Welcome to the October 2012 issue of our market review for biomass feedstocks. As the UK’s crop harvest draws to a close, it is not only remarkable for being two weeks later than normal and for producing the lowest yields seen since the 1980s but it could also play its part in causing a major shift in EU biofuel policy.

1. NNFCC Market Review
Feedstocks Issue Seven, October 2012
E
Renewable Energy Association warning
ach month we review the latest
that “the speed & scale of proposals likely
announcements and news from
to destroy, not build on, sector innovations”.
across the global crops, wood
and wastes industries that supply bio- Crops intended for the first generation
based markets. This service is exclusively biofuels market are currently being grown
for our business members. on a relatively small area and must
conform to strict sustainability criteria to
Foreword gain financial support within the EU.
Welcome to the October 2012 issue of our Many of these crop-based biofuels can be
market review for biomass feedstocks. As produced sustainably, with little impact on
the UK’s crop harvest draws to a close, it is food prices and offer significant potential
not only remarkable for being two weeks for employment as well as greenhouse gas
later than normal and for producing the emissions savings. However, knee-jerk
lowest yields seen since the 1980s but it political decisions could derail the industry
could also play its part in causing a major and have a lasting and damaging effect
shift in EU biofuel policy. on the environment.
Talk of escalating food prices, land grabs Read on for all the latest sector news.
and questionable carbon emissions, has
damaged the reputation of biofuels. Now, Highlights
the EU looks set to bring in drastic changes
to the incentives and regulations governing Page 2 Policy News
biofuels to cap the use of food crops in
Page 3 Markets News
their production.
Page 4 Resource Availability News
While this could be beneficial to the
developing advanced biofuels market it is Page 5 Contracts News
likely to put an immediate and possibly
permanent end to the developing first Page 6 Research News
generation biofuels market, with the
Page 7 Feedstock Prices
NNFCC Market Review, October 2012, Page 1 of 8

2. Policy commodities to prevent extreme food price
swings on international markets.
A drought in the US Midwest and the Black
Sea regions sent grain prices to record highs
this summer and raised concerns of a repeat
of 2008, when a spike in food prices triggered
riots in some countries.
However, it is unclear how major producers
such as the United States, Russia or China
would welcome such an initiative during an
economic downturn. Hollande also did not
EU plans to limit use of biofuels from specify what food the reserves could include
food crops or where they could be located.
Under new draft proposals, the use of biofuels
Click here for more information.
made from crops such as rapeseed and
wheat is set to be capped at 5 per cent of
the energy used in the EU transport sector in
2020. With crop-based fuel consumption
currently standing at around 4.5 per cent,
there will be little room to increase current
production volumes. Such a limit will throw
into doubt the EU's binding target to source
10 per cent of road transport fuels from
renewable sources by the end of the Source: Spiegel
decade, the vast majority of which was
expected to come from crop-based biofuels. Biogas boom in Germany leads to
modern-day land grab
In an attempt to make up the shortfall, the
European Commission wants to increase In Germany, subsidies for the biogas industry
production of advanced biofuels made from have led to entire regions of the country
household waste and algae. The Commission being covered by corn, and investors are
has proposed that the use of such advanced eagerly waiting for local farmers' land to go
fuels should be quadruple-counted within the for sale, according to German magazine Der
EU's 10 per cent target. But with commercial Spiegel.
production volumes expected to remain low
up to 2020, it is doubtful whether the goal can An average-sized biogas facility requires
be met. 200ha of corn and needs to be constantly
fed. This hunger for corn has transformed the
Click here for more information. German landscape, according to Der
Spiegel, who report that corn is now being
France pushes for strategic food grown on 810,000 hectares in Germany. This,
says the magazine, has meant that for the first
stocks to cool prices
time in 25 years, Germany didn't produce
On Tuesday 11th September, French President enough grain to meet its own needs.
Francois Hollande said that he was trying to
persuade other world leaders to create Click here for more information.
strategic stockpiles of agricultural
NNFCC Market Review, October 2012, Page 2 of 8

3. Funding boost for Scottish Local
Authorities
Markets
Speaking at the Scottish Waste and
Resources Conference, Scotland’s
Environment Secretary Richard Lochhead
announced £1.2m of additional funding
would be made available between now and
April 2013 to help councils meet their
commitments by the end of 2013.
The new cash will be available specifically for
funding improvements to Household Waste
Recycling Centres and for increasing
collections of glass from households. The
funds will be administered by Zero Waste
Scotland, the Scottish Government’s delivery
partner. This is in addition to £5m already Palm prices fall to a three year low
made available this year to support
household food waste collections. Malaysian palm oil futures on the Bursa
Malaysia exchange fell to the lowest levels
Click here for more information. since October 2009. At the close (02 October
2012) prices were down by 8.5 per cent from
Councils snub weekly waste the benchmark December contract at
collections MYR2255/t ($739.10/t).
Just one council has applied to a £250m fund The decline is due to slowing demand and
set up by Communities Secretary Eric Pickles increasing stocks, as Malaysia sees a seasonal
to help them switch from fortnightly to weekly peak in production. Also weighing on prices is
refuse collections. The fund, which also the general softening of soyabean markets,
supports initiatives that offered rewards to as the harvest progresses at a faster than
residents for recycling, closed to new expected pace in the US.
submissions in August.
Palm oil is currently trading at a $376.96/t
discount to CBOT soya oil, a drop of 25 per
166 bids were submitted altogether, but
cent in a week. This level is the largest
according to Materials Recycling World
discount between the two oils since the
magazine only Stoke-on-Trent City Council
financial crisis began in 2008, but is unlikely to
applied for help to switch to weekly
be sustained in the longer term given the tight
collections. Five further councils bid for
soyabean supply situation in 2012/13.
support to help them in some areas where
“collections are challenging", but they are Click here for more information.
retaining fortnightly collections for most of
their residents. German biogas growth grinds to halt
However, the fund has proven popular with Rising corn prices and uncertainty about the
councils who want to change their rubbish funding of biogas plants has halted the
collections in order to promote recycling, with growth of the biogas industry in Germany
160 councils having applied for this purpose. according to German Agricultural Society,
Deutsche Landwirtschafts-Gesellschaft (DLG).
Click here for more information.
NNFCC Market Review, October 2012, Page 3 of 8

4. In 2005 there were 2690 plants in Germany
with a capacity of 1109MW. By the end of
2011 this had risen to 7621 plants with 3185
MW capacity.
However, DLG warn that by the end of 2013
there will be just 7895 biogas plants with a
generating capacity of 3312MW; an increase
of less than 4 per cent in two years.
Click here for more information.
Defra reveal final 2011-12 supply and
demand estimates
Resource Availability
Wheat: Stocks at the end of June 2012 are set
at 1.50Mt, 31kt below May’s estimate and 3
AD driving organics recycling sector
per cent below 2010/11. The Defra stocks
growth survey showed lower stock was held on-farm
in England and Wales and by UK merchants,
WRAP’s latest survey of the UK organics
ports and co-ops at the end of June 2012
recycling industry shows that growth in the
compared with June 2011.
number of permitted AD sites (48 in 2010) saw
the total input of organic waste processed via Barley: Stocks at the end of June 2012 are set
AD top the one million tonnes mark. at 0.94Mt, 124kt above May’s estimate and
70kt above 2010/11. The Defra stocks survey
At the same time, composting input volumes
showed higher stock was held at the end of
showed some growth with a total input of 5.44
June 2012 than June 2011, particularly by UK
million tonnes in 2010, up by 3.9 per cent on
merchants, ports and co-ops.
the 2009 survey.
Maize: Full season imports were reported at
Although agriculture remains the largest
0.99Mt, 142kt higher than May’s estimates as
market for compost, increasing volumes are
imports exceeded expectations in the final
also going to higher value uses such as
quarter of the year. Total usage was higher as
professional horticulture and landscaping,
a result with more maize used as animal feed.
with indications that PAS 100 certification is
Closing stocks were set at 149kt, 65kt above
enabling producers to obtain higher prices
the May estimate and 38kt above 2010/11.
from these markets.
Click here for more information.
The study shows that 7.2 million tonnes of
organic waste was recycled during this
UK harvest one of the latest in recent
period, compared to just over six million
tonnes in 2009 and there are now over 1500
years
people employed in the sector.
Combinable crop harvest 2012 is finally
Click here for more information. drawing to a close and will go on record as
one of the latest harvests in recent years. It
started in late July, around 2 weeks later than
normal due to cool temperatures delaying
crop maturity.
NNFCC Market Review, October 2012, Page 4 of 8

5. There was slow progress during the early part Old crop soybeans in stock as at 1st Sept 2012
of harvest as farmers struggled with slow totalled 4.6Mt, down 21 per cent from 1st Sept
maturing crops, high straw volumes and 2011. Consumption between June and
difficult field conditions, along with continuing August 2012 was 13.6Mt, up 23 per cent from
unsettled weather, particularly in the west the same period last year. Prices have
and north. remained fairly stable following the report
with only slight increase (0.2 per cent), trading
A more settled period of weather in early Sept at $578.20/t.
across the country coincided with the peak
timing for wheat and spring barley harvest Click here for more information.
and allowed more rapid progress, although
cool air temperatures shortened harvest day
length for some.
Contracts
Yields of winter barley and oilseed rape were
close to the 5 year average, and spring
barley slightly lower than average. However,
wheat yields were badly affected by disease
and low sunshine during grainfill resulting in
the average UK yield 10-15 per cent below
the 5 year average. Most quality measures
were fine, but cereal specific weights were
much lower than normal and frequently
below minimum market specification.
Click here for more information.
US grain stocks lower than anticipated
Terravesta seeks Miscanthus growers
US stocks of maize as of 1st Sept 2012 were
25Mt, down 12 per cent from 1st Sept 2011 Contract Miscanthus growers are being
and lower than trade expectations. Prices sought by newly launched energy pellet
reacted by rising around 3 per cent, trading supplier Terravesta. The company, which
at $291.32/t on the CBOT Dec 12 contracts earlier in the year processed its first
(28th Sept). Miscanthus cane into power-generating
pellets at its plant in Kimbolton,
Consumption between June and August 2012
Cambridgeshire, is looking to establish
was 54.8Mt, compared with 64.5Mt during the
contract growing arrangements with farmers.
same period last year. This suggests some
early demand rationing, particularly in the
Index-linked contracts ranging between five
context of drought stressed pasture which
and 10 years are available, backed up by
could have been expected to increase feed
secure end-user supply contracts. According
demand.
to the company, they will offer up to
Wheat in stock on 1st Sept 2012 was 57.25Mt, £68/tonne for Miscanthus delivered in Hesston
down 2 per cent from a year ago. Again, this bales and containing less than 16 per cent
is on the lower side of pre-report expectations moisture. Any growers interested in getting
and prices have risen 2.5 per cent to $322.2/t involved must first be accepted on to Natural
on the CBOT Dec 12 contract (28th Sept). England’s Energy Crops Scheme.
Consumption between June and August 2012
was 24.7Mt, up 27 per cent from the same Click here for more information.
period a year earlier.
NNFCC Market Review, October 2012, Page 5 of 8

6. SITA UK sign contract to supply solid Bio-based feedstock analysis project
recovered fuel receives green light
Recycling and resource management The National Science Foundation is providing
company, SITA UK, has signed a three-year a €3.67m grant to fund a team of researchers,
contract to supply 180,000 tonnes of solid led by Michigan Tech University, to visit and
recovered fuel to CEMEX in Latvia. assess the viability of bioenergy projects in
North and South America.
The fuel will be produced by processing
residual commercial waste in a new £6 million Research will focus on a US cellulosic ethanol
purpose-built facility at Ridham Docks in Kent. facility, eucalyptus used for biodiesel in
The facility will process up to 50 tonnes of Argentina and the impact of using forest land
material per hour, said the company. Once repurposed for soyabeans and sugarcane in
processed, the solid recovered fuel material Brazil.
will be used as a fossil-fuel replacement at
CEMEX’s cement production facility in The team will produce hydrology reports,
southern Latvia. The first shipment will be sent gather community feedback and assess local
out in September, say SITA. economic impacts, before analysing the
data to enable decision-makers to better
Click here for more information. understand current bioenergy production
approaches.
Click here for more information.
Research Nocturnal photosynthesis could hold
biofuels key
Newcastle University is taking part in a five-
year project to explore biofuel potential in
plants growing in harsh environments. The
NNFCC join NIAB Innovation Farm £8.8m project, funded by the US Department
partnership to promote market for of Energy, will look at the genetic
plant-based materials mechanisms of nocturnal photosynthesis, a
process displayed by some desert plants.
NNFCC have joined the NIAB Innovation Farm
By taking in carbon dioxide at night certain
project, which is part funded by the European
plants, like the agave and prickly pear, build
Regional Development Fund and is delivered
up a store of carbon which is used to power
in partnership with academics and industries
photosynthesis during the day.
involved in the development and production
of plant derived or plant based materials.
Click here for more information.
This knowledge base will allow NIAB to offer
small businesses access to experts throughout £2 million bioenergy innovation
the pipeline and a source of potential scheme open to applications
collaborators for funding proposals.
Sustainably sourced bioenergy could
Click here for more information contribute around 8-11 per cent to the UK’s
total primary energy demand by 2020.
However, more investment is needed in
research, development and demonstration
projects to drive forward innovation and
NNFCC Market Review, October 2012, Page 6 of 8

7. improve efficiency, from methods used to Also in the News
harvest plants for energy production to the
systems used to generate power from these
sources.
Many British wetland areas are currently
maintained to provide an environment for
wildlife but the harvested material from these
sites could also be used to produce energy.
Now the Government has launched a £2m
scheme aimed at encouraging innovation in
bioenergy production on wetlands.
Click here for more information. Source: Reuters
New choice of biogas feedstock Biogas plant responsible for turning
crops French honey blue
Plant breeders, like Syngenta, are developing Bees at a cluster of apiaries in northeastern
varieties aimed specifically at the biogas France have been producing honey in
market – these include improved "high mysterious shades of blue and green,
energy" maize as well as new lines of beet alarming their keepers.
and cereal crops which can be grown on
land unsuitable for maize. Mystified, the beekeepers embarked on an
investigation and discovered that a biogas
Energy production of the feedstock crops is plant 4 km away has been processing waste
the key to maximising biogas production, as from a Mars plant producing M&M's, bite-
Syngenta’s Nigel Padbury explains: sized candies in bright red, blue, green,
“Concentrated power, in the form of high yellow and brown shells.
levels of maize metabolisable energy, is the
route to optimising performance.” Click here for more information.
Click here for more information.
Feedstock Prices
Arrows indicate rise (↑), unchanged (–) or fall (↓) from previous month.
ENDEX Wood Pellets
Date €/tonne
Nov-12 131.90 (↑)
Dec-12 132.87 (↑)
Jan-13 132.41 (↑)
Q1 13 135.50 (↑)
Q2 13 136.31 (↑)
Q3 13 135.88 (↑)
For details on European wood pellet futures prices see www.apxendex.com
NNFCC Market Review, October 2012, Page 7 of 8

8. Wood Pellets (Delivered, Ex-Farm Barley Straw Ex-Farm Wheat Straw
5% VAT), UK (D1000), UK (D1000), UK
Date £/tonne £/tonne £/tonne
Oct 12 205.00-266.25 (– - –) 48.00-60.00 (– - –) 37.00-48.00 (↓ - –)
For details on UK wood pellet spot prices contact enquiries@nnfcc.co.uk
For details on straw spot prices see www.fwi.co.uk
LIFFE MATIF MATIF MATIF CBOT CBOT CBOT
Wheat Wheat Rape- Malting Wheat Maize Soybean
seed Barley
Date £/tonne €/tonne €/tonne €/tonne $/tonne $/tonne $/tonne
Nov 12 201.50 (↓) 262.00 (↓) 483.75 (↓) 244.00 (↓) - - 569.47 (↓)
Dec 12 - - - - 317.53 (↓) 292.13 (↓) -
Jan 13 203.50 (↓) 261.00 (↓) - 254.00 (↓) - - 569.19 (↓)
Feb 13 - - 484.75 (↓) - - - -
Mar 13 203.50 (↓) 259.75 (↓) 256.00 (↓) 321.75 (↓) 292.22 (↓) 552.66 (↓)
May 13 206.00 (↓) 258.25 (↓) 480.50 (↓) 257.25 (↓) 322.03 (↓) 289.96 (↓) 533.28 (↓)
Jul 13 208.15 (↓) - - - 309.72 (↓) 287.50 (↓) 528.23 (↓)
Aug 13 - - 447.75 (↓) - - - 519.23 (↓)
Sep 13 - - - - 311.10 (↓) 258.27 (↓) 504.99 (↓)
Nov 13 173.50 (↓) 229.75 (↓) 446.00 (↓) 259.00 (↓) - - -
For details on futures prices see www.hgca.com
Other biomass feedstock prices are available upon request, simply contact enquiries@nnfcc.co.uk.
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
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.
NNFCC Market Review, October 2012, Page 8 of 8