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Better Policy for Better Fuels: The Digest’s 2018 Multi-Slide ABLC Guide to SEforAll and below50

Biofuels Digest - Sun, 12/09/2018 - 3:15pm

Sustainable Energy For All and below50 aim to promote bioenergy, especially in developing countries, and grow the demand for sustainable alternative fuels, so that bioenergy can reach its full potential.

Gerard J. Ostheimer, Global Lead for Bioenergy at SEforAll and Co-Founder of below50 gave this illuminating overview of international policy mobilization and messages at ABLC Global 2018 in San Francisco – and it’s ready for you now at The Digest online.

Norway first country to ban biofuel from palm oil

Biofuels Digest - Sun, 12/09/2018 - 2:15pm

In Norway, the Parliament voted to no longer allow biofuel from palm oil into the country in an effort to stop deforestation in Indonesia and other countries that export palm oil. The decision is set to go into force in 2020.

The recent vote came after earlier attempts at slowly phasing out palm oil, like the government’s ban on itself buying biofuel made from palm oil and voluntary measures that were implemented earlier this year. However, the new decision, which was voted on with majority government support according to the Independent, is said to be “more comprehensive as it covered the entire fuel market.”

The decision also called for the government “to formulate a comprehensive proposal for policies and taxes in the biofuels policy in order to exclude biofuels with high deforestation risk”.

“The Norwegian parliament’s decision sets an important example to other countries and demonstrates the need for a serious reform of the world’s palm oil industry,” said Nils Hermann Ranum of Rainforest Foundation Norway.

 

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Two-dimensional materials skip the energy barrier by growing one row at a time

Biofuels Digest - Sun, 12/09/2018 - 2:14pm

In Washington, a new collaborative study led by a research team at the Department of Energy’s Pacific Northwest National Laboratory and University of California, Los Angeles could provide engineers new design rules for creating microelectronics, membranes, and tissues, and open up better production methods for new materials. At the same time, the research helps uphold a scientific theory that has remained unproven for over a century.

Just as children follow a rule to line up single file after recess, some materials use an underlying rule to assemble on surfaces one row at a time, according to the study done at PNNL, the University of Washington, UCLA, and elsewhere.

Nucleation — that first formation step — is pervasive in ordered structures across nature and technology, from cloud droplets to rock candy. Yet despite some predictions made in the 1870s by the American scientist J. Willard Gibbs, researchers are still debating how this basic process happens.

The new study verifies Gibbs’ theory for materials that form row by row. The research uncovers the underlying mechanism, which fills in a fundamental knowledge gap and opens new pathways in materials science.

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Burgeoning U.S. Ethanol Exports Third Highest on Record

Biofuels Digest - Sun, 12/09/2018 - 2:11pm

In Washington, D.C., U.S. ethanol exports totaled 175.4 million gallons (mg) in October, according to government data released and analyzed by the Renewable Fuels Association (RFA). This is nearly double (up 95%) September exports and the third highest monthly total on record—only surpassed by February (218.7 mg) and March (215.1 mg) of this year. Shipments were bolstered by the strongest demand for American ethanol in six months by Brazil.

A widespread shuffling of customers occurred in October with Brazil bumping Canada to capture the position of top U.S. customer. Brazil imported 54.5 mg—up 49.1 mg and representing 31% of U.S. export sales—as the sugarcane harvest began to wind down. Canada decreased its offtake by 12%, importing 30.7 mg or 18% of U.S. ethanol shipments in October. India boosted its purchases of U.S. ethanol to a record 29.1 mg for a 17% hold on American ethanol exports. Sales to these three countries represent two-thirds of all shipments in October.

American producers shipped 91.4 mg of denatured fuel ethanol in October, a 35% increase and the highest volume on record. October exports of U.S. undenatured fuel ethanol were 79.7 mg, shooting back up after dipping to 13.4 mg in September. October sales of ethanol for non-fuel, non-beverage purposes backed off 54% from the prior month to 4.3 mg.

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UFOP says rapeseed oil remains most important biodiesel raw material in EU

Biofuels Digest - Sun, 12/09/2018 - 2:08pm

In Germany, UFOP reports that while the availability and price of vegetable and animal oils and fats play a key role in biodiesel production, rapeseed oil continues to be the most important source of raw materials for biodiesel production in the EU.

With the lower supply and the resulting increase in the price of the raw material, however, the share shrank slightly from 48% in 2016 to 44% in 2017. The growing competition of cheap raw materials from overseas combined with scarce and thus expensive rapeseed oil reduced the opportunities for domestic oilseeds. The share of biodiesel and hydrogenated vegetable oil (HVO) from Southeast Asia in EU biodiesel production (including HVO) grew to 29%. In countries such as Italy, Spain and the Netherlands, imported palm oil is the No. 1 raw material for biodiesel production, in Germany and France it is rapeseed oil. By contrast, the use of yellow grease has increased only marginally, although the policy particularly encourages its use. With the exception of Germany, biofuels from waste and residual materials will be counted twice towards national quota obligations (energetically) in order to increase the share of renewable energies in the transport sector, which is binding for all member states, to 10% by 2020.

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RFA releases updated brochure with latest flex fuel models

Biofuels Digest - Sun, 12/09/2018 - 2:06pm

In Washington, D.C., the Renewable Fuels Association updated its annual flex fuel vehicles brochure to help consumers find out if their vehicle can run on up to 85 percent ethanol (E85). The brochure compiles the FFV models available in the current model year (MY2019), as well as previous years going back as far as MY1998. More than 24 million vehicles on U.S. roads today are flex fuel vehicles (FFV). All of the data used in the brochure was collected directly from the automakers.

“There are now approximately 4,500 retail stations throughout the country that offer E85 or other ethanol flex fuel blends, at least 500 more than last year and growing every week,” said RFA Vice President of Industry Relations Robert White. “This new brochure will help educate consumers about FFV availability, putting them in the driver’s seat when it comes to fuel choice. E85 is a cleaner, higher octane fuel and more consumers are gaining access to the fuel every year,” he added.

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Biofuel refinery opponents say state is ignoring their appeal hearing request

Biofuels Digest - Sun, 12/09/2018 - 2:05pm

In Delaware, the Delaware Audubon and the League of Women Voters of Delaware who won a ruling in January to keep their appeal in a lawsuit against Delaware City Refinery’s plan to expand its ethanol biofuel operation, said the state has not yet scheduled a hearing for their appeal.

“We still don’t have a resolution nearly a year after winning our case,” Ken Kristl, an attorney who represents the civic groups told Delaware Online. “State boards have a mandate and a legal responsibility to carry out their duty and that’s what we’re asking the court to make sure happens in this case.”

Richard Legatski, chairman of the Coastal Zone Board, told Delaware Online that scheduling a meeting has been “logistically difficult. It’s very hard to get a loosely organized nine-member board to get a quorum together. I have not seen the complaint but the Attorney General’s Office is in the process of contacting all nine members now to get some dates together.”

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Queensland becomes first government in the world to sign below50 agreement

Biofuels Digest - Sun, 12/09/2018 - 2:03pm

In Australia, the Queensland Renewable Fuels Association (QRFA) and the World Business Council on Sustainable Development (WBCSD) welcomed the Queensland Government’s signing of the below50 campaign at Parliament House in Brisbane. The Queensland Government were the first jurisdiction in the World to sign on to the low-carbon emissions initiative, highlighting their commitment to a more sustainable fuel industry for the State.

below50 is a global campaign of WBCSD promoting the production and implementation of fuels which produce 50% less CO2 emissions compared to traditional fossil fuels.

Coupled with the biofuel mandate, the move further promotes the State’s biofuels industry, looking to capitalize on a gap in the Asia-Pacific to make Queensland a regional biofuels hub.

As the regional hub host of below50 Australia, QRFA have been driving a low-carbon fuel economy and promoting further uptake of sustainable fuels for the State and Australia.

QRFA Managing Director Larissa Rose, said, “Queensland is in prime position to become a world leader in renewable and biofuels, with its large agriculture sector, its proximity to Asia, and possessing State Government backing.”

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Biofuel opportunities could abound with Maersk’s net zero CO2 target

Biofuels Digest - Sun, 12/09/2018 - 2:01pm

In Denmark, Maersk aims at having carbon neutral vessels commercially viable by 2030, net zero CO2 emissions by 2050, and calls for strong industry involvement.

Maersk said in their press release, “an acceleration in new innovations and adaption of new technology is required. Climate is one of the most important issues in the world, and carrying around 80% of global trade, the shipping industry is vital to finding solutions. By now, Maersk´s relative CO2 emissions have been reduced by 46% (baseline 2007), approx. 9% more than the industry average.”

“The only possible way to achieve the so-much-needed decarbonisation in our industry is by fully transforming to new carbon neutral fuels and supply chains,” says Søren Toft, Chief Operating Officer at A.P. Moller – Maersk.

“The next 5-10 years are going to be crucial. We will invest significant resources for innovation and fleet technology to improve the technical and financial viability of decarbonised solutions. Over the last four years, we have invested around USD 1bn and engaged 50+ engineers each year in developing and deploying energy efficient solutions. Going forward we cannot do this alone” adds Søren Toft.

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COP24 brings new bioeconomy strategy from UK, $200B from World Bank and more

Biofuels Digest - Sun, 12/09/2018 - 1:56pm

Amid rumors of President Trump’s coal and fossil-fuel side event at COP24 (the 24th Conference of the Parties to the United Nations Framework Convention on Climate Change) in Poland this week and a Swedish 15 year old climate activist who tells it like it is, all hope for biofuels and bioenergy is not lost with several positive announcements coming out of the meetings. The United Kingdom and World Bank in particular have some exciting news.

But first, why is it such a big meeting anyway? It marks the third anniversary since the Paris Agreement was reached in 2015 at COP21, which means it is the deadline agreed to by signatories to adopt a “work program for the implementation” or rulebook of what they promised to do back in 2015.

What is a bioeconomy?

Back to the big announcements…First, the UK defined what a bioeconomy is, which is in and of itself a challenge, and said, “The bioeconomy represents the economic potential of harnessing the power of bioscience, using renewable biological resources to replace fossil resources in innovative products, processes and services. This means that quantifying precisely the size and contribution the bioeconomy makes to the UK economy, both in terms of its direct and indirect impacts, involves a degree of uncertainty.”

Ok, we don’t like uncertainty, but here is something certain. Overall, their reports estimate the impact of activities in the bioeconomy at around £220 billion (about $280 billion). Pretty impressive numbers but what does that really mean?

Avail yourself of the opportunities

It means that “If the UK is able to seize the opportunities available, and overcome barriers that have limited the commercialisation of successful research in the past, then this should have a direct impact on UK exports of bioeconomy goods and services, and make the UK a more attractive place for overseas investment in bio-resources. In turn, these should have a positive impact in terms of improving the productivity of the UK economy, and increasing prosperity.”

More prosperity for the UK means more prosperity for others too, like Virgin Atlantic and Illinois-based LanzaTech and their carbon utilization technology. Virgin Atlantic’s Emma Harvey told The Digest, “We hope that the UK’s new bioeconomy strategy launched last week could be just the vehicle to help us secure the world’s first, full-scale jet fuel plant using LanzaTech’s groundbreaking carbon and utilisation (CCU) technology right here in the UK.”

According to the UK government’s analysis:

  • The global biorefineries market is set to grow from around £350bn (about $445 billion) to £550bn (a whooping $700 billion) by 2021.
  • The annual turnover of the UK industrial biotechnology and bioenergy sectors was £2.9bn ($3.6 billion) in 2013/14 and was forecast to increase to £8.6bn (nearly $11 billion) by 2035.
  • The global market for bioplastics is expected to grow from £13bn (over $16 billion) in 2017 to over £33bn (about $42 billion) by 2022.
  • The global market for agricultural biotechnology is set to grow from £22bn (about $28 billion) in 2016 to £40bn (nearly $51 billion) by 2022.

The Bioeconomy Strategy outlines why, left to its own devices, the market may not direct the optimal level of resources into the bioeconomy. Thus, the government’s role will be to help deliver what they call “Clean Growth Strategy.” They plan on doing this by helping with coordination failures – in other words, government coming in and helping bring diverse actors together to facilitate more effective outcomes and help balance the benefits of intellectual property protection.

One case study they refer to as how the bioeconomy can help solve our challenges is Advanced Plasma Power’s gasification technology. Their £27m (about $34 million) facility, which is close to completion, will convert 10,000 tons of household waste per annum into 1,500 tons of renewable transport fuel. The world-first plant was made possible by an £11m (about $14 million) grant from the Department for Transport’s Advanced Biofuel Demonstration Competition.

Follow the money and make a difference

Everything costs money, as is quite apparent during the holiday season especially as you look for special gifts for special people, and the World Bank made a major announcement at COP24 that they will invest $200 billion over five years for countries to take climate action to meet their 2021-2025 climate targets. This is double their current five-year investments.

“Climate change is an existential threat to the world’s poorest and most vulnerable. These new targets demonstrate how seriously we are taking this issue, investing and mobilizing $200 billion over five years to combat climate change,” World Bank Group President, Jim Yong Kim said. “We are pushing ourselves to do more and to go faster on climate and we call on the global community to do the same. This is about putting countries and communities in charge of building a safer, more climate-resilient future.”

The $200 billion across the Group is made up of approximately $100 billion in direct finance from the World Bank (IBRD/IDA), and approximately $100 billion of combined direct finance from the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) and private capital mobilized by the World Bank Group.

A key priority is boosting support for climate adaptation, recognizing that millions of people across the world are already facing the severe consequences of more extreme weather events, according to their press release. By ramping up direct adaptation finance to reach around $50 billion over FY21-25, the World Bank will, for the first time, give this equal emphasis alongside investments that reduce emissions.

“People are losing their lives and livelihoods because of the disastrous effects of climate change. We must fight the causes, but also adapt to the consequences that are often most dramatic for the world’s poorest people,” said World Bank Chief Executive Officer, Kristalina Georgieva. “This is why we at the World Bank commit to step up climate finance to $100 billion, half of which will go to build better adapted homes, schools and infrastructure, and invest in climate smart agriculture, sustainable water management and responsive social safety nets.”

There are literally trillions of dollars of opportunities for the private sector to invest in projects that will help save the planet,” said IFC CEO Philippe Le Houérou. “Our job is to go out and proactively find those opportunities, use our de-risking tools, and crowd in private sector investment. We will do much more in helping finance renewable energy, green buildings, climate-smart agribusiness, urban transportation, water, and urban waste management.”

This is huge for the bioeconomy which is ripe for the picking in helping the World Bank achieve targets.

Bottom Line

While the UK announced a concrete plan and the World Bank committed some cash, there is promise from Canada and other countries as well. Private sector announcements show promise too, like Sweden-based NextFuel unveiling what they call the world’s first carbon negative fuel, made from elephant grass, at COP24. The conference began December 2 and runs until December 14 so we expect more announcements and news to be coming out of the talks. It’s no accident that the event was hosted in a coal region, but that doesn’t stop us from being hopeful about the future of biofuels and biomaterials. There is commitment, money, and innovation to move it forward.

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Iowa: Cultivating Growth in Bioprocessing

Biofuels Digest - Fri, 12/07/2018 - 8:50am

By Debi Durham, Director, Iowa Economic Development Authority
Special to The Digest

For all the things people immediately associate with Iowans (which generally includes cornfields), being boastful isn’t on the list. Though we’re very proud of all our state has to offer, we prefer letting our hard work and knack for problem solving speak for themselves. That said, I’m thankful for this opportunity to share a bit more with the world about our state’s efforts in the biosciences arena, and how we’re handling some of the inherent opportunities and challenges that come with the territory.

State of the Bio-Economy

First and foremost, I’m happy to report that the nation’s bio-economy is as strong as it has ever been. Nearly $4 billion dollars was infused into capital investments in the U.S. for renewable and bioscience projects in 2018. This significant investment is merely part of an upward trend that’s yielded more than 273,000 new jobs at bioscience companies across the country since 2001. According to a survey conducted by Biofuels Digest, half of U.S. bioscience companies plan to expand operations within the next year.

Despite the industry’s positive prognosis, the path forward presents a few roadblocks. Logistical, regulatory and economic challenges can stifle growth and suppress innovation. In fact, the aforementioned survey revealed that support from state leadership, suitable locations and the availability of a skilled workforce are among the primary concerns for bioscience industry leaders. These findings echo the sentiments I’ve heard in one-on-one conversations, and raise the question of how deep of an impact these roadblocks have had on the progress of the industry.

Our Keys to Facilitating Growth

Though there’s no single solution that will conquer all these challenges, Iowa is uniquely poised to meet each head-on by offering:

• A business-friendly and research-driven environment. With an eye to achieving measurable growth and solidifying Iowa as a hub for innovation, our state leaders understand the importance of fostering a business-friendly regulatory environment. Iowa’s Renewable Chemical Production Tax Credit incentivizes production of biochemicals from biomass feedstocks by offering up to $1 million dollars annually in tax benefits for companies interested in producing renewable chemicals in Iowa. 

Furthermore, process improvements — including revamped applications, new business assistance tools and streamlined permit options — have led to a 56 percent reduction in the time it takes for the state to issue air construction permits. These policies and procedures allow Iowa to put businesses in a position to achieve and sustain growth, while keeping environmental and sustainability considerations at the forefront of all decisions. 

Iowa’s research universities conducted $512 million in biosciences research and development in 2016 alone. . And, since Iowa is intimately familiar with the full supply chain — from raw ingredients to finished goods and their byproducts — we’re a place where companies can manage their process from ideation to production.

• A skilled workforce. When my career in economic development began, the availability of a skilled workforce rarely charted as a top consideration for site selectors. Today, it’s critical. Toward that end, public and private entities throughout the state — including job-readiness programs like Future Ready Iowa — have invested in offering apprenticeships, internships and other professional development opportunities to our labor force to close the skills gap. Iowa’s registered apprenticeship programs have grown nearly 70 percent since 2011, and more than 130 companies were awarded nearly $2 million dollars to hire qualified interns in 2018. Beyond the boom these opportunities provide for the state, they’re equally as beneficial for the women and men who work and live here in Iowa.

• “Location, location, location.” The age-old adage still holds true, especially for bioscience companies on the move. Finding appropriate development sites, especially on a tight timeline, is a common challenge for developers and the driving need behind Iowa’s Certified Site program. 

Created in partnership with a third party, the program streamlines the site selection process and offers interested developers multiple categories to fit their needs, including green business parks, industrial sites and mega sites (1,000 acres or more). All sites meet foundational development criteria (including secure land and transportation/utility infrastructure), but green sites can help meet corporate sustainability goals — a crucial need for the continued viability of the biosciences.

Agriculture is in our DNA — it always has been and always will be. And as the world of agriculture evolves and intertwines with the biosciences, Iowa remains deeply committed at all levels to growing the industry in our state and cultivating an environment primed for supporting and driving the nation’s growing bio-economy.

Simply put, it’s an exciting time for bioscience in Iowa. In fact, next year, Des Moines will host the 2019 BIO World Congress on Industrial Biotechnology — the first time this event has been held outside of the coasts or Canada! While some were a bit surprised that Des Moines was selected as the host city, we think attendees will be pleasantly surprised to learn we’re much more than cornfields and midwestern values. The future of bioprocessing has a home here in Iowa, and we welcome anyone who would love to grow with us.

Debi Durham is the director of the Iowa Economic Development Authority. She was appointed to lead the agency by Governor Terry Branstad in January 2011. Previously, she was the president of the Siouxland Chamber of Commerce and the Siouxland Initiative.

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Harvestone Group takes over marketing of ethanol from four producers

Biofuels Digest - Thu, 12/06/2018 - 5:38pm

In Tennessee, Harvestone Group LLC announced the commencement of its first four ethanol production facilities making the transition to its marketing, logistics and trading platform. Iroquois Bio-Energy, Siouxland Energy, Red River Energy and Quad County Corn Processors combine for over 210 million gallons of annualized ethanol production.

These facilities will be exclusively marketed through the Harvestone platform under five-year agreements and represent a significant milestone for the company. Harvestone continues building on a solid foundation and unique business model; paving the way for future growth with continued plant transitions and expansion throughout the supply chain.

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Gevo and Renmatrix team on developing commercial renewable jet fuel

Biofuels Digest - Thu, 12/06/2018 - 5:35pm

In Colorado, Gevo and Renmatix announced a joint development agreement to evaluate the commercial feasibility of creating renewable jet fuel by integrating Renmatix’s Plantrose® Process with Gevo’s GIFTTM technology and alcohol to jet process. Renmatix’s Plantrose Process converts cellulosic feedstocks such as wood, agricultural residues, or other cellulosic raw materials to cellulosic-based sugars, the basic building blocks of sustainable fuels. Together, Renmatix and Gevo will explore project opportunities for renewable and low-emission fuel, isobutanol, jet fuel and isooctane in markets where there is a convergence of low-cost biomass and low-carbon fuel incentives.

This Agreement to evaluate the commercial feasibility of developing renewable, low-carbon fuels from cellulosic material also comes at a time when global refiners and airline carriers are working toward reducing their own greenhouse gas emissions by looking to enter into affordable and large-scale agreements for the supply of renewable jet fuel and gasoline.

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Former INEOS Bio Energy 8± MMGY cellulosic ethanol and biomass plants up for auction

Biofuels Digest - Thu, 12/06/2018 - 5:34pm

In Florida, the former INEOS Bio Energy 8± MMGY Cellulosic Ethanol Plant and 6± MW Biomass Plant are going to Auction with Maas Companies. Maas Companies specializes in the sale of specialized and renewable assets for private companies, courts and lenders nationwide. The surplus land and equipment are being offered first via a sealed bid auction process ending on Tuesday, January 8, 2019. If the equipment is not sold as an entirety with the real estate, the equipment will then sell piecemeal via a timed online auction ending on January 15, 2019.

Built in 2011 at a cost of $230 million, the plant was a joint venture between Ineos Group LTD and New Planet Energy LLC. This first of its kind demonstration plant was designed to use an integreated biomass gasification and gas fermentation technology to convert cellulosic yard and vegetable waste into ethanol. The plant also has installed the capacity to generate 6 MW of on-site power., and has a grid interconnection in place with all the required equipment and controls necessary for the import and export 12 MW of power to/from the site to the grid.

The plant is adjacent to the Indian River County Solid Waste Disposal LandFill with an existing gas line in place enabling the use of the landfill waste gases on the site.    The plant’s main site has city water/sewage infrastructure, in addition to 5 water wells and the 4th largest injection well in the state of Florida. The plant also owns an additional 74.5 acre tract of land to the south of the main site, with liquid piping connections in place.

Frankens Energy purchased the property earlier this year and has begun deploying its plans to convert the site into an industrial eco-district, the first of its kind on the eastern seaboard. Once complete, the Indian River Eco-District (http://www.irecodistrict.com) will support and nurture an innovative eco-system of industrial businesses, while fostering sustainable competitive advantages, growth and success of each of its members. The Eco-District’s goal is: ‘harmoniously integrating a series of businesses, all focused on nurturing and supporting environmental sustainability, employment and education within the local community; every aspect of this project is rolled out with community stewardship in mind.’

The auction is selling surplus assets –land, equipment and infrastructure that do not contribute to the business plans of the Indian River Eco-District. The surplus land and equipment are being offered first via a sealed bid auction process ending on Tuesday, January 8, 2019. If the equipment is not sold as an entirety with the real estate, the equipment will then sell piecemeal via a timed online auction ending on January 15, 2019.

Bidders interested in the plant should contact the auction company to receive access to all the due diligence documents prior to submitting a sealed bid.

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SAFCell completes eight-month field trial of remote power system fueled by methanol

Biofuels Digest - Thu, 12/06/2018 - 5:33pm

In California, SAFCell, Inc. has completed an eight-month field trial of their remote power system at a Shell Canada well site in Rocky Mountain House, Alberta. SAFCell’s system, which runs on industrial methanol, powered a methane emissions sensor from late February until mid-October, thereby demonstrating operability in the field at both low and high ambient temperatures.

SAFCell is working with the U.S. Army, oil and gas companies, and power system manufacturers to commercialize Solid Acid Fuel Cell systems. These quiet, clean systems operate on existing commercially available fuels, including (bio) methanol, ethanol, propane, (bio) diesel and natural gas. SAFCell power systems are more fuel-efficient, more-scalable, and have a lower total cost of ownership than incumbent, low-efficiency thermoelectric generators and competing high cost fuel cell products. SAFCell’s systems are built using an innovative solid acid cell design which allows fuel flexibility and reduced costs.

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Gujarat chief minister launches UCO collection app

Biofuels Digest - Thu, 12/06/2018 - 5:32pm

In India, Gujarat Chief Minister Vijaybhai Rupani expressed determination to reduce the country’s crude oil bill by generating cheaper biodiesel from used cooking oil. Rupani stated that the RUCO (Reused of Cooking Oil Software Biodiesel Association of India) is collecting the used cooking oil from the traders to generate biodiesel from it. At the initial stage, the used cooking oil will be collected by a mobile van.

On the occasion, RUCO and FDCA had signed a MoU in the presence of Rupani. The Chief Minister had also launched an application of RUCO, which on very first day had attracted requests to collect 47,146 liters of used cooking oil from the oil traders.

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Brazilian ethanol prices seen rising in December

Biofuels Digest - Thu, 12/06/2018 - 5:31pm

In Brazil, Reuters reports that ethanol prices are likely to jump in December as demand for the fuel increases while stronger ICE Brent Crude futures and NYMEX RBOB futures further support them. Already ethanol prices have increased more than 4% during the first week of December and prices will likely go higher as the holiday period later in the month complicates buying and logistics. With Petrobras seeking to keep domestic fuel prices in line with international levels, even with higher ethanol prices, demand will continue as fossil fuel prices are adjusted higher looking forward.

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Chinese researchers develop novel catalytic method to processfeedstock for biofuels

Biofuels Digest - Thu, 12/06/2018 - 5:30pm

In China, researchers from the Dalian Institute of Chemical Physics (DICP) of the Chinese Academy of Sciences and colleagues from Peking University recently reported an efficient and novel catalytic method for the conversion of aqueous biomass fermentation broth to a water-immiscible product. Their finding was published in Nature Communications.

They developed a strategy capable of transforming ~70 percent of carbon in an aqueous ABE fermentation mixture to 4-heptanone (4-HPO), catalyzed by tin-doped ceria (Sn-ceria) with a selectivity as high as 86 percent. While Sn-ceria is a versatile catalyst for dehydrogenation, the Guerbet alcohol reaction, condensation, and esterification reactions, all these reactions, involving acid-base catalysis and redox ones, relay and generate 4-HPO with high selectivity. 4-HPO is a value-added intermediate and can be used to produce jet fuel and fine chemicals.

Furthermore, water, which is detrimental to the reported catalysts for ABE conversion, was beneficial for producing 4-HPO. The excellent catalytic performance of tin-doped ceria is due to the highly dispersed tin species and oxygen vacancies of ceria.

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Bloomberg heads to Iowa to promote biofuels ahead of potential presidential bid

Biofuels Digest - Thu, 12/06/2018 - 5:28pm

In Iowa, the New York Post reports that the former New York City mayor Michael Bloomberg was touring the state as part of a potential plan to launch a presidential bid as a Democrat. Bloomberg had previously criticized the use of corn for ethanol as bad energy policy but has since changed his tune, saying that there is a role for both biodiesel and corn-based ethanol, the latter of which he said was carbon neutral. He emphasized the need for policy to be science-driven rather than reject science as has been the trend in the current White House.

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C.J.’s back and REGI’s got her: Warner tapped as new Renewable Energy Group CEO

Biofuels Digest - Thu, 12/06/2018 - 1:06pm

In Iowa, white smoke has emerged from the REGI conclave: Tesoro EVP and former Sapphire Energy CEO C.J. Warner has been named chief exec of Renewable Energy Group, at a pivotal moment for biodiesel in Washington and around the world and amidst a boom for renewable diesel like the world has never seen.

REG has been making good progress with Wall Street under interim CEO Randy Howard and its share price has been on the rise, and the plants have been humming along nicely churning out hundreds of millions of gallons of biodiesel and the liquid gold also known as CARB diesel (or renewable diesel qualified for the low-carbon markets in California, Oregon and British Columbia). All that, built on an incredible run from single-plant operator to biodiesel behemoth under, first, Jeff Stroburg and then Dan Oh,

Now, the next chapter begins to unfold.

Here’s the REGI challenge

It’s a brilliantly operated company that generated some $220 million in net income last year. Yet, the company has a P/E ratio of around 4.4 compared to the NASDAQ average that hovers around 25. If the company were valued along with its NASDAQ peers, it would have a $5B market cap and could be using its stock to roll up a huge amount of production capacity through M&A. And there’s not an REGI investor who wouldn’t like to see a juicy $130 stock price.

The few cases in history where you get these kind of market disconnects are when the balance sheet is a toxic waste dump, the products are shortly destined for the scrap-heap of history or there’s a huge potential lawsuit liability. None of those apply in this case. So, there’s been major progress, but there’s huge upside. And, so long as the company remains this undervalued, it makes REG a ripe target for acquisition, raiders, privatization efforts, or activist shareholders. 

What’s going to happen to REG? Let’s look at the two fundamentals that restless investors are pointing us too: feedstock cost and the dependence on tax credits and RINs to generate value.

The world of REG’s prices and values

Here’s a graphic from Iowa’s Center for Agricultural (CARD) to illustrate biodiesel’s fundamentals.

The red marks the operating margins and the green represents feedstock costs — the one, minuscule, the other daunting. What need to be done to unlock REG’s value? It really comes down to restructuring REG’s income stream. Investors see the company as entirely too dependent on those tax credits and RINs.

There’s come evidence for their fear. Congress only passed the 2017 tax credit in early 2018, did not renew the credit for 2018 at all, as of yet, and the 2015-16 credits came in well into 2015. Only one year, 2016, has REG entered into a new year with a tax credit assured.  The Brady bill dropped into Congress last week with a thud, offering a 7-year tax credit extension but discounting and sunsetting the credit in the mid 2020s.

And, in case you were still feeling swimmingly happy about your REG share price outlook, the Trump Administration’s negotiations with the renewable fuel industry on sweeteners and support have mostly focused on year-round availability for E15 ethanol and not on expanding the market for biodiesel, much. The current EPA mandate for 2019 is way below the industry’s production capacity.  Which means that biodiesel gets hit on the nose by the way EPA runs the RFS program, but the relief efforts generally target ethanol, instead of America’s favorite advanced biofuel. Here’s some color on RIN values (with biomass-based diesel in blue):

That’s hardly grist for shareholder enthusiasm and its tough on REG-s long-term investments planning, too. Can’t be positive for company morale, either.

Solving the problem

Warner, as the incoming CEO, will have several options. One, more of the same, hammer on Washington to extend tax credits and protect RIN values. Two, acquire or build production capacity in renewable diesel to take advantage of the sweet margins for that fuel, taking advantage of REG’s strong position in fats, oils and greases (FOG) acquisition. Three, transform feedstock costs by tapping into wood residues and MSW to make biocrude that can be upgraded to renewable diesel. Four, find a way to privatize the risk that flows from government hemming-and-hawing over tax credits, taking REGI out of the firing line when tax credits do not appear. Five, deliver on the promise of REG Life Sciences with a product line or two that generates the kind of company-altering cash flow that’s been helping the likes of Amyris of late. There may be others in the REG option quiver, but you get the general idea. 

The Warner / REGI backstory

Warner arrives on January 14, 2019. She brings more than 35 years of experience in the energy industry, including an extensive background in refining. Most recently she served as Executive Vice President, Operations for Andeavor (formerly Tesoro Corporation), an integrated marketing, logistics and refining company. Prior to her most recent role, Ms. Warner served as Executive Vice President, Strategy and Business Development of Andeavor.  Before joining Andeavor, Ms. Warner served as President, Chief Executive Officer, and Chairman of the Board of Sapphire Energy, a biofuels company. Prior to Sapphire Energy, Ms. Warner served as Group Vice President of Global Refining and Group Vice President of Health, Safety, Security, Environmental and Technology for BP (British Petroleum). Ms. Warner serves as a member of the Board of Directors for IDEX Corporation and serves as a member of the National Petroleum Council.

“After completing a thorough and deliberate succession planning process, we are pleased to welcome CJ Warner as our new President and CEO,” said Jeff Stroburg, Chairman of the REG Board of Directors. “Her background and success, coupled with her passion for developing renewable fuels that transform the transportation fuels market to a cleaner and sustainable future, makes her an exceptional choice to lead REG.”

“I am delighted and honored to be joining the REG team as President and CEO,” said Warner. “This growing company is well positioned to meet the rising global demand for cleaner, competitive low carbon fuel solutions.  I look forward to the exciting future ahead and to leading the team with a continued focus on value creation.”

During the leadership transition Randy Howard will remain engaged with the business.  Upon completion of the transition, Randy will continue to serve on the REG Board of Directors, a position he has held since February 2007.

The Bottom Line

Natives are restless, which is to say shareholders. Being an incredibly well-operated company in a fast-growing space is not as attractive to them as it should be, but it’s tough to fire investors. And the company is operating too strongly to hope that anyone can work a miracle from the inside by simply boosting productivity.  There’s not much upside left in performance, but there’s upside in REG Life Sciences, feedstock and restructuring policy risk. None of which is easy to do — but anyone who’s been around CJ as part of the “Beyond Petroleum” generation that advanced at BP under Lord Brown, or her subsequent years bringing Sapphire Energy from a great idea to an at-scale reality, or her work taking Tesoro (or Andeavor, take your pick) into the world if renewable with relationships with Fulcrum, Ensyn and the acquisition of Virent, will be of great cheer. She’s a winner.

And, we might see in her strategic work at Tesoro that renewable diesel might well be the most potent option in front of REG to boost margins, add capacity and dominate the California market where policy risk is lower. The key ultimately is feedstock. The world is reaching Peak FPOG far faster than Peak Oil.

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