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Maha only able to supply 30 million liters of ethanol due to poor cane crush

Biofuels Digest - Wed, 06/14/2017 - 5:57pm

In India, Maharashtra was only able to supply 30 million liters of ethanol during 2016/17 compared to 380 million liters the year prior due to the poor crush. With molasses prices nearly double compared to last year and lower prices, ethanol production wasn’t economically viable. But even with the poor economic environment for ethanol, Maharashtra mills still offered 72.7 million liters during the tenders floated by the oil marketing companies. In total, OMCs managed to blend 4.15% during 2016/17.

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Imports likely needed as Vietnam’s ethanol sector won’t be ready for E5 by year’s end

Biofuels Digest - Wed, 06/14/2017 - 5:56pm

In Vietnam, after several years of siting idle, the country’s three ethanol plants may not be back online in time to produce the ethanol required for the E5 blending mandate set to finally come online December 31. As a result, imports may be required during the short-term to compensate for the lack of domestic availability until the facilities are re-commissioned. Though the government is phasing out RON 92, leaving just RON 95 and E5 on the market, one oil major expects about half of consumers to switch to E5.

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Long Island kelp feasibility study project harvests first crop

Biofuels Digest - Wed, 06/14/2017 - 5:55pm

In New York state, the first sugar kelp grown as part of a Cornell extension service research project in the Peconic Estuary was harvested last week as part of a Suffolk County-funded feasibility study to determine if Long Island could develop a viable kelp industry. The estuary suffers from high levels of nitrogen, which is ideal for growing some kelp species, so could be a win-win for the area. The cold-water species is usually planted in November and harvested in May but weather delayed that process until December last year.

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Helsinki airport to be carbon neutral by year’s end thanks to biofuels and renewables mix

Biofuels Digest - Wed, 06/14/2017 - 5:49pm

In Finland, thanks to using biofuel in all ground vehicles and a new 500kWp solar array, Finavia expects the Helsinki airport to achieve carbon neutrality by the end of this year, ahead of its 2020 goals. It plans to extend the same model to all of its 21 airports as part of its commitment towards achieving 100 carbon neutral airports in Europe by 2030. Bioenergy, geothermal, wind power and LED lights will also be included in the energy transition towards carbon neutrality.

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University of Bath researchers develop plastics from sugar and CO2

Biofuels Digest - Wed, 06/14/2017 - 5:48pm

In the UK, some biodegradable plastics could in the future be made using sugar and carbon dioxide, replacing unsustainable plastics made from crude oil, following research by scientists from the Centre for Sustainable Chemical Technologies (CSCT) at the University of Bath.

  • • Polycarbonate is used to make drinks bottles, lenses for glasses and in scratch-resistant coatings for phones, CDs and DVDs
  • • Current manufacture processes for polycarbonate use BPA (banned from use in baby bottles) and highly toxic phosgene, used as a chemical weapon in World War One
  • • Bath scientists have made alternative polycarbonates from sugars and carbon dioxide in a new process that also uses low pressures and room temperature, making it cheaper and safer to produce
  • • This new type of polycarbonate can be biodegraded back into carbon dioxide and sugar using enzymes from soil bacteria
  • • This new plastic is bio-compatible so could in the future be used for medical implants or as scaffolds for growing replacement organs for transplant
  • • Polycarbonates from sugars offer a more sustainable alternative to traditional polycarbonate from BPA, however the process uses a highly toxic chemical called phosgene. Now scientists at Bath have developed a much safer, even more sustainable alternative which adds carbon dioxide to the sugar at low pressures and at room temperature.

The resulting plastic has similar physical properties to those derived from petrochemicals, being strong, transparent and scratch-resistant. The crucial difference is that they can be degraded back into carbon dioxide and sugar using the enzymes found in soil bacteria.

The new BPA-free plastic could potentially replace current polycarbonates in items such as baby bottles and food containers, and since the plastic is bio-compatible, it could also be used for medical implants or as scaffolds for growing tissues or organs for transplant.

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Norway’s Parliament votes to end palm oil-biodiesel sales, consumption and procurement

Biofuels Digest - Wed, 06/14/2017 - 5:46pm

In Norway, the Parliament approved a list of biofuel-related policies from asking the government to ban the use and public procurement of palm oil-based biodiesel to implementing the European Union’s sustainability criteria for biofuels. What’s more, it called on the fuel retail industry to join together in order to not use palm oil-based biodiesel and to supply biofuels that exceed the EU’s minimum greenhouse gas emissions reduction targets. It also wants an end to all palm oil-based biodiesel to be banned from domestic sales.

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Market access: Industry grips with E15’s future in key Senate hearing

Biofuels Digest - Wed, 06/14/2017 - 4:16pm

In Washington, hearings took place today on the future of E15 ethanol in the United States Senate Environment and Public Works Committee on S. 517, the Consumer and Fuel Retailer Choice Act.  S. 517 was introduced in March and has 18 bipartisan sponsors, including Sens. Deb Fischer (R-NE), Joe Donnelly (D-IN), and Chuck Grassley (R-IA).

The issue

The regulation in question governs Reid Vapor Pressure (RVP), a measure of evaporative emissions in fuel.

Gasoline evaporation contributes to ozone formation. Under current law, evaporative emissions from gasoline are limited during summer months, from June 1 through mid-September to prevent ozone formation. In primarily large, urban areas that are not in attainment of National Ambient Air Quality Standards (NAAQS) evaporative emissions and gasoline are even more strictly regulated.

In 1990, Congress limited the amount of evaporative emissions from vehicle fuel at 9 pounds per square inch (psi) RVP. Pure ethanol has a 3 psi RVP, only when combined with gasoline at low levels, does the RVP of ethanol blended fuel exceed 9 psi. Despite E15 having a lower RVP profile than E10, E10 has been granted an one pound per square inch (psi) RVP waiver, while E15 has not received the same treatment.

Consequently, access to E15 is severely limited in many regions of the U.S., especially during the summer driving season, creating confusion for consumers and discouraging many retailers from offering E15 altogether.

Iowa RFA members described it in a letter to Senator Joni Erntz of Iowa as “common-sense legislation”, “E15 is a safe, clean and low-cost fuel which can be used in 9 out of every 10 cars on the road today. But due to a burdensome regulation this fuel is blocked from being sold in from June 1 through September 15 each year in most of the country.”

E15 deployment would expand the US market on the galoline replacement side to as much as 21 billion gallons.

The Rationale

It’s a year for regulatory relief, and this is the relief issue on the industry agenda with the broadest support from producers, growers, and policymakers. And farmers are looking for support at a time when net farm income has dropped 50 percent over four years.

The Fear?

Michief-making. The bill opens the way to a host of Senate amendments aimed at limiting the RFS itself.

The IRFA said:

Because S. 517 amends the Clean Air Act, we are concerned this narrow RVP correction may draw amendments on a variety of other issues. S. 517 should be considered separate from other issues in order to maintain its narrow purpose and keep the focus on the technical fix under consideration.

The positioning

According to the Iow Corn Growers Association:

Fuel retailers want to offer American drivers another choice at the pump that can save motorists money, increase vehicle performance, help improve their business and improve the environment. For corn farmers, who currently sell one-third of their crop for renewable fuel production, removing a barrier that discourages many retailers from selling E15 is a no-cost means to increase grain demand that provides significant benefits to consumers as well. 

According to ICGA, using E15 nationwide would reduce transportation-related greenhouse gas emissions by 39.5 million tons, the equivalent of removing 6.3 million vehicles from American roadways.

According to the Biotechnology Innovation Organization, during the summer months alone E15 can reduce greenhouse gas emissions equivalent to taking 2.1 million vehicles off the road.

The Advanced Biofuels Association breaks from the pack

Mike McAdams, president of the Advanced Biofuels Association (representing producers of 3 billion gallons of biodiesel and renewable diesel capacity) expressed “deep concern that S. 517, the Consumer and Fuel Retailer Choice Act, will be detrimental to the future of advanced biofuels in the U.S. We believe the future of renewable fuels in the U.S. hinges on the advanced and cellulosic industries, both of which desperately need comprehensive reform of the Renewable Fuels Standard (RFS) to survive. Rather than focusing on this stop-gap waiver for E15, we encourage you to dedicate your time and resources to broader RFS reform.”

“The waiver authorized by S. 517 would enable corn ethanol volumes to exceed the 15 billion gallon statutory mandate established by Congress in 2007. Because corn-based ethanol is the lowest-cost ethanol molecule on the market, increasing the E15 mandate simply makes it more economically challenging for cellulosic and other advanced fuels to compete, reducing the program’s ultimate sustainability and potential for GHG reductions. Rather than supporting the market, this bill would undercut its future. ABFA would support granting the RVP waiver request for advanced biobutanol and ethanol rather than ethanol writ-large.”

The hard data

BIO’s recent analysis, “GHG Benefits of the Consumer and Fuel Retailer Choice Act,” is available here.

BIO developed a baseline scenario of transportation fuel use from the U.S. Energy Information Administration’s (EIA) 2017 Annual Energy Outlook. EIA projects transportation fuel use to fall steadily between 2018 and 2027. EIA also projects ethanol use in transportation to decline, but at a slower rate than gasoline use. In EIA’s annual projections, reported gasoline use represents E10, the average fuel blend sold in the United States. The agency also expects use of E85 blends (51 to 83 percent ethanol) in flex fuel vehicles to increase, particularly after 2020.

The concern over small boat owners

The Outdoor Power Equipment Institute (OPEI), an international trade association representing more than 100 small engine, utility vehicle and outdoor power equipment manufacturers and suppliers, said “While Growth Energy and other pro-ethanol lobbying organizations have spent millions of dollars to bring higher ethanol fuel blends to the marketplace, they continue to fail to acknowledge that higher ethanol fuels may damage or destroy many engines, especially non-road engines.

Growth Energy was having none of it, releasing a new survey concluding that U.S. small engine owners “are pleased with the performance of their fuel and find it easy to pick the best option, including regular unleaded blends of 10 percent ethanol.”

“Consumers appreciate having clean, affordable options at the pump, and small engine owners are no exception,” said  “Biofuel critics like to claim that competition at the pump leads to confusion,” said Emily Skor, CEO of Growth Energy,” but they obviously haven’t checked with American consumers who report that choice at the pump and small engine performance go hand-in-hand.”

According to the survey, 95 percent of owners found it easy to pick the right fuel, 98 percent reported satisfaction with their fuel’s performance, and 90 percent considered it important to have options at the pump, including ethanol blends. The numbers were the same or even higher among only those respondents who reported using standard unleaded gasoline, which contains 10 percent ethanol.

Reactions from stakeholders

Emily Skor, CEO, Growth Energy

“E15 is increasingly popular in 29 states and counting – it has more octane, it costs less, and it’s cleaner. This bill will lift a needless burden on retailers so consumers can pick their own fuel and continue to open new market opportunities for the next generation of low-carbon, homegrown biofuels. Growth Energy is rallying all our friends in the environmental, retail, consumer, and advanced biofuel community to ensure that America’s fuel options aren’t limited by outdated regulations.”

POET-DSM Board Chairman Jeff Pinkerman

“For cellulosic biofuels to be successful, our elected leaders must remove barriers that unnecessarily restrict the availability and growth of biofuels in the marketplace,” he said. “Lifting this outdated regulation will help cultivate demand for cleaner-burning biofuels and provide a catalyst for expanded research and development of promising new clean fuel technologies.”

POET CEO Jeff Broin

“This is about giving Americans the freedom to choose fuels that can actually help clean the toxic air we breathe. We know drivers are pleased to find that E15 costs less – 5-15 cents per gallon – but when they learn E15 also substantially lowers emissions, they can be confident they’re filling up with a product that’s easier on their wallet and better for our planet.”

The Biotechnology Innovation Organization (BIO) and Advanced Biofuels Business Council

“This legislation is vital to the advanced biofuels industry, which is making significant progress in expanding production of advanced and cellulosic biofuels. Fixing the RVP issue will ensure that E15 can be sold year round in any state where E15 is approved and give our advanced and cellulosic fuels an opportunity to compete at the pump.

“Moving to E15 not only reduces the cost of gasoline by between 5 and 15 cents per gallon, but also reduces emissions harmful to the environment. Recent analysis from the Biotechnology Innovation Organization indicates that in just the summer months E15 can reduce GHGs equivalent to taking 2.1 million vehicles off the road. In addition to the environmental benefits, the Energy and Environmental Studies Institute has written that E15 can lower the public health impacts from transportation emissions like cancer and asthma.”

Brian Jennings, EVP, American Coalition for Ethanol 

“Senators Fischer (R-NE), Ernst (R-IA), and Duckworth (D-IL), all members of the EPW Committee, are providing timely leadership in making sure this priority issue gets the attention it deserves in Congress,” said   “We’re encouraged that today’s hearing can be the first step toward enactment of legislation to give retailers the choice to offer E15 and higher blends to their customers year-round.”

Bob Dinneen, CEO, Renewable Fuels Association

“The biggest remaining obstacle to E15 growth is the inequitable application of gasoline vapor pressure regulations. The U.S. Environmental Protection Agency’s current regulations have created an un-level playing field for E15 and other higher-level blends. Many gasoline retailers have rejected E15 because EPA’s current RVP regulations make it nearly impossible for them to sell E15 to EPA-approved conventional automobiles year-round. Most gas stations are not willing to dedicate storage tank space and dispensing equipment to a fuel that they can only sell for part of the year. Resolving the issue of RVP parity for E15 will remove the regulatory barrier that currently hinders stations from offering year-round access to E15 and other higher level ethanol blends.”

The Digest’s Take

OMG, opening up the Clean Air Act.

Forget fuel haters, the Senate is replete with members who have choice provisions of the CAA they would like to send to the devil. We’re prayerful that the industry will find a way to get an amendment through without presenting an opportunity for dangerous and dark forces to to dark and dangerous things.

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Jet and diesel from the sticks: The Digest’s 2017 Multi-Slide Guide to Red Rock Biofuels

Biofuels Digest - Wed, 06/14/2017 - 3:37pm

In late 2015, we reported Red Rock Biofuels will produce approximately three million gallons of low-carbon, renewable jet fuel per year (at that time, from 2017 through 2024) for FedEx Express, a subsidiary of FedEx Corp, in an agreement announced by the companies today. FedEx joined Southwest Airlines in purchasing Red Rock’s total available volume of jet fuel from its first commercial plant, which is scheduled to break ground this fall in Lakeview, Ore. and will convert approximately 140,000 dry tons of woody biomass into 15 million gallons per year of renewable jet, diesel and naphtha fuels.

Since then, we’ve been waiting for the financing to close. Good news is that  Red Rock’s first refinery is funded in part by a $70 million Title III DPA grant from the U.S. Departments of Agriculture, Energy and Navy, and the plant is expected to produce diesel to meet military market needs.

CEO Terry Kulesa gave this illuminating overview of the technology’s progress and promise at ABLC 2017.

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VTT expanding operations at it Bioruukki pilot center

Biofuels Digest - Tue, 06/13/2017 - 6:31pm

In Finland, VTT Technical Research Centre of Finland will expand the operation of the Bioruukki pilot center located in Espoo, from thermochemistry to novel ways of biomass utilization, recycling of textile fibers and green chemistry technologies. The pilot center will develop into a new kind of an ecosystem, welcoming companies and research organizations to develop their ideas towards industrial-scale production. The world markets for bioeconomy and circular economy products and technologies are in strong growth, and VTT wants to offer its partners an environment and its expertise for the development of new competitive products and processes.

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Brazilian ethanol parity now seen below 13 cents

Biofuels Digest - Tue, 06/13/2017 - 6:30pm

In Brazil, the ethanol parity level at which point mills make more money producing ethanol than sugar has fallen to below 13 cents as a result of the devaluation of the Real due to ongoing political scandals but also because of the vast investments the sugar industry has made in recent years in crystallization. Prices are still hovering near to 14 cents, so mills continue to produce sugar as demonstrated by UNICA’s most recent crush update that showed higher-than-expected production.

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Cornell researchers combine hydrothermal liquefaction with anaerobic digestion

Biofuels Digest - Tue, 06/13/2017 - 6:29pm

In New York state, researchers at Cornell are combining hydrothermal liquefaction with anaerobic digestion in order to boost the energy production while reducing the processing time for treating food waste. The FAO estimates 1.3 billion tons of food is wasted or lost every year. The hydrothermal liquefaction produces a biocrude in just a few minutes that can be refined into fuel and then the remaining aqueous byproduct from the process is used in the anaerobic digester, producing biogas in just days instead of weeks.

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Rayeman Elements teams with Saola Energy to commercialize enzymatic biodiesel technology

Biofuels Digest - Tue, 06/13/2017 - 6:28pm

In Colorado, Rayeman Elements, Inc. announced that it has diversified its business model and created a Biofuels Division to provide patented and proven technology for the production of biodiesel co-located with ethanol plants. As a part of this new endeavor, Rayeman Elements has selected top engineering firm, Saola Energy, LLC, to provide engineering and design for the biodiesel technology, giving companies interested in building a biodiesel plant their best option.

In addition to the use of this technology, Rayeman Elements’ and Saola Energy’s primary focus will be to utilize a proven enzymatic biodiesel process. These state-of-the-art facilities will include standard methanol recovery and distillation units as part of the package offering. A standard plant size offering will be a 2 million gallons per year production design. However, customized plant size designs will be accommodated per customer requests.

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Indian biodiesel pioneer files for bankruptcy with $776.6 million in debts

Biofuels Digest - Tue, 06/13/2017 - 6:26pm

In India, biodiesel producer Gujarat Oleo Chemical has filed for bankruptcy with the National Company Law Tribunal as a result of $776.6 million in debts. The company uses castor biodiesel to produce Undecylenic Acid and Heptaldehyde through a continuous cracking process. It was the country’s first biodiesel producer and has been selling biodiesel to the Indian Oil Company since at least 2004. The government only deregulated biodiesel sales so it could be sold to non-oil marketing companies last year.

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Nigerian oil trading company eyes jatropha for processing in Mississippi

Biofuels Digest - Tue, 06/13/2017 - 6:21pm

In Nigeria, oil trading company Taleveras Group has teamed up with the Global Green Development Group to establish jatropha production throughout West Africa with an eye on processing the oil at a biorefinery in Mississippi. The company is scoping out 15,000 ha in Nigeria, Ivory Coast, Ghana, South Africa and Ethiopia for the 70 million gallon per year project that is expected to cost up to $600 million. It plans for the project to be online in the next three years.

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University of Minnesota researchers patent process to produce biodiesel from scum

Biofuels Digest - Tue, 06/13/2017 - 6:19pm

In Minnesota, for University of Minnesota (UMN) researchers, scum is a word packed with profitable promise. Their patented process not only converts the scum to a higher value product (biodiesel) but also reduces environmental pollutants in both landfills and water systems. As a result, 68 percent of dried and filtered scum can be converted to biodiesel, equivalent to approximately 140,000 gallons of biodiesel and $500,000-600,000 in profit per year. Additionally, the process utilizes available waste heat from water treatment facility.

This research was funded in part by grants from the Legislative-Citizen Commission on Minnesota Resources (LCCMR), Metropolitan Council Environmental Service, MnDRIVE and CFANS Center for Biorefining.

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Advanced biofuel producers and associations write Senate committee supporting S.517

Biofuels Digest - Tue, 06/13/2017 - 6:18pm

In Washington, more than 25 advanced biofuel producers and trade associations sent a letter to members of the Senate Environment and Public Works Committee on Monday, asking them to support the Consumer and Fuel Retailer Choice Act (S.517), the Biotechnology Innovation Organization (BIO) and Advanced Biofuels Business Council (ABBC) announced.

Under current law, fuels containing 15 percent ethanol (E15) cannot be sold during the summer driving season in many states. In 1990, Congress limited the amount of evaporative emissions from vehicle fuel at 9 pounds per square inch (psi) Reid Vapor Pressure (RVP). At the time, Congress specified that fuel with 10 percent ethanol (E10) would receive a 1 psi RVP waiver, in recognition of E10‘s overall lower emissions profile. The Consumer and Fuel Retailer Choice Act will extend the RVP waiver to ethanol blends above 10 percent.

The letter states, in part:

“This legislation is vital to the advanced biofuels industry, which is making significant progress in expanding production of advanced and cellulosic biofuels. Fixing the RVP issue will ensure that E15 can be sold year round in any state where E15 is approved and give our advanced and cellulosic fuels an opportunity to compete at the pump.

“Moving to E15 not only reduces the cost of gasoline by between 5 and 15 cents per gallon, but also reduces emissions harmful to the environment. Recent analysis from the Biotechnology Innovation Organization indicates that in just the summer months E15 can reduce GHGs equivalent to taking 2.1 million vehicles off the road. In addition to the environmental benefits, the Energy and Environmental Studies Institute has written that E15 can lower the public health impacts from transportation emissions like cancer and asthma.”

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Cellulosic on the rise: The Digest’s 2017 Multi-Slide Guide to Cellerate technology

Biofuels Digest - Tue, 06/13/2017 - 4:22pm

To date, QCCP has produced more than 5 million gallons of cellulosic ethanol via the Cellerate process, which represents 90 percent of total U.S. cellulosic ethanol production (D3 RINs) in the last three years. 

Not long ago, Quad County Corn Processors (QCCP) Head Engineer Travis Brotherson reported a 26 percent increase in ethanol production after a recently-completed trial. The trial consisted of a combination of Cellerate process technology and Enogen corn. Brotherson said this dramatic increase was achieved by realizing an additional 6 percent yield per bushel from converting kernel fiber into cellulosic ethanol, plus a 20 percent throughput increase by combining Cellerate with Enogen.

CEO Dwayne Johnson gave this illuminating overview of the technology at ABLC 2017 in Washington DC.

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Don’t spill that ethanol! Those cellulosic fuels are worth $4.33 a gallon.

Biofuels Digest - Tue, 06/13/2017 - 4:13pm

The value of cellulosic fuels has reached $4.33 per gallon in the California market. That’s real-world, today, including the energy and the low-carbon attributes, and not based on speculation. The value has risen 59 cents, or 15.7 percent in the past 17 months.

The soaring fuel values are prompting at least two companies to substantively re-evaluate plans to de-emphasize, or even abandon renewable fuels as too costly to produce. Virent (now a subsidiary of Tesoro) and Velocys are two companies which have, subtly or more overtly, put fuels right back into the bullseye of their ambitions. And some highly-regarded first-gen ethanol operations, like Siouxland, are deploying Edeniq’s wonder tech to produce cellulosic ethanol from corn kernel fiber.

Over at Velocys

Confirming news arrived from Velocys this week when the company revealed the selection of IHI E&C International Corp to carry out the pre-FEED engineering for its first biomass-to-liquids plant. IHI E&C is working with Velocys and its technology partners to support the rapid deployment of the BTL plant offer to the renewable fuels sector. The engineering study will be completed in the second half of 2017.

What was most interesting was this note from Velocys:

This aligns with both Velocys’ and IHI E&C’s strategic intent to enter the US renewable transportation fuels market. 

Keep in mind that just a few years ago Velocys was one of the earlier companies to pivot towards the natural gas market — seeking the opportunities via a shift from biomass to natgas as a feedstock. The crack (or “crush”) spread in natgas had, with the plunging natural gas prices, outstripped the opportunities in biomass. But now, oil prices have plunged, fuel margins have compressed, and the importance of low-carbon fuels in the real-world, operating markets that have carbon pricing is gaining quickly.

Cellulosic ethanol’s fast-rising value

In the March Madness webinar series in 2016, noted industry consultant Michele Rubino outlined the growing real-world value of cellulosic ethanol with this illuminating chart.

That was then, this is now. That value has changed substantially. Let’s place the latest values from our friends at PFL (RIN and ethanol prices), the California Air Resources Board (LCFS credits) and the EPA (the Cellulosic Waiver Credit).

We might point out that LCFS credits are at a cyclical low — down almost 40 percent from last year’s peaks. One reason for that is that numerous renewable fuel producers are singing “California, here I come”.

Over at Siouxland Energy and Edeniq

Late last week, the U.S. Environmental Protection Agency approved Siouxland Energy’s registration of its 60 million gallon per year corn ethanol plant for generation of D3 RINs from cellulosic ethanol.

Siouxland Energy is the fourth plant to receive a cellulosic ethanol registration from the EPA after deploying Edeniq’s Pathway Technology. Edeniq’s registered customers now total 400 MGPY of nameplate ethanol capacity and are averaging 1% cellulosic ethanol.

Over the next year, Edeniq said expects to significantly increase average customer cellulosic ethanol production through ongoing technology enhancements that are being refined and introduced to customers as early as the third quarter of 2017.

That’s a good thing because Edeniq generally has guided markets in the direction of 2.5 percent yields from cellulosic ethanol.

So, think 4 million gallons today, more to come. We expect that, like corn oil, we’ll see a major shift over to cellulosic ethanol from kernel fiber. Right now, as has been typical with new equipment, the big ethanol fleets have adopted a wait and see while the smaller co-ops and single plant owners have forged ahead — for sure, when we see 2.5% cellulosic yields and payback in 203 years, the big fleets will jump in.

Based on current US capacity, that would add as much as $375 million in sector value. And, for a 100 million gallon corn ethanol reference plant, the lift right now would be up to $10 million. Which is a 10% lift compared to last year.

More on Edeniq math here.

Over at Virent

Over at Virent, we’ve seen a shift. The company’s site says very much what it always has said, “Using patented catalytic chemistry, Virent converts soluble biomass-derived sugars into products molecularly identical to those made with petroleum, including gasoline, diesel, jet fuel, and chemicals used for plastics and fibers.” And Virent is part of a strategic consortium whose members have divergent interests — both chemicals (Coca-Cola, Toray) and fuels (Tesoro).

But it was Tesoro who stepped up to buy the company, and new CEO Stacey Orlandi has noted that, in technology development, it is economics that will dictate the optimal product slate. And what’s been happening in the price environment? Generally, price declines in renewable chemicals. This lift in carbon prices is propelling a vastly improved margin in low-carbon fuels. Viva Virent fuel (and cool Coca-Cola plant bottles, and snappy biobased t-shirts).

How long can the bull market in cellulosic fuels go on?

Generally speaking, the EPA is required through 2022 to, more or less, establish a cellulosic fuels market as Congressionally-mandated levels, so long as the production is in place. So, theoretically, market capacity could expand by more than 10 billion gallons over the next five years (which it won’t) without reducing the carbon values we are seeing at the US federal level. Should cellulosic capacity expand by more than 500 million gallons, we’d expect to see the California low carbon premium begin to climb down.

But. Canada’s. LCFS. Is. Coming. So, keep in mind that another major LCFS market will be opening up soon across Canada (B.C. already has one, but this would be 7-8X as large), and Canada is only about 30 percent smaller than the California market.

And, there continue to be rumors about a US East Coast LCFS. And we keep looking at the EU, and wonder when those guys will stop talking up a big carbon game and get a low-carbon transport policy together that grows a market instead of scaring it out of existence.

Bottom line, there’s plenty of room for cellulosic to grow before the value drivers lose their pricing power.

The Velocys backstory

We reported in January that Velocys and ThermoChem Recovery International signed  a strategic alliance under which TRI will be Velocys’ preferred supplier of gasification systems for its biomass-to-liquids plants. The agreement will see the alliance partners rapidly deploy an integrated biorefinery offering that combines Velocys’ Fischer-Tropsch (FT) technology with TRI’s proven gasification technology.

The partners have already started a joint development of the engineering design for a 1,400 barrel per day BTL plant to produce renewable diesel and jet fuels from woody biomass. TRI will support Velocys and its partners to further optimize overall plant cost and the financing of BTL plants through, for example, accessing governmental loan guarantee processes and securing independent engineering reviews.

A key next step will be an integrated technology demonstration; Velocys will relocate its skid-mounted pilot plant from Ohio to the TRI facility in North Carolina. The joint demonstration has been selected for support as part of a competitive award granted by the US Department of Energy for the development of smaller scale integrated biorefineries.

This is the second strategic partnership that has been agreed since a review of Velocys’ strategy was completed in 4Q 2016. A core theme of the new strategy is to deliver, jointly with partners such as TRI, a “one-stop-shop” offer to customers – a fully integrated and financed, cost effective and operations-ready plant solution.

More on Velocys math here.

The Bottom Line

We’re seeing a slow but accelerating shift to cellulosic, despite the pains with enzymatic hydrolysis — and there are big values to be captured. Expect to see more bolt-ons and smaller-scale plants (like Velocys’s first commercial) until players like POET-DSM, Beta Renewables and DuPont have their technologies ready for broader deployment.

Categories: Today's News

Indonesia looking to China to fill biodiesel export gap

Biofuels Digest - Mon, 06/12/2017 - 7:14pm

In Indonesia, the biodiesel industry is looking for new export markets since the US and European Union have all but shut their doors to them. Top on the list is China who could need as much as 9 billion liters per year to achieve its B5 blending mandate, potentially opening a door for Indonesian imports. The government has organized a trade visit to China next week in hopes of encouraging that trade as a way to compensate for lost markets.

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Federal judge orders KiOR’s former CEO and CFO to pay $4.5 million

Biofuels Digest - Mon, 06/12/2017 - 7:12pm

In Mississippi, the former CEO and CFO of KiOR have been ordered by a federal district court judge to pay $3 million to the 23,000 shareholders who lost their money in the failed venture, along with $1.5 million plus fees for attorneys. The state’s suit against the former company for $77 million plus interest is still ongoing. The state claims that the company defrauded the state in order to get the loan. The lead investors paid the SEC a $100,000 fine to settle allegations the company had misconstrued to investors the facts about the technology’s capacity to produce biocrude from wood.

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