Nnfcc market review biofuels issue twentyfive april 2014

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A round up of news from the biofuels sector

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Nnfcc market review biofuels issue twentyfive april 2014

  1. 1. Welcome to the April 2014 issue of our biofuels market review! Each month we review the latest news from across the biofuels market. This service is exclusively for NNFCC members. Contents Policy ...............................................................3 Market.............................................................4 Bioethanol .....................................................5 Biomethane...................................................6 Advanced biofuels......................................6 Events ..............................................................7 Price Information ........................................9 Issue Twenty Five April 2014 NNFCC Market Review | Biofuels
  2. 2. NNFCC Market Review, April 2014, Page 2 of 10 Foreword The EU has been criticised recently for creating energy and climate policies that cause political instability, insecurity to potential capital investors and failing to set ambitious targets . It has been further criticised for developing unrealistic strategies that do not cover the long capital ROI’s that typically characterize innovative biofuels technologies. Such an example is Vireol and Ineos Bio that despite their plan to build fuel biorefineries in the UK finally moved their projects overseas to the US. The European Commission has been trying to re-anchor capital investments in new energy technologies in an attempt to reach its 2020 energy and climate goals. Recently it released the new State Aid regulations that will come into force in 1 July 2014 running to 2020. The new guidelines extend the scope of the existing guidelines on aid for Environmental protection, to the (bio)energy field, in particular to cover state aid to energy infrastructure projects, generation adequacy measures and energy intensive users. The new guidelines plan to support projects in a cautious manner so as not to undermine the development of less mature technologies and investment in innovation, like advanced biofuels. At the same time, the new IPCC report highlighted that estimated ILUC emissions are “highly uncertain, unobservable, unverifiable, and dependent on assumed policy, economic contexts, and inputs used in the modelling (see paragraph 11.13.4). Also it concluded that EU policy- makers must not ignore the benefits offered by sustainable biofuels, like EU wheat to ethanol, because EU transport emissions have risen by 36% since 1990 levels and are now responsible for 26% of Europe’s total GHG emissions. Read on for the latest market news.
  3. 3. NNFCC Market Review, April 2014, Page 3 of 10 Policy State aid: Commission adopts new rules on public support for environmental protection and energy The European Commission has adopted new rules on public support for projects in the field of environmental protection and energy. The guidelines will support Member States in reaching their 2020 climate targets, while addressing the market distortions that may result from subsidies granted to renewable energy sources. To this end, the guidelines promote a gradual move to market-based support for renewable energy. They also provide criteria on how Member States can relieve energy intensive companies that are particularly exposed to international competition from charges levied for the support of renewables. Furthermore, the guidelines include new provisions on aid to energy infrastructure and generation capacity to strengthen the internal energy market and ensure security of supply (see also MEMO/14/276). Commission Vice President in charge of competition policy Joaquín Almunia said: "It is time for renewables to join the market. The new guidelines provide a framework for designing more efficient public support measures that reflect market conditions, in a gradual and pragmatic way. Europe should meet its ambitious energy and climate targets at the least possible cost for taxpayers and without undue distortions of competition in the Single Market. This will contribute to making energy more affordable for European citizens and companies." Click here for more information. Sustainable biofuels done right offer innumerable benefits to society, says UN IPCC report The European Renewable Ethanol Association (ePURE) welcomes the findings of a UN IPCC report “Bioenergy and climate change mitigation: an assessment which is has recently been released as part of the IPCC 5 th Assessment Report. The report confirms that bioenergy has a massively positive role to play in society but more research is needed to realise its full potential. The report concludes that existing uncertainties about bioenergy should not preclude society from pursuing beneficial bioenergy options that are available. The publication of the IPCC report comes as the EU considers the future of the EU biofuels policy within its future climate and energy policy framework up to 2030. EU policy makers must not ignore the benefits offered by sustainable biofuels because transport has few, if any, alternative routes to decarbonise. EU transport emissions have risen by 36% since 1990 levels and are now responsible for 26% of Europe’s total GHG emissions. Sustainable biofuels are the only cost-effective tool that is available in the short to medium term to reduce these transport emissions. Currently EU-produced ethanol reduces GHG emissions up to 90% compared to fossil fuels, and still saves significant GHG emissions even when scientifically unreliable ILUC emissions are accounted for. The IPCC report finds that estimated ILUC emissions are “highly uncertain, unobservable, unverifiable, and dependent on assumed policy, economic contexts, and inputs used in the modelling”. The report confirms that measures to
  4. 4. NNFCC Market Review, April 2014, Page 4 of 10 address ILUC must incorporate the impacts of ILUC prevention or mitigation strategies, including the impact of forest protection measures, policies and investments to improve agricultural productivity, double cropping, and the use of degraded and marginal lands. The report also crucially recognizes that land use emissions can be reduced through animal feed co-products of biofuels that substitute the need for protein crops imports for animal feed production. These nuances are unfortunately missing from the current debate about ILUC in Europe. Click here for more information. Market Biofuels face sharp slowdown to 3.2% annual growth as next-generation fuels emerge The 53.2 billion gallon a year (BGY) biofuel industry is poised for a huge slowdown in capacity growth, to a 3.2% annual rate from 2013 to 2017 – reaching 60.4 billion gallons – down from the 19.6% growth seen from 2005 to 2013, according to Lux Research. The sharp decline is on account of a significant industry transition to novel fuels and feedstocks, to enable long-term growth in the face of impediments like the food vs. fuel debate and the blend limits for biodiesel and ethanol. Next- generation biofuels – such as renewable diesel and butanol – that can offer higher blends, in contrast, are not quite mature. “Next-generation feedstocks like waste oils and cellulosic biomass are not tied up in the food supply and could unlock significant economic advantages, assuming novel conversions can successfully commercialise,” said Andrew Soare, Lux Research Senior Analyst and the lead author of the report titled, “Emerging Feedstocks and Fuels Spark Biofuel Capacity Expansion through 2017.” “Meanwhile, next-generation fuels like renewable diesel will break down current barriers and drive long-term biofuel capacity expansion,” he added. To quantify global capacity expansion of biofuels, Lux Research analysts built a database of over 1,700 biofuel production facilities in 82 countries with capacity data through 2017, besides evaluating leading technology providers. Click here for more information. BP releases sustainability report BP has released its 2013 sustainability report, announcing that it has fulfilled its 2005 commitment to invest $8 billion in alternative energy by 2015 a full two years early. According to the report, BP has invested $8.3 million in alternative energy routes since making that commitment nearly a decade ago. However, it’s not clear if BP will continue funding alternative energy initiatives at recent levels. In a statement featured in the report, Phil New, CEO of BP Alternative Energy, said the company has not made a public commitment on future alternative energy spending, but said that the commitment made in 2005 allowed the company to cast a wide net in search of businesses that could be financially self-sustaining and a good fit for BP. Regarding biofuels, the report noted BP is expanding its biofuels operations in Brazil, where it produced 492 million liters (129.97 million gallons) of sugarcane ethanol last year. By early 2015, BP expects to have doubled production
  5. 5. NNFCC Market Review, April 2014, Page 5 of 10 capacity at its largest mill, Tropical. The company also noted that its U.K. based joint venture Vivergo ramped up operations last year. The facility in Humberside, which produces wheat- based ethanol, has an annual capacity of 420 million litres per year. Within the report, BP also notes it is working to commercialise advanced biofuels, including cellulosic fuels. Click here for more information. RSB launches simplified certification process for Bonsucro certified entities The Roundtable on Sustainable Biomaterials (RSB) is pleased to announce that Bonsucro certified operators will now be able to access RSB certification through a simplified audit process to demonstrate compliance, therefore saving costs and time. An RSB study released today concludes that RSB and Bonsucro sustainability standards have significant overlap on most of their requirements. Supported by the ISEAL Alliance, the comparison reveals that Bonsucro certified sugarcane could be de facto considered compliant with most of the RSB's twelve Principles and Criteria. RSB has additional requirements for Rural and Social Development and Food Security. This collaboration between RSB and Bonsucro will enhance the development of advanced biomaterial pathways by increasing the supply of sustainable sugar products and ethanol material to biofuel and bioenergy producers. Click here for more information. Bioethanol Vireol opens new US biofuel plant after struggling for UK finance Bioethanol producer Vireol has opened a new plant in the US after mothballing a planned UK site after investors raised concerns about the risks posed by policy instability. The new plant in Hopewell, Virginia, will be the largest of its type on the east coast of America, capable of turning corn and grain into 235 million litres of bioethanol, which can then be blended with petrol to produce a fuel with lower emissions. Vireol had earmarked a UK site in Grimsby for the plant, but found a more favourable economic and policy environment across the Atlantic after originally purchasing Hopewell for scrap. Ged Russell, managing director of Vireol, said the ongoing debate around changing EU fuel legislation to incorporate emissions from indirect land use change (ILUC), had unsettled investors. After two years of negotiations ministers voted down the proposal in December and a final decision on ILUC is now not expected until next year. Click here for more information.
  6. 6. NNFCC Market Review, April 2014, Page 6 of 10 Biomethane Gasification plant opens in Sweden to produce biomethane The Valmet Corp.-supplied gasification plant at GoBiGas was inaugurated on March 12. The Valmet Corporation gasification plant ‘GoBiGas’ (Gothenburg Biomass Gasification Project) was recently inaugurated in Gothenburg, Sweden. The plant was commissioned in late 2013 and will produce a highly energetic gas through the gasification of forest residues and wood pellets. The produced gas is similar to natural gas and will primarily be used in the transport sector with the goal to switch from liquid fossil fuels to liquefied gaseous biofuels. The new plant is first of its kind in the world. Johanna Lindén, Valmet's director of Scandinavia, energy, said: "The indirect gasification generates high-energy gas with high heating value that can be mixed with natural gas. This makes it possible to replace a lot of today's fossil transportation fuel by fossil- free fuel in gas powered vehicles.” Click here for more information. Advanced biofuels MARAD releases results of renewable diesel testing The training ship State of Michigan is owned by MARAD and operated by the Great Lakes Maritime Academy in Traverse City, Michigan US; Source: BiomassMag The U.S. Department of Transportation’s Maritime Administration (MARAD) announced the results of biofuel testing completed on board the training ship State of Michigan. The tests compared operational, vibration and emission differences between regular ultralow sulfur diesel (ULSD) and a 76/33 blend of ULSD and renewable diesel produced by Amyris Inc. The study determined that the renewable diesel blend reduced air emissions without any significant difference in engine performance, fuel economy, air emissions, engine vibration, underwater radiated noise, or material effects on the engine itself. According to information released in the MARAD study, testing also determined that the blended fuel, following seven months of storage, found there was no appreciable change in fuel composition or biological contamination. Click here for more information.
  7. 7. NNFCC Market Review, April 2014, Page 7 of 10 Events Seaweed for Biofuel on 21 May in Oban, Scotland Seaweed for Biofuel is organised by the Algal Bioenergy Special Interest Group and Innovation Norway and is aimed at enhancing collaboration and addressing supply chain challenges around developing a sustainable and robust algal biofuel network. Oleofuels 2014 on 11-12 Jun in Dusseldorf, Germany The change of name reflects the fact that the event will now cover all fuels made from oils & fats including biodiesel, HVO & bio jet. The two-day conference will bring together the leading executives and experts from across the entire value chain for two days of informative presentations, interactive discussion & excellent networking opportunities. European Biorefining Training School 2014 on 7-10 Jul in Budapest, Hungary The 3rd Biorefining Training School will be organized under the Climate-KIC’s European-wide umbrella with the cooperation of the founding institutes. Having realized the importance of the bioeconomy, the EU is focusing its efforts on the development of a variety of enabling technologies and the collection of the necessary knowledge required to bring biorefineries into the industrial arena. 16th European Congress on Biotechnology on 13-16 Jul in Edinburgh, UK The European Congress on Biotechnology is the leading conference for academic and industrial biotechnologists in Europe organised by the European Federation of Biotechnology. Opportunities in Fuels and Chemicals from Syngas and Methane Fermentation on 16 Jul in London, UK Organised by the SCI Science and Enterprise group and Bio Base NWE, the main theme of the conference will be gasification of biomass and wastes to produce synthesis gas (syngas), and conversion of syngas and methane from a variety of sources into liquid fuels and chemicals. This conference will explore the technologies being developed and their commercial potential.
  8. 8. NNFCC Market Review, April 2014, Page 8 of 10 2nd International Conference on Algal Biorefinery on 27-29 Aug in Copenhagen, Denmark This international conference aims to share research experience on aquatic biomass resources, both micro-, and macroalgae as a potential source of food, feed, biochemical, biofuels and biofertlizers. The Bioenergy from Forest Conference on 15-18 Sep in Helsinki, Finland The Conference will focus on the factors affecting the future of bioenergy and biobased modern technologies and business solutions, including logistic systems, management, total procurement chains, the effects of the energy markets, the influence of green marketing and other trends affecting forestry, agriculture, industry and climate. Biofuels International Conference 2014 on 24-25 Sep in Ghent, Belgium The 7th Biofuels International Conference will focus on the latest developments in biofuels policy, international biofuels trading, sustainability, solutions for first generation producers, progress in advanced biofuels and information on feedstock pricing and trends.
  9. 9. NNFCC Market Review, April 2014, Page 9 of 10 Price Information Prices achieved in the last three auctions for RTFCs. The price is given in pence. Sep 13 Dec 13 Jan 14 Renewable Transport Fuel Obligation (RTFO) certificate 12.15 12.00 10.00 RTFC prices, source www.nfpas-auctions.co.uk Histocial spot prices of liquid fossil fuels and biofuels. Price is given in $ per barrel. Prices of Crude oil, diesel, and jet fuel is recorded from: www.indexmundi.com; Price of ethanol from www.neo.ne.gov; Biodiesel spot prices from http://www.kingsman.com 0 20 40 60 80 100 120 140 160 180 Dec-08 Jul-09 Jan-10 Aug-10 Feb-11 Sep-11 Apr-12 Oct-12 May-13 Nov-13 Jun-14 Liquidfuelspotprice($/bl) Date Crude Oil (petroleum), simple average of three spot price; Source: IndexMundi Diesel - New York Harbor Ultra-Low Sulfur No 2 Diesel Spot Price; Source: IndexMundi Ethanol Average Rack Prices F.O.B. Omaha, Nebraska Jet Fuel Spot Price FOB - U.S. Gulf Coast Kerosene ; Source: IndexMundi FAME 0° FOB ARA; Source: Kingston
  10. 10. NNFCC Market Review, April 2014, Page 10 of 10 Credits and Disclaimer NNFCC Market Review is edited by Dr Efthalia Arvaniti 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 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.

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