Today in Biofuels: EU to ban non-sustainable biofuels, impose tariff on US biodiesel; OECD calls links between biofuels and rising prices “simplistic”; POET to increase capacity by 300 Mgy in 2008
Submitted by Biofuels Digest Blog
Top Story:
The European Union is expected to publish a draft law next week banning the importation of biofuels grown in forests, grassland or wetlands, and deliver a minimum of greenhouse gas emission reductions. The ban is expected to affect palm oil based imports due to deforestation, South American ethanol and biodiesel with grassland or forest land use issues, and US corn ethanol due to lower emissions savings.
Producer News:
The CEO of POET said that the company will increase production capacity to at least 1.5 billion gallons in 2008 through new plant construction. Speaking at the Reuters Global Agriculture and Biofuels Summit, Jeff Broin said that the company expects also to add cellulosic fuel capabilities to most of its 22 existing plants. Following the completion of the proposed merger of VeraSun Energy and US BioEnergy, VeraSun will have 1.6 billion gallons in planned capacity in 2008. POET is constructing four new ethanol plants and expanding one other.
The CEO of Panda Ethanol said that it intends to earn and sell carbon credits obtained at its 115 Mgy ethanol plant in Hereford, Texas. The company said that the reductions and resulting emissions credits will come from using a cow manure power system in place of a traditional natural gas supply to power the ethanol distillation process.
In Texas, US Sustainable Energy conducted a successful demonstration of its bio-crude generation capabilities and awaits results from an algae-to-biocrude test that would place the producer in the lead in algae-based biofuels production.
International News:
In Singapore, the executive director of Ginga Global Markets told the Reuters Global Agriculture and Biofuels Summit that palm oil exports to the US and Europe will slow this year due to high prices and soy oil export competition from Argentina. Palm oil prices have spared to $1100 per tonne in recent weeks, nearly halting demand from the biofuels sector. Malaysian palm oil exports to the EU fell 20 percent between January and November.
In Indonesia, the secretary of the Indonesian Biofuel Development Team told the Reuters Global Agriculture and Biofuel Summit that Indonesia plans to substitute 10 percent of its fossil fuel usage with biofuels by 2010. The move is reportedly aimed at reducing the size of the government fuel subsidy without raising consumer prices. Cassava and molasses are expected to be the primary feedstocks.
In Hong Kong, the CEO of D1 Oil told the Reuters Global Agriculture and Biofuel Summit that the company can produce jatropha biodiesel profitably as long as the price of oil exceeds $65 per barrel. The company is planting 50,000 hectares of jatropha, in a joint venture with BP, in Africa, India and Southeast Asia, and the seedlings are expected to be fully mature in 5-6 years. With a projected yield of 650 gallons per hectare, the company will have developed more than 32 Mgy in jatropha capacity by 2012.
The managing director of Nantong Biolux Bioenergy Feed told the Reuters Global Agriculture and Biofuel Summit that Biolux plans to build an 85 Mgy biodiesel facility in Nantong, and that it would be the largest in China. Operations at the facility will commence in 2009. Projected project cost is $118.5 million.
Research News:
In Washington, the principal deputy assistant secretary at the US Energy Department’s Office of Policy and International Affairs, told the Reuters Global Agriculture and Biofuels Summit that the US is on track to make 22 million gallons of cellulosic ethanol by 2022. The output is mandated under the Energy Independence and Security Act signed last month by President Bush. The Department of Energy will shortly award as much $200 million to fund pilot-scale cellulosic ethanol projects projects, adding to more than $1.1 billion in grants made in 2007.
In France, a senior official at the at the Organization for Economic Cooperation and Development said that biofuels can only be partly blamed for the recent increases in commodity prices, calling efforts to make a broader linkage “simplistic”. Loek Boonekamp told the Reuters Global Agriculture and Biofuel Summit that the rise in cereal prices would have happened even without the rise in biofuel production, and that the shortfall in global grain production was more than four times as large as the increase in biofuels-based grain demand.
Policy and Policymakers:
In England, chief executive officer of Argent Energy told the Reuters Global Agriculture and Biofuel Summit said that the EU is likely to impose an import duty on US biodiesel this year. The move comes after imports of biodiesel from the US rose to 1 million tonnes in 2007, up from 80,000 tonnes in 2006. The US subsidizes biodiesel exports by $1 per gallon, making European biodiesel uncompetitive. The European Biodiesel Board is expected to file a dumping and subsidy complaint by February with the European Commission.
Consumer and Fleet News:
In New York, the energy and environment director for General Motors told the Reuters Global Agriculture and Biofuel Summit that it hoped to help up to 10,000 US gas stations to add E85 pumps by 2011. General Motors assists stations add E85 by locating grant money for conversion and supporting conversions with direct marketing to GM’s base of flex-fuel vehicle buyers.
Ferrari said that it has developed an E85 capability for its F430 Spider, and demonstrated the car at the North American International Auto Show in Detroit. The car maker has set a goal of cutting its average emissions by 40 percent by 2012.
Financial News:
The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, jumped 2.74 percent to 128.33 as the broader markets rose more than one percent on stronger than expected earnings. For the day, declines led advances 5 to 4, but sector giant Archer Daniels Midland (ADM) rose 3.44 percent on the general market recovery as well as rising energy prices. Mid cap ethanol stocks were generally down, led by a 5.37 percent drop at VeraSun Energy (VSE), although Pacific Ethanol gained 2.31 percent to close at $7.10. Among small caps, Environmental Power (EPG) rose 10.66 percent to $5.50 while Better Biodiesel (BBDS.OB) tumbled 20 percent to end at $0.92.
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