofuels SustainabilityDespite this oversaturation, up to 40 newbiofuel production facilities are expected tobe built in Europe over the next five years.Most of these new plants will produce fuel forexpanding markets like bioethanol andsecond generation biofuels made from wasteand agricultural residues, rather thanbiodiesel. They are also likely to be largerfacilities built close to ports, where feedstockscan be imported cheaply by sea.Click here for more information. Source: Vivergo FuelsBiofuels increasingly attractive toaviation and financial communities Leaders debate whether we can produce food and biofuel from theAt the recent World Biofuels Markets same landconference in Rotterdam – where threemembers of the NNFCC team were speaking Experts from agriculture and the biofuels– there was a sense of increasing opportunity industry came together at the BP Biofuelsand excitement from the aviation and Sustainable Resilience Series in London tofinancial communities present. The increasing discuss the future of UK wheat and how it caninterest from the aviation sector follows the be a sustainable source of both food andintroduction of ambitious targets for the fuel. The debate discussed just how we willindustry‟s decarbonisation and the make the transition to an integratedintroduction of sustainable biofuels. bioeconomy, where food and fuel can be made together, and featured experts from NNFCC Market Review, April 2012, Page 2 of 8
  3. 3. the industry including Chief Executive of BioethanolNNFCC Dr Jeremy Tomkinson, Chief Executiveof BP Biofuels Phil New, Director of Forum forthe Future Jonathon Porritt, ManagingDirector of Vivergo Fuels David Richards andPresident of the National Farmers Union PeterKendall.You can watch the video of the debate here.EU report questions conventionalbiofuels sustainability Source: FrontierA new study for the European Commission „EUTransport GHG: Routes to 2050?‟ estimatesthat the abatement cost of reducing Frontier delivers first wheat to VivergoEurope‟s emissions using conventional biofuels Fuelsis between €100-€300 per tonne of carbonbefore indirect effects are counted; nearly 50 Feedstock suppliers Frontier have deliveredtimes more expensive than buying carbon the first lorry loads of wheat to Britains largestcredits on the open market at €6.14 a tonne. biofuel plant, Vivergo Fuels near Hull.The report states that recent insights show The initial delivery from Humber Gold farmersthat for many biofuels the emission of will be used for commissioning the newgreenhouse gases may increase rather than Vivergo plant and deliveries will be graduallydecrease when incorporating the ILUC effect, "ramped up" over the next few weeks until fullmaking it impossible to determine the cost production begins in late spring. Vivergo iseffectiveness of biofuels. Although the report expected to take 1,200 tonnes of wheat indid state that the range of the modelling the first two weeks but when in full productionresults was significant and the challenge for the plant will use more than 20,000 tonnes ofthe longer term is to develop biofuels that are wheat every week or some 1.1 million tonnesmore cost effective than the current a year, equivalent to 7.2 per cent of the UKsgeneration. Promising concepts seem to be wheat harvest in 2011.the development of biofuels from waste andother „rest streams‟, say the report authors. Click here for more information.Click here to download the draft report. Ensus prepares to restart biofuels refinery Bioethanol company Ensus has begun work to speed up the restart of its biofuels refinery in north-east England after a loophole which allowed imports to come into the European Union at a reduced tariff was closed. The company owns one of Europes largest biorefineries with the capacity to make about 400-450 million litres of bioethanol a year from about one million tonnes of feed wheat. NNFCC Market Review, April 2012, Page 3 of 8
  4. 4. The refinery, which entered commercial researching the production of diesel and jetoperation in 2010, was temporarily shut down fuel made this way.in May 2011. Ensus cited competition fromimports, particularly from the United States, as Click here for more information.a factor in the decision to halt production. Petrobas to spend $164 million onThe EU revised its regulations, effective April 3, developing next generation ethanolto close a loophole that allowedethanol/petrol blends with less than 30 per Brazilian oil and gas corporation Petrobras iscent petrol to be classified as a chemical looking to invest BRL300 million ($164.2 million)product rather than denatured ethanol and in developing technology for use in theattract a much lower duty rate. production of second generation ethanol, according to comments made by theClick here for more information. company‟s head of Biofuel Technology Management João Norberto Noschang Neto.Shell outline plans for advanced The figure was revealed on Tuesday at Sugarbiofuel production & Ethanol Brazil 2012, a trade event held in Sao Paolo.Petroleum giant Shell have outlined theircommitment to advanced biofuels made Petrobras will commit the capital betweenfrom crop residues and wastes in their latest now and the end of 2015, and is aiming tosustainability report, published on the 11th have commercial facilities in place capableApril. Shell revealed that they are developing of producing between 90 and 100 million litresadvanced biofuels from inedible plants and of second generation ethanol a year. Netocrop waste with a number of major expounded the benefits of secondcompanies and academic institutions. generation ethanol, observing that the cost of production currently stands at to $0.48 perWith Canadian firm Iogen Energy, Shell are litre, as opposed to $0.57 for first generationdeveloping technology that uses enzymes to ethanol, and stressing that deforestation isbreak down the cellulose in feedstocks like reduced due to the reuse of crushed canewheat and barley straw. Iogen Energy has a sugar in the process.demonstration plant in Ottawa and continuesto look into potential sites for a commercial Click here for more information.plant in Canada.But Shell arent content with using standardenzymes, they are making a new generation Biodieselof super-enzymes with Codexis in the USwhich they hope will dramatically speed up Volkswagen partners with Solazymethe conversion of biomass to ethanol. and Amyris to improve biodieselThe company also has a joint-technology technologydevelopment programme with US companyVirent to convert plant sugars and inedible Volkswagen has partnered with renewablebiomass directly into a range of fuels. A Virent fuels specialists Solazyme and Amyris todemonstration plant that opened in evaluate emissions reductions and toWisconsin, USA, in 2010 is the world‟s first demonstrate the performance of TDI Cleanfacility to convert plant sugars directly into a Diesel technology when powered bypetrol-like drop-in biofuel. Virent is also NNFCC Market Review, April 2012, Page 4 of 8
  5. 5. advanced biodiesel and renewable diesel the biodiesel company so that it canfuel. continue to produce its Biogold renewable fuel. Every litre of UCO can be converted intoUnder the agreement, Volkswagen will give one litre of biodiesel, saving about 2kg ofboth companies two products each – the carbon emissions, say the company.new 2012 Passat TDI and the 2012 Jetta TDI –so the companies can fully examine the Click here for more information.effects the fuels produced by Amyris andSolazyme will have on the Volkswagen Biomethanetechnology.Click here for more information.Solazyme & Bunge form joint venturefor commercial-scale renewable oilproduction facility in BrazilRenewable oil company Solazyme andagribusiness giants Bunge have formed aJoint Venture to build, own and operate acommercial-scale renewable tailored oilsproduction facility adjacent to Bunge‟s Source: Coca-ColaMoema sugarcane mill in Brazil. Coca-Cola reveal that running fleetThe JV, which will operate under the nameSolazyme Bunge Produtos Renováveis Ltda., on biogas could reduce costs as wellwill have an expected annual production as emissionscapacity of 100,000 metric tons of oil. Thefacility will utilise Solazyme‟s renewable Coca-Cola commissioned Cenex to conducttailored oil production technology, coupled a year-long trial to evaluate and comparewith Bunge‟s sugarcane supply and the emissions, fuel consumption, economics,processing capabilities, to produce reliability and operability of a 26 tonne Ivecosustainable tailored triglyceride oils for use in Stralis gas vehicle against that of a standardoleochemical and fuel applications in the diesel Stralis vehicle.Brazilian domestic market. The results have now been published andClick here for more information. reveal that the biogas fuelled vehicle reduced well-to-wheel greenhouse gasPrisons to fuel New Zealand (GHG) emissions by an estimated 50.3 per cent, compared to the diesel Stralis vehicle.The local Department of Corrections has However, this was achieved using asigned a deal with Biodiesel New Zealand so temporary filling station – a more efficientthat it can supply the biofuels company with permanent station being installed at theused cooking oil (UCO) from 18 of its prison Coca-Cola depot could raise the GHGkitchens across the country. savings to above 60 per cent. Additionally, operating the gas vehicle on biomethaneRather than being thrown into landfill, the reduced the fuel costs by 12.8 per cent.New Zealand corrections department willsupply about 5,000 litres a month of UCO to Click here for more information. NNFCC Market Review, April 2012, Page 5 of 8
  6. 6. Aviation Biofuels speak in unity to government, biofuel producers and other key stakeholders to support, promote and accelerate the availability of sustainable new jet fuel sources. Click here for more information. Biofuels part of the solution to tackling emissions from aviation & shipping, say UK Government advisers A new report published by The Committee on Climate Change has urged the UK Government to include aviation and shipping in their emission reduction targets and has Source: Boeing suggested sustainable biofuels will play an important role in reducing emissions fromDreamliner makes first transpacific these sectors over the forthcoming years.flight using biofuel The Committee believes sustainable biofuelsJapanese airline All Nippon Airways (ANA) will contribute 10 per cent of the fuel used inbecame the first to fly over the Pacific Ocean aviation by 2050, if used with carbon captureusing an aviation jet fuel made from biofuel. and storage (CCS). Biofuel use could reduce emissions by 18 per cent relative to fossil-The flight was also a first for Boeing, who used based kerosene fuel, says The Committee. Butsustainable biofuel in the companys new 787 they also recommend the GovernmentDreamliner for the very first time. The 787 flew supports the development of advancedwith biofuel made mainly from used cooking biofuels, as well as more efficient airframeoil and Boeing estimate that CO2 emissions and engine designs.were reduced by 30 per cent compared totodays similarly-sized airplanes. Of the The use of biofuels in marine transport is likelyreduction in greenhouse gases, about 10 per to be smaller due to limited availability ofcent can be attributed to the use of biofuel sustainable biofuel, which may be moreand approximately 20 per cent to the highly valued in other sectors. Here Thetechnology and efficiency advancements Committee believes carbon savings can beoffered by the Dreamliner, said the company. made by using larger, more efficient ships, technological improvements in propulsion,Click here for more information. hull designs and coatings, improved operational measures, along with the limitedAirbus, Boeing, Embraer collaborate use of biofuels and liquefied natural gas.on aviation biofuel commercialisation Click here for more information.Airbus, Boeing and Embraer today signed aMemorandum of Understanding to work Qantas conducts Australia’s firsttogether on the development of drop-in, biofuel flightaffordable aviation biofuels. Qantas launched Australia‟s first commercialThe three leading airframe manufacturers biofuel flight on 13th April, operating an Airbusagreed to seek collaborative opportunities to A330 between Sydney and Adelaide using a NNFCC Market Review, April 2012, Page 6 of 8
  7. 7. 50:50 blend derived from used cooking oil program using a new bio-based feedstockand conventional jet fuel. Just ahead of the specifically designed for biofuel production.flight, Qantas announced it would be The test flights, to be done in Canada withconducting a feasibility study into the the National Research Council of Canadapotential for an Australian sustainable (NRC) and Agrisoma Biosciences Inc., will alsoaviation fuel industry, backed by funding from feature in-flight collection of emissions by athe Australian Government. Shell will provide trailing aircraft, allowing for later evaluation oftechnical support for the study, which will the Green Jet Fuel‟s emissions performance.begin in May. The program will also test blends of HoneywellClick here for more information. Green Jet Fuel at higher ratios than previous demonstration flights, which have beenHoneywell Green Jet Fuel to be used conducted using a 50/50 ratio of biofuel andin ‘world’s first comprehensive test jet fuel produced from petroleum.program’ Click here for more information.UOP LLC, a Honeywell company, announcedtoday that Honeywell Green Jet Fuel™ will beused for the world‟s first comprehensive testCommodity PricesArrows indicate rise (↑) or fall (↓) from previous month. Price, US$/US gallon Item Mar 07 Mar 12 % Price increase Diesel (NY) 1.89 ↑ 3.30 74.62 Unleaded petrol (NY) 1.94 ↑ 3.17 63.40 New York Harbour petrol and diesel prices, source www.indexmundi.com Price, US$/US gallon Item Apr 11 Apr 12 Expected 2012 avg. Index value (2000=100%) Jet Fuel (Global) 3.183 ↑ 3.245 3.750 366.36 Global jet fuel prices, source www.platts.comExpected average fuel price for airline industry in 2012 is provided by IATA please see www.iata.org 2012 aviation fuel costs estimated to cost aviation industry $41 billion on 2011 fuel costs Bio jet fuels likely to cost $2.22/gallon by 2030 (2010 cost: $6.39-6.94/gallon), source Indian Oil Price, US$/US gallon Item May 12 Jun 12 Jul 12 Apr 13 Ethanol Futures (CBT) ↑ 2.166 ↑ 2.175 ↑ 2.187 ↑ 2.050 Ethanol Futures (NY) ↑ 2.215 ↑ 2.230 ↑ 2.235 ↑ 2.110 Chicago and New York ethanol futures, source www.cmegroup.com NNFCC Market Review, April 2012, Page 7 of 8
  8. 8. Item Price, €/tonne April 12 Ethanol Spot (FOB T2) ↑ 572.50 Biodiesel Spot (FAME 0°C, CFPP FOB ARA) ↑ 1219.00 Biodiesel Spot (SME, CIF ARA T2) ↑ 1227.00 Biodiesel Spot (PME, CIF ARA T2) ↑ 1189.00 Biodiesel Spot (RME, FOB NWE) ↑ 1314.00 European ethanol and biodiesel spot price, source www.kingsman.comEvents Conference in the field of biomass featuring over 800 presentations in plenary, oral andLife Cycle Assessment Workshops, 16- visual sessions. The event attracts policy and17 May 2012 in York, UK industry decision makers through severalwww.nnfcc.co.uk/events parallel events addressing special topics which are currently in the focus of discussion.Two workshops have been developed to NNFCC members receive a €140 discount offprovide a basic understanding of LCA and the standard rate if they book before 27thhow to set about doing one. The first April 2012, contact enquiries@nnfcc.co.uk forworkshop covers the principles of LCA, the discount code.requirements, problems and issues. Thesecond provides a „hands on‟ opportunity to Energy from Waste, 17-18 Septemberlearn to carry out an LCA. The workshops can 2012 in London, UKbe taken together or separately. www.smi-online.co.uk/2012energy-waste.asp20th European Biomass Conference SMis 5th annual Energy from Wasteand Exhibition, 18-22 June 2012 in conference will evaluate the contributionMilan, Italy and effect Energy from Waste will have onwww.exhibition-biomass.com our energy future. NNFCC members receive a £200 discount offThe international science and technology the standard rate, contactConference of the 20th EU BC&E is the leading enquiries@nnfcc.co.uk for the discount code. Credits and Disclaimer NNFCC Market Review is edited by Dr Matthew Aylott for NNFCC members. Feedback is welcome. The Review has been compiled in good faith and NNFCC does not accept responsibility for any inaccuracies or the products or services shown. 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. NNFCC Market Review, April 2012, Page 8 of 8