EU News:
Germany's e
thanol industry
The German bioethanol industry is finding it difficult competing with cheap imports, predominately from Brazil, and the industry is also suffering from high feedstock prices, which is affecting production levels. Presently, imports of bioethanol are making up the majority of the volume required for Germany's compulsory blending of biofuels in mineral gasoline. Brazilian bioethanol is currently available for around 54-56 cents a litre, where German production costs are at 20 cents/litre.
Germany produced 394M litres (355kt) in 2007, and 431M (479kt)in 2006. Production capacity is approximately 746M litres(671kt), with 340M litres (306kt) extra under construction (eBio).
German bioethanol blending plans have been stopped
The German Environment Minister has stopped government plans to raise compulsory bioethanol blending levels in gasoline. The idea had been to raise the level of ethanol in gasoline to 10% from the current 5%, however, there were strong arguments regarding the higher blended fuel's effect on engines of older vehicles; over 3M cars were said to not be ready for the new fuel, and would therefore be forced to use more expensive unblended gasoline blends if they didn't wish their engines to be damaged.
France's biofuel expansion plan set to continue
France is to go ahead with its ambitious biofuels programme despite criticism over the fuels' negative impact on the environment and food prices. To encourage the use of biofuels within France, the government introduced a system of tax-reduced biofuel production quotas. 2007production quotas were at 1,342,000t and 561,800t for biodiesel and ethanol respectively; 2008 quotas have been set at 2,282,500t and 891,800t.
Currently the second largest biofuel producer in the EU after Germany, France has set the target that 7% of total fuel consumption by 2010, and 10% by the end of 2015 should be biofuel. Defending their decision to continue with such an ambitious plan, the French farm minister insisted only 7% of French fields had been used to produce the green fuel thus far, and in Europe as a whole, biofuels used up 2% of the bloc's cereals production.
Netherlands and Brazil to co-operate on sustainable biofuels
A memorandum of understanding including plans to cooperate on sustainable production, logistics and transport of biofuels, and developing other biomass uses has been signed between the Dutch and Brazilian governments. The Brazilian biofuel industry has many years of experience in developing relatively sustainable biofuels, and the Netherlands is seen as a strategic transit point for the rest of Europe.
US News:
USDA projections for maize usage for ethanol
USDA cut its projected 2007/08 maize consumption for fuel ethanol production by 100M bushels(2.5Mt), to overall 3.1bn bushels (79Mt). This is still sharply up from the 2.12bln bushels (54Mt) used in the prior season, and 1.60bln (41Mt) in 2005/06. The USDA claimed the reason for this cut is that the pace of new plant start-ups lags earlier expectations. (see
www.usda.gov
for full monthly report).
EIA fuel consumption projections
The EIA estimates that an extra 64 new fuel ethanol facilities are expected to be in production in 2008; and domestic ethanol production has increased from an average of 314,000bpd (44kt per day) from summer 2006, to 418,000bpd (58kt per day)in the same period in 2007. This summer, the average production is expected to increase to 550,000bpd (76kt per day).
In general, domestic consumption of liquid fuels and other petroleum in the US is forecast to decline in 2008 as a result of the economic slowdown and high petroleum prices.
Ethanol incentives and Farm payments could be cut
The new US Farm Bill could see ethanol tax incentives and crop subsidies including 'direct' payments to farmers being reduced. A representative from the House Agriculture Committee reported that $1 billion in cuts in commodity programs over ten years could happen in efforts to offset a spending increase of $9.5 billion.
The savings could include a 5-cent a gallon reduction in the ethanol blender tax credit, and also changes in some smaller ethanol programmes.
International News:
Brazil 5% biodiesel mandate to be brought forward
January 1 saw the introduction of a 2% obligatory biodiesel blend with diesel, a proportion that is due to rise to 3% from July 1 this year. It has now also been decided that the 5% share planned to be implemented in 2013, is to be brought forward to 2010. Trends indicate that a 5% mix may be in use by as early as 2009. Brazil is currently a net-exporter of gasoline, but an importer of diesel, therefore the increased biodiesel blend will reduce Brazil's diesel imports.
The Brazilian biodiesel market presently uses soyabean oil as the main feedstock, however, eventually oils from other crops such as jatropha, palm and castor bean are to be used. Analysts say that the B3 mandate will require 400M litres (360kt) more biodiesel to be consumed than the 800M litres (720Kt) required for the B2 mandate. Brazilian biodiesel production is estimated at 300kt for 2007 (FO Licht).
China looking at plans for biomass feedstock for biofuel plants
China is looking to approve more fuel ethanol facilities that will use feedstock other than grains in production; the National Development and Reform Commission has endorsed proposed plans in five provinces that intend on using sweet potatoes, sweet sorghum or cassava. No specific plants as of yet have been approved.
These proposals are inline with the previous policy established by Beijing with the aim of encouraging the use of feedstock other than grain in ethanol production. This is due to growing concerns over crops being planted for fuel at the expense of food crops.
Argentine biodiesel exports increase sharply
Biodiesel exports from Argentina rose to 144,572t in March 2008, which is up from 56,911t in February and 57,383t in January. Cumulative biodiesel exports in Q1 2008 were therefore up to 258,866t, which compares to nil in Q1 2007, and 324,212t throughout the whole of 2007. The main destinations in Q1 2008 were the US (211,513t), followed by the Netherlands (42,236t) and France (4,916t). Overall, Argentine exports are likely to continue to increase, with production levels expected at 1.55Mt by 2010 (FO Licht), due to the introduction of the B5 mandate, and expected domestic demand to be much lower than that, this means that there is potential for a large exportable surplus.
New Zealand mandatory biofuels policy may be delayed
The introduction of a mandatory biofuels content -to start at half a percent on 1 July, and then move to 3.4% by 2012- may be delayed by as much as a year, due to the growing concern over the sustainability of supply.
Philippines biofuel industry
The Philippines passed a biofuel act in 2007 making it mandatory to blend 5% of ethanol in gasoline from February 2009; which would roughly translate to 200 million litres/ 180kt of ethanol a year, according to the Philippines Sugar Millers Association Inc. Since the country's production capacity is not that much (currently only around 30M litres/27kt per year), ethanol imports are seen as a temporary measure that will be used to achieve their set target until domestic production is boosted. The main countries that The Philippines is looking to import from are Brazil and Thailand. The main feedstock to be used in domestic production is sugar cane.
Copenhagen Climate Council calls for post-Kyoto climate deal
Business leaders, scientists and policymakers from around the world have united to try and influence politicians negotiating a post-Kyoto deal at next year's UN Climate Conference in Copenhagen. The group is planning several steps leading up to the December 2009 UN conference, and in June this year, they will co-host an international research conference in Copenhagen; at this conference top scientists are to chart a course to prioritise spending and research into climate change.
Company News:
German company looking to build biodiesel plant in France
German biodiesel producer Saria Bio-Industries has expressed interest in building a biodiesel plant in France. The feedstock would be animal fats, and expected production capacity is seen at 50,000t biodiesel annually. A location has yet to be decided on. The company are keen on using animal fat as the main feedstock, since the products to be used are regarded as waste and will therefore not be an issue in the food versus fuel debate.
Saria Bio-Industries already currently has three existing plants in production in Germany (combined capacity of 212,000t biodiesel annually).
German second-generation plant begins production
Choren Industries has started producing an advanced fuel diesel called BTL (biomass to liquid), which is made from wood and other non-food biomass. The fule promises to reduce CO2 emissions by up to 90% in comparison to conventional diesel. BTL is also compatible with standard diesel engines, and can be used within the existing supply infrastructure.
The facility itself is fairly small, and production, which will be in 8 -12 months, is also expected to be modest (around 13,500t of diesel is to be produced annually).
This facility is the only one of its kind in the world thus far, and is the next step in the renewable fuel story since it is using non-food biomass instead of traditional crops. So far, most second-generation biofuel developments have only taken place in pilot and demonstration plants, Choren plan on working on a concept for the first industrial-scale BTL plant.
Amsterdam Port starts building of first biofuel plant
Construction of Amsterdam's first biofuel plant has begun. The facility will recycle the city's organic waste into green power for its residents. The planned annual capacity of the plant is to be 100,000t of biodiesel, and 40,000t of bioethanol; requiring around 350,000t of waste from the food and beverage sector, and is due to start operation by the end of 2009.
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