NNFCC Market Review, April 2013, Page 1 of 8BiofuelsHighlightsPage 2 PolicyPage 3 BioethanolPage 5 BiodieselPage 6 IsobutanolPage 7 Aviation BiofuelsPage 7 ResearchPage 7 EventsPage 8 Commodity PricesNNFCC Market ReviewIssue Thirteen, April 2013ach month we review the latestannouncements and news fromacross the global biofuels market.This service is exclusively for ourmembers.ForewordWelcome to the April issue of our biofuelsmarket review. This month think tankChatham House produced a controversialreport on the costs and consequences ofexpanding biofuel use in the UK.The report states that increased use ofbiofuels in the UK will cost motorists around£460 million over the next year and will leadto increased food prices. This, says the report,is too high a cost for reducing greenhousegas (GHG) emissions, if any GHG reductionsare seen at all. The report also adds that thereare currently no safeguards in UK or EU policyfor dealing with the impact of biofuels onfood security and deforestation.NNFCC believes the report, which consultedonly a limited range of stakeholders, offers aone-sided view of the industry. While it is truethat biofuels often cost more than fossil fuels,this is the price we pay to reduce emissionsfrom a sector that generates around aquarter of the UK‟s domestic emissions.First generation biofuels, like ethanol fromwheat, not only have been proven tosignificantly reduce greenhouse gas emissionsbut they also allow us to make high proteinanimal feed (displacing crops like soya) andpure streams of CO2 which are used in drinksmanufacturing, as well as bringing jobs andinvestment to the UK.There are also policies in place to ensure thatonly biofuels meeting strict sustainabilitycriteria are incentivised. Furthermore, Europeis supporting the development of advancedbiofuels, made from residues and wastes,which don‟t require extra land and can offereven higher GHG savings.Read on for all the latest biofuels news.E
NNFCC Market Review, April 2013, Page 2 of 8PolicyChatham House reports on costs ofexpanding biofuel use in the UKSource: Chatham HouseThe UK target for biofuel use for 2013/14 hasbeen set at 5 per cent. However, a newreport from Chatham House estimates that ifthe UK target is reached, biofuels will cost UKmotorists £460m in the coming year. This figurerepresents the increased cost of fuel fromhigher prices at the pump and the need tofill-up the car more often because biofuelshave lower energy content. Further increasesto comply with EU biofuels targets could triplethis cost to around £1.3bn a year by 2020.The report, The Trouble with Biofuels, by formerOxfam campaigner Rob Bailey, argues thatthis does not represent good value for money.He says biofuels are an expensive way toreduce greenhouse gas emissions. Theresearch found that typically the cost ofemissions reductions from biofuels are severaltimes what the Government has identified asan appropriate price to pay.Click here for more information.Indirect Land Use Change proposalwould be a blow for UK, says NFUA proposal to reduce the size of the biofuelmarket in Europe will damage farmerconfidence and reduce the incentive toproduce for food, feed and fuel, the NFU haswarned.The warning comes following the publicationof the draft proposal on mandatory inclusionof Indirect Land Use Change (ILUC) factors inbiofuels legislation by the French MEP CorinneLepage. As the European Parliament‟s leadrapporteur on the Environment Committee,Ms Lepage will set the tone for forthcomingdebates on the contribution that biofuels canmake to the Renewable Energy Directivetargets, which currently require MemberStates to achieve 10 per cent renewabletransport fuel by 2020.The draft seeks to introduce ILUC factors onbiofuel production and tighten the capproposed by the European Commission to4.27 per cent for biodiesel produced from oilcrops. International land use modelling hasprovided a very wide range of results, andthe NFU believes that the EU Commission haschosen one modelling result, which includessome errors that skew results against biodiesel,on which to base its proposal.Click here for more information.Biofuels have role to play in reducingUK’s carbon footprint, says CCCThe Committee on Climate Change (CCC),the influential body who advise the UKGovernment on how to reduce greenhousegas emissions, has published its report on"Reducing the UKs carbon footprint andmanaging competitiveness risks". In the reportthe CCC say that biofuels will have a role toplay in reducing our greenhouse gas emissionin the transport sector.In the near to medium term, reductions insurface transport emissions can be made byimproving the efficiency of existing vehiclesand using biofuels. While in the longer termthe CCC recommends a minimal reliance onbiofuels and greater uptake of electricvehicles. Owing to the limited alternatives, theCCC expect biofuels to become increasinglyimportant in aviation.Click here for more information.
NNFCC Market Review, April 2013, Page 3 of 8International Energy Agency calls formajor scale up in biofuels productionGlobal biofuels production, Source: IEAThe IEA has published a new report, TrackingClean Energy Progress 2013, which highlightsthe importance of biofuels in reducinggreenhouse gas emissions by 2020. The reportreveals that we are not on track to meet theIEA‟s goal of holding global climate changeto a 2°C rise by 2020. According to the IEA‟sEnergy Sector Carbon Intensity Index (ESCII)our average CO2 emissions have onlyimproved by 0.02 tonnes of CO2 per tonne ofoil equivalent in the last 20 years. In order toreach the 2020 target the IEA recommendedthat annual biofuels production should morethan double and advanced biofuelscapacity must increase six-fold.Click here for more information.BioethanolFirst generationEnsus plant goes offlineSource: NFUThe Ensus plant on Teesside – one of theworld‟s largest cereal grain bio-refineries – isto go offline for a second time due to adversemarket conditions. The £300m factory atWilton is capable of processing more than 1mtonnes of wheat a year, but was mothballedin May 2011 due to slowing demand, beforereopening in August 2012. A spokesman forthe firm confirmed what he said was a„temporary pause‟ in production.The plant refines locally-grown animal feedwheat, sourced by Glencore, and is capableof annually producing more than 400 millionlitres of ethanol, 350,000 tonnes of highprotein animal feed and 300,000 tonnes ofCO2 for use in soft drinks and food production.Click here for more information.USDA proposes sugar for ethanolpurchaseAt the start of April the US Department ofAgriculture (USDA) sent a proposal to theWhite House Office of Information andRegulatory Affairs asking it to approve thesale of up to 400,000 tonnes of surplus sugar toethanol producers under the 2008 Farm BillFeedstock Flexibility Program. If approved, itwould be the first time the sugar-for-ethanolprogram was enacted.The program allows USDA to buy the surplussugar and sell it to ethanol producers at a lossto keep prices from going below mandatedlevels. Large crops in the United States andMexico have pushed sugar futures pricesbelow the trigger price for potential forfeitureby processors of sugar to the government.Click here for more information.Zimbabwe turns to E85 biofuelZimbabwe has approved an E85 (85 per centethanol) fuel blend suitable for the country‟sflexi-vehicles. The blend is expected to lowerfuel prices throughout the country, whichcurrently stands $1.51-1.59 (€1.15-1.21) a litre.Authorities in Zimbabwe recently increasedexcise duty on fossil-based diesel and petrolby 20 per cent and 25 per cent respectively.
NNFCC Market Review, April 2013, Page 4 of 8“We fully support the use of bioethanol blendswhich reduce environmental emissions as wellas enhance energy scrutiny and this is in linewith government policy which envisagesincreased biofuels uptake,” said Zimbabwe‟sEnergy Regulatory Authority (ZERA).Click here for more information.Sudan to introduce E10 at pumpsKenana Sugar (KS) will launch the firstSudanese project which uses ethanol as apetrol additive to increase octane andimprove vehicle emissions. The project, whichwill mix petrol with 10 per cent ethanol, is ajoint venture between KS and the Greater NilePetroleum Operating Company (GNPOC).Sudan inaugurated its first ethanol plant inKenana in 2009, located by the country‟smain sugar factory. Sudan currently produces65 million litres of ethanol, 10 per cent ofproduction is currently used in local marketsfor making paints and detergents.Click here for more information.AdvancedTMO to build commercial scalecellulosic ethanol plant in BrazilTMO Renewables, a UK biofuels technologydeveloper, and Brazil-based Usina SantaMaria (USM) have entered a joint venture tobuild a cellulosic ethanol plant in São Paulo.Under the agreement TMO and USM, willbuild, own and operate the 10m litre ethanolpilot plant in São Paulo, which will usesugarcane bagasse. The plant will be locatedalongside a sugar mill owned by USM and isscheduled to go into production in 2014. Thebioethanol will primarily be used to powerFlex-Fuel vehicles in the domestic market. Thetwo companies also plan to build a full-scaleindustrial plant in the future.Click here for more information.Abengoa begins operating pilot plantusing waste-to-biofuels technologyAbengoa has started operations at a wasteto biofuels demonstration plant. The plant hasa capacity to treat 25,000 tons of municipalsolid waste (MSW), from which up to 1.5million litres of bioethanol will be produced.The demonstration plant in Salamanca, Spain,uses Abengoa‟s waste-to-biofuels (W2B)technology to produce advanced biofuelsfrom MSW using fermentation treatment andenzymatic hydrolysis. During the process,organic matter is subjected to varioustreatments to produce organic fibre that isrich in cellulose and hemicellulose, which cansubsequently be converted into bioethanol.Click here for more information.ZeaChem financial troubles cut workat Ore cellulosic biorefinerySource: ZeaChemJust weeks after announcing that it hadmade ethanol from sawdust at its pilot plantin Boardman, Eastern Oregon, ZeaChem hasbeen forced to reduce its workforce while ittries to raise capital.ZeaChem is trying to build a $400 millionrefinery to create biofuels in Boardman, alongthe Columbia River. However, the companyhas failed to close on a bridge loan, leadingto layoffs at the Oregon plant as well as at itslab in California and Colorado headquarters.
NNFCC Market Review, April 2013, Page 5 of 8CEO Jim Imbler said the Boardman facilityremains staffed at a reduced capacity andthe company hopes to have financing linedup within a few weeks.Click here for more information.Aemetis restart operations at 60mgallon per year Keyes biofuels plantAemetis, a biofuel and renewable chemicalscompany, has completed plannedmaintenance at its 60 million gallon per yearcapacity ethanol plant in Keyes, California,and has restarted production.The plant will initially use maize as theprincipal feedstock, with grain sorghum or afeedstock blend used after start-up tomaximise operating income. In December2012, the US Environmental ProtectionAgency (EPA) approved grain sorghum as anadvanced biofuel, as it can reduce carbonemissions by 50 per cent compared to petrol.Click here for more information.Papaya, mango & sweet potato to betested as biofuel feedstocks in HawaiiThe Hawaiian Government has invested$200,000 (€153,800) in a biofuels and animalfeed research project with Florida-basedBiotork Hawaii via its USDA Pacific BasinAgricultural Research Centre.The conversion process, which can nowmove to pilot stage, takes two weeks anduses organically optimised algae and fungi,with Biotork claiming other potentialfeedstocks include papaya, sweet potato,glycerol, sugar cane, albizia and mango.Click here for more information.BiodieselFirst generationEU to track Argentine and Indonesianbiodiesel importsFollowing an anti-subsidy action by theEuropean Biodiesel Board, the EU has passeda law making biodiesel imports fromArgentina and Indonesia subject toregistration. Those countries represent 90 percent of EU biodiesel imports and faceretroactive duties if an investigation finds thecountries have benefited from illegalsubsidies.The European Union is already registeringbiodiesel from some companies in the twocountries as part of a separate case onalleged price dumping – deliberately sellingproducts for less abroad than at home, or forless than they cost to make.Click here for more information.German rapeseed oil exports soardespite declining domestic demandin biodiesel productionAccording to information published by theGerman Federal Office for Agriculture andFood, the amount of German rapeseed oilused for biodiesel fuel production slumped to1.036 million tonnes in 2012, down 28 per centon 2011 and 43 per cent on 2010.It believes rapeseed oil is more valuable as anexport product, saying that Netherlands tooknearly 40 per cent of the total export (300,000tonnes) in 2012, with Belgium and the UK insecond and third place respectively takingjust under 100,000 tonnes each. Due to that
NNFCC Market Review, April 2013, Page 6 of 8buoyant demand, German oil mills producedaround 3.6m tonnes of rapeseed oil in 2012, a15 per cent increase over 2011.Click here for more information.AdvancedSapphire green crude finds newcustomerSapphire’s Green Crude Farm in New Mexico,Source: SapphireAlgae-based green crude oil producerSapphire Energy has entered into acommercial agreement with Tesoro Refiningand Marketing. Tesoro will purchase crude oilfrom Sapphire‟s green crude farm in NewMexico, which recently started continuouscultivation and crude oil production fromalgae. The site has a capacity to produce 1mgallons of biodiesel and bio-jet fuel per year.Click here for more information.Dinoflagellate microalgae ‘ideal’ forbiodiesel productionA study in Spain has pinpointed dinoflagellatemicroalgae as an „easy and profitable way‟of creating biodiesel. The research was led byscientists from the Universitat Autònoma deBarcelona (UAB), in collaboration with theSpanish National Research Council, andclaims that the often overlooked group ofmarine algae species are ideally suited forbiodiesel production.Over the course of four years, tests werecarried out in natural conditions using exteriorcultures, with no artificial light or temperaturecontrol, and subject to seasonal fluctuations.The scientists also identified simpleadjustments that could improve theproduction of biodiesel, such as reusing ofleftover organic pulp, the use of air pumpsand more efficient cultivation materials.Click here for more information.IsobutanolFinal judgement in favour of Gevo inlong-running court case with ButamaxGevo’s bio-based isobutanol plant inMinnesota, Source: GevoThe US District Court for Delaware has given itsfinal judgement in favour of Gevo in a longrunning dispute between the company andButamax Advanced Biofuels, over patentinfringements claims „188 and „889. Thepatents relate to the use of a modifiedmicroorganism and separation technologyused to produce isobutanol.However, this is unlikely to be the end of thesaga as Butamax have already said they willappeal the decision. Gevo are also planningto sue Butamax for infringing the patents „375,„376 and ‟808, which are scheduled to go totrial in the US District Court of Delaware in thesecond half of 2014.Click here for more information.
NNFCC Market Review, April 2013, Page 7 of 8Aviation BiofuelsUSDA recommits to biofuels aviationproject with BoeingThe US Department of Agriculture (USDA) hasagreed to extend for five years a projectaimed at developing biofuels for the aviationindustry with FAA and industry partner Boeing.The scheme will continue to evaluatepotential feedstocks and develop supplychains, building on an initial scheme that ranuntil last year called Farm to Fly. It will alsobuild on work carried out at the USDA‟sRegional Biomass Research Centres, locatedacross the US to produce regional energy-producing feedstocks.Click here for more information.ResearchDOE renews the Great LakesBioenergy Research CentreArlington Agricultural Research Station,Source: Great Lakes Bioenergy ResearchCentreThe US Department of Energy (DOE) hasawarded the University of Wisconsin-Madison$25 million per year to fund the Great LakesBioenergy Research Centre (GLBRC) foranother five years.The Centre supports nearly 400 researchers,students and staff spanning a wide array ofdisciplines, from microbiology to economicsto plant biology and engineering. Theinnovations born of these uniquecollaborations provide the basic scientificfoundation for the sustainable, large-scaleproduction of advanced cellulosic biofuelstechnologies that will help meet the nation‟sgrowing energy needs.Click here for more information.EventsFREE Accelerating BiofuelsWebinar, 07 May 2013, onlinewww.waste-management-world.com/webcasts/05/accelerating-biofuels.htmlThis FREE webcast aims to address theregulatory drivers of waste to fuels andaddress the practical and technicalchallenges of the process, as well as providean update to projects in the US/Canada andEurope.Dr Geraint Evans, Head of Biofuels andBioenergy at NNFCC, will be speaking onadvanced biofuels in the UK.World XTL Summit, 20-22 Mayin London, UKwww.cwcxtl.comThis years summit will focus on realising BTLpotential and new prospects, evaluate thelatest developments, reveal new solutionsand opportunities and provide theknowledge and contacts needed to developyour business.LCA Workshops, 17-18 Septin York, UKwww.nnfcc.co.uk/events/new-partnership-providing-lca-workshopsFollowing the success of our previous LifeCycle Assessment (LCA) workshops, NNFCCand North Energy bring you two new trainingworkshops providing you with insight into howLCAs work and their applications.
NNFCC Market Review, April 2013, Page 8 of 8Commodity PricesArrows indicate rise (↑), constant (–) or fall (↓) from previous month.Price, pence/RTFCItem Jan 13 Feb 13 Mar 13Renewable Transport Fuel Certificate 7.67-11.00 9.00 17.97RTFC prices, source www.nfpas-auctions.co.ukItem Price, €/tonne Apr 13Ethanol Spot (FOB ARA T2) ↑ 800.10Biodiesel Spot (Fatty Acid Methyl Ester (FAME), 0°C, CFPP FOB ARA) ↓ 1070.00Biodiesel Spot (Soy Methyl Ester (SME), CIF ARA T2) ↓ 1143.00Biodiesel Spot (Palm Methyl Ester (PME), CIF ARA T2) ↓ 1013.00Biodiesel Spot (Rapeseed Methyl Ester (RME), FOB NWE) ↓ 1103.00European ethanol and biodiesel spot price, www.kingsman.comPrice, US$/US gallonItem May 13 Jun 13 Jul 13 Aug 13Ethanol Futures(CBOT)↓ 2.453 ↓ 2.389 ↓ 2.325 2.252Chicago ethanol futures, source www.cmegroup.comPrice, US$/US gallonItem Mar 08 Mar 13 % changePetrol (NY) 2.50 ↓ 2.91 +16.37Diesel (NY) 3.25 ↑ 3.04 -6.64New York Harbour petrol/diesel prices, source www.indexmundi.comPrice, US$/US gallonItem Apr 12 Apr 13 Expected 2013 avg. Index value (2000=100%)Jet Fuel (Global) 3.124 ↓ 2.702 ↓ 3.066 310.200Global jet fuel prices, source www.iata.orgDisclaimerThe Review has been compiled in good faith and NNFCC does not acceptresponsibility for any inaccuracies or the products or services shown.NNFCCThe Bioeconomy ConsultantsNNFCC, Biocentre, Phone: +44 (0)1904 435182York Science Park, Fax: +44 (0)1904 435345Innovation Way, E: firstname.lastname@example.orgHeslington, York, Web: www.nnfcc.co.ukYO10 5DG.