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A fuel value over $7.00 per gallon, and everyone’s chasing it: The birth of USA Bioenergy and the surge in renewable diesel

Biofuels Digest - Tue, 11/20/2018 - 2:58pm

In California, we are now seeing project flow projecting a sustainable $7.63 price for renewable diesel in the California market, where the Low Carbon Fuel Standard stacks on top of the RIN values from the federal Renewable Fuel Standard.

That’s market value, not subsidy. Though some die-hards might still insist that renewable fuels should only be sold based on energy value, not on market value, as in for example the markets which Californians freely established for themselves with the Low Carbon Fuel Standard, and in which any fuel producer can avoid carbon taxes and no one is guaranteed a subsidy. Yes, Californians have different standards for fuels than other states. But then again, some people drink bottled water at $6 a gallon and some drink tap water for pennies. Up to you — that’s how markets work.

With the change in how Californians have designed their transport markets, for some time, we have been tipping that a boom in renewable diesel is on.

The limitation that everyone is talking about is feedstock. At some stage, there’s not going to be a drop of tallow or other waste oils anywhere near the state of California; the economics are certainly there to begin to compete for veggie feedstocks such as soybean oils, but most of the newer projects have been wary of utilizing anything at scale that looks like it will be in long-term competition with food markets — problems with price swings and the optics of food-vs-fuel are usually cited.

For that reason, one of the top execs at one of the major players (that is, the “north of 300 million gallons per year” club predicted that the industry will begin to tilt towards wood-based feedstocks, especially residues. In some cases for finished fuels, in others as a source for a biocrude that can be refined by the bigger players.

That’s good news for the likes of Red Rock Biofuels, which has established such a technology though jet fuel is what their primary offtakers are requiring. EnerSysNet has been on stage at ABLC presenting just such a technology, too — though with a strikingly modular, small-scale, low capex approach. It’s early days for EnerSysNet — we expect that 2019 will be a pivotal year fro them in advancing towards commercialization.

Perhaps the most intriguing company we’ve seen of late is USA Bioenergy, which has racked up agreements providing access to over 2 million tons annually of renewable and sustainable feedstocks in Oregon, Arkansas, and Arizona. Upon completion of its project plan, the company aims to produce an estimated 4,000 barrels daily of premium renewable fuels (approximately 60 million gal/yr),and they have the option of nearly tripling their production in Arkansas, which would bring total production volumes in the area of 140 million gallons annually with our current feedstock suppliers. 

It’s ambitious.  it takes 78 semi truckloads a day, ten hours a day, running six days a week to feed a 750 ton gasifier.

Let’s look at the company in some more detail.

Who is USA BioEnergy?

USA BioEnergy is a renewable fuels technology development and integration group based in Scottsdale, Arizona —  integrating real estate development, renewable energy technologies and capital structure. Specifically, the company develops sustainable energy projects in the fields of biomass to fuel, municipal solid waste to fuel, biomass to electricity and anaerobic digestion to biogas. 

The technology approach

The projects will use biomass gasification to convert the biomass into a hydrogen and CO-rich synthesis gas. The syngas is processed via Fischer Tropsch catalytic conversion to produce a light synthetic crude oil. This light crude is then upgraded using conventional equipment from well-known process technology providers in the oil and gas sector.


It’s early days, but the company is actively looking for renewable fuel purchasers who are willing to enter into a 12 to 15-year fuel purchase agreements. These agreements must have a floor price to cover operating costs and debt service as required by funding sources. Airlines or large truck stops companies are the primary target. They can purchase all of the renewable jet fuel or diesel fuel from our first three biorefineries. USA BioEnergy is currently looking for a standing order of 100 million gallons of renewable fuel.

The project progress

The development process has now reached the point where a front-end engineering and design study (“FEED”) must now be conducted to move forward.

The California market

Transportation fuel is one of the top three energy use sectors in the United States, accounting for a third of the 20 million barrels of crude oil consumed daily.  Californians consume more than 50 million combined gallons of gasoline and diesel each day, or 1.2 million barrels per day. California’s Low Carbon Fuel Standard (LCFS) and the Cap-and-Trade Program are two policies, working in concert to cut the use of high-carbon fuels for transportation and also create affordable low-carbon alternatives and the infrastructure needed to support their use.  These policies, in turn, are spurring investors, entrepreneurs, scientists, and engineers to develop innovative low-carbon transportation technologies and strategies as we have done. California has dramatically affected the direction of the nation’s transportation sector as it continues to lead with landmark legislation to decrease petroleum use 50% by 2030, and greenhouse gas emissions 30% by 2020. Presently in 2018, cellulosic and advanced biofuels production in the U.S. has been well below the EPA’s required annual mandates.

Mitigating the risks

The company is using commercially proven technologies with production and lifecycle guarantee on our catalysts and engineering guarantees from its EPC. Additionally, they are pursuing an insurance wrap that covers the project end to end. The insurance will be in place for the life of the debt service and provides certain production guarantees. We are utilizing top-rated EPC contractors that provide construction and process guarantees to assure investors the plants will be built on time, on budget, and maximize nameplate production volumes.

The sites

The project has entered into a Letter of Intent with terms of a transaction to fund, build, purchase & leaseback, and operate one or more plants to produce about 19,400,000+ gallons per year of renewable diesel and/or jet fuel on sites controlled by USA BioEnergy in Yell County, Arkansas, and in Maricopa County, Arizona, and Lane County, Oregon.

It looks like the Arizona project may be the first one, and would be located on approximately 96+ acres in the city of Buckeye in Maricopa County, Arizona, is zoned for heavy industrial with all required utility service and rail access. 

The project scope

The purchase & leaseback will provide funding for:

• Cost of land, construction & equipment
• Construction interest
• Rent reserves
• Technology insurance, and
• Working capital, etc.

The primary lease term will be for 30 years. Multiple ten-year renewal terms are available

Conditions for closing include:

• Site owned or optioned with all approval from proposed use
• Executed lease and purchase & sale agreement
• Executed bondable GMP construction contract
• Demonstrated redundant sources of intake materials
• Long-terms offtake agreement with financially strong entity or entities
• Production and technology guarantees from third-party operator and equipment manufacturers
• Rent guarantee and/or technology insurance from entities with investment grade credit rating
• Normal real estate conditions Closing will take place upon commissioning and acceptance of the plant from the EPC by USABE

About that fuel value

According to those familiar with the project details, the assumed fuel price is $7.63 per gallon at completion of the project. That’s striking. The breakdown is as follows:

$2.80 energy value
$2.72 federal RIN value
$2.11 California LCFS value

The anticipated CI of fuel produced by the project “should have a CI of ~10 gCO2e/MJ and receive a LCFS value of >$2.00/gal.,” according to project principals. 

The knowns and unknowns

Couple of knowns and unknowns to focus on.

First, the known high capex cost associated with F/T technologies at this scale. That’s a risk factor if the project fundamental don’t work out in terms of cash flow — less of an issue here because of the stability of the California carbon markets, and we understand that the project has 100% of the financing in place subject to 3rd party validations, completion of designs and a technology insurance wrap.

Second, the unknown nature of the offtakers and the specific of the technology partners. EFT, Velocys and Johnson Matthey have been offering F/T back-end systems, and TRI, Sierra Energy and InEnTec have been in the running for high-profile technologies of late. We’ve seen some turbulence in the project line-ups. Fulcrum recently switched back-end providers from EFT to Johnson Matthey and we see that Red Rock has added EFT as a licensor. There’s been less turbulence on the gasifier side.

Another unknown, the identity of the offtakers. For diesel, the big trucking firms are always on the radar and of course the major oil refiners with their large obligations under RFS to blend renewable fuels. In some ways, truck stops have the upper hand, if they can handle the supply volumes, because they are not themselves obligated parties under the US Renewable Fuel Standard, meaning they can buy the fuel, and detach and sell the RINs in the open market. For that reason, fuel retailing firms are the untapped resource that can push renewable fuels to new heights.

Stability of the US carbon credit market is a known unknown. In the US, we have seen D6 ethanol RIN prices swing from highs of nearly a dollar to a low in recent weeks of under 2 cents. The diesel side is way more stable, but it illustrates the importance of having a clear vision on forward carbon prices and risk mitigation.

The hunt for dollars

Though project finance appears to be conceptually in place, the company has the same needs as almost anyone else at this stage to satisfy the usual lender conditions. Site under control,, permits in place, long-term and credit worthy offtakers, operator agreements, a construction contract, technology and engineering guarantees, and the various insurance wraps. So, the company is on the hunt for funding for this stage of approvals.

More about the company

The financials, the project partners and principals are usually just an NDA away, and the company and its contact details are available here.

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NYC fleet expanding use of renewable diesel fuel following success six-month trial

Biofuels Digest - Mon, 11/19/2018 - 7:02pm

In New York state, the NYC Department of Citywide Administrative Services (DCAS) announced that it will expand use of renewable diesel fuel. The fuel reduces CO2 emissions by 65% compared to the petroleum-based version. This move is part of the City’s efforts to phase out its use of regular diesel.

The City plans to bid a long-term contract to purchase renewable diesel following a successful six-month demonstration period in which the City tested nearly one million gallons of renewable diesel in City fleet vehicles.

Each year, City fleet units use up to 17 million gallons of diesel that could be displaced through this initiative.

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Costa Rica set to launch E10 in May

Biofuels Digest - Mon, 11/19/2018 - 7:01pm

In Costa Rica, local press reports that the country will begin blending 10% ethanol in premium gasoline beginning in May 2019 with lower grades of gas set to be blended with ethanol at another date in the future. Though ethanol is expected to bring down the price of fuel at the pump slightly, E10 in the super gasoline category will save 38,000 metric tons of CO2 by the end of 2019. Studies show that the country will have a vehicle fleet of 4.7 million cars by 2037 but electric vehicles and motorcycles are expected to dominate the market over conventional cars.

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Chippewa Valley Ethanol getting creative on ways to power expansion

Biofuels Digest - Mon, 11/19/2018 - 7:00pm

In Minnesota, Chippewa Valley Ethanol Company and BioPro are trying to convince local authorities to let it by a small piece of a wider industrial site and take over the former power plant building located on that site in order to produce steam from corn cobs that will allow the ethanol plant to expand its production. The entire site has been spoken for by another company that wishes to produce renewable natural gas from dairy and other farm waste but has no need for the former power plant facilities nor the small piece of land it sits on. The team of companies has hit a number of obstacles in trying to secure the land and facility but they hope that by convincing local authorities to let them have it, they could create a triple win situation for the community.

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UK biofuels consumption at 4% for April 15-December 31, 2018 (yes, you read that right)

Biofuels Digest - Mon, 11/19/2018 - 6:59pm

In the UK, Department for Transport released biofuel consumption data for April 15 to December 31, 2018 based on data from mid-September showing that biofuels achieved 4% of road transport fuel during the period, roughly 525 million liters of which 172 million liters met sustainability criteria. Nearly 60% of the sustainable fuels was biodiesel, followed by 38% ethanol and the remainder biomethane, biomethanol and off-road biodiesel. Of the 320 million renewable transport fuel certificates issued during the period, 296 million certificates were from “double counting” feedstocks.

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Hurtigruten to fuel cruise ships on biogas made partly from fish waste

Biofuels Digest - Mon, 11/19/2018 - 6:58pm

In Norway, Reuters reports that Hurtigruten is investing $826 million to adapt its 17-vessel fleet of cruise ships including six older vessels that will run on a combination of liquefied natural gas (LNG), electric batteries and liquefied bio gas (LBG), the latter of which will be produced from fish waste along with agricultural and forestry waste. The company is planning to be carbon neutral by 2050. It is also investing in new electric-powered vessels with diesel engines as backup and has a letter of intent on a third.

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Argentina lifts prices for corn-based ethanol and biodiesel but cuts cane-based ethanol

Biofuels Digest - Mon, 11/19/2018 - 6:57pm

In Argentina, Platts reports that the Ministry of Energy has raised prices for corn-based ethanol by more than 8% to 55 cents per liter while cutting the price for sugarcane-based ethanol by more than 3% to 59 cents per liter for November. Biodiesel prices were raised by around 2% to $782.30/mt. The prices set by the ministry must be paid by fuel companies who buy locally-produced biofuels to blend 10% biodiesel and 12% ethanol. Price shifts are meant to reflect changes in the production cost of the fuel.

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Norwegian researchers find producing aviation biofuels domestically good and less good

Biofuels Digest - Mon, 11/19/2018 - 6:56pm

In Norway, two researchers at the Norwegian University of Science and Technology’s (NTNU) Industrial Ecology Program decided to look at how producing aviation biofuels in Norway would affect the climate and other environmental aspects identified by the United Nations Sustainable Development Goals, or SDGs. These goals have been developed to guide the world’s transition to a more sustainable society.

They found that producing jet fuels from forestry residues would be good for the climate but can put pressures on some SDGs, such as Zero Hunger, Clean Water and Sanitation and Responsible Consumption and Production.

The good news, the researchers say, is that knowing this now allows policy makers and engineers to make technological and supply chain improvements to reduce adverse side effects. This knowledge is especially important as the industry ramps up to making biofuels.

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ICCT report says strong evidence Malaysian and Indonesian palm oil have high ILUC risk

Biofuels Digest - Mon, 11/19/2018 - 6:54pm

In Germany, a new working paper by the International Council for Clean Transportation says it found strong evidence that 40-53% of oil palm expansion in Indonesia and Malaysia has occurred on high carbon stock land in recent decades, including forest, wetlands, and shrubland. ICCT researchers say there is some evidence that significant expansion of soy in South America occurs on savannah and dry forest, with some expansion into the Amazon rainforest in recent years. This evidence strongly supports classifying palm oil, and suggests consideration of classifying soy, as high ILUC risk feedstocks, the paper said.

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Beyond the Cow: ICYMI, BYND IPO PDQ, and Perfect Day AKA Muufri JDA w/ ADM, FYI

Biofuels Digest - Mon, 11/19/2018 - 9:33am

It’s Thanksgiving week in the United States but we are feasting alternatively on acronyms here in Digestville. I.E., e.g., ICYMI, BYND IPO PDQ, and FYI Perfect Day AKA Muufri JDA w/ ADM.

As they said at Bletchley Park, let’s get out the Enigma machine and decode.

In New York and California this week, the nutrition side of industrial biotechnology — and specifically, the “beyond the cow moovement is, ahem, mooving faster with news that Beyond Meat has filed for its IPO and Perfect Day has inked a Joint Development Agreement with Archer Daniels Midland (ADM) to scale up the production of dairy proteins using fermentation in microflora.

Beyond Meat’s placeholder IPO target is $100 million and is supported by Goldman Sachs, J.P. Morgan, Credit Suisse, BofA Merrill Lynch, Jefferies and William Blair in the IPO.

What’s driving the action?

It’s combination of consumer shift, the industrialization of alternatives, and a successful foray into direct-to-consumer marketing.

As Beyond Meat expressed in its IPO:

We believe that consumer awareness of the perceived negative health, environmental and animal-welfare impacts of animal-based meat consumption has resulted in a surge in demand for viable plant-based protein alternatives. A key analogy for both the approach to and the scale of our opportunity is the strategy by which the plant-based dairy industry captured significant market share of the dairy industry. In the United States, the current size of the non-dairy milk category is equivalent to approximately 13% of the size of the dairy milk category. According to the Mintel Report, the non-dairy milk category in the United States was estimated to be approximately $2 billion in 2017. The success of the plant-based dairy industry was based on a strategy of creating plant-based dairy products that tasted better than previous non-dairy substitutes, packaged and merchandised adjacent to their dairy equivalents. We believe that by applying the same strategy to the plant-based meat category, it can grow to be at least the same proportion of the approximately $270 billion meat category in the United States, which over time would represent a category size of $35 billion in the United States alone. As a market leader in the plant-based meats category, we believe we are well-positioned to capture and drive a significant amount of this category growth. We also believe there is a significant international market opportunity for our products.

Perfect Day and ADM

Perfect Day is one of a number of companies targeting “milk without the cow” — but theirs is a full milk replacement in terms of taste and mouth feel, rather than a plant-based milk alternative.

The first project for Perfect Day and ADM is an animal-free whey protein that can be used in a wide variety of food products, across many different categories and geographies. Perfect Day adds: 

This will be the first time in world history that dairy proteins are produced at large scale via fermentation instead of using farmed animals. Through this partnership we will leverage ADM’s existing fermentation infrastructure to bring the cost of producing animal-free whey protein down to that of conventional whey protein. This will allow us to bring our new source of nutritious protein to full commercial scale within the next few years.”

The Beyond Meat backstory

Beyond Meat is one of the fastest growing food companies in the United States, offering a portfolio of revolutionary plant-based meats. They build meat directly from plants, an innovation that enables consumers to experience the taste, texture and other sensory attributes of popular animal-based meat products while enjoying the nutritional benefits of eating our plant-based meat products. 

The flagship product is The Beyond Burger, the world’s first 100% plant-based burger merchandised in the meat case of grocery stores. The Beyond Burger is designed to look, cook and taste like traditional ground beef. Our products are currently available in approximately 28,000 points of distribution primarily in the United States as well as several other countries, across mainstream grocery, mass merchandiser and natural retailer channels, and various food-away-from-home channels, including restaurants, foodservice outlets and schools.

Not marketing to veggies

Instead of marketing and merchandising The Beyond Burger to vegans and vegetarians (who represent less than 5% of the U.S. population), BB requests that the product be sold in the meat case at grocery retailers, where meat-loving consumers are accustomed to shopping for center-of-plate proteins. We believe merchandising in the meat case in the retail channel has helped drive greater brand awareness with our end consumers. The Beyond Burger is now carried by approximately 11,000 grocery stores in the US.  Interestingly, a Kroger study reported that “93% of Beyond Burger buyers over the 26-week period ended June 30, 2018 also purchased animal protein during the same period”.

It’s a big market.

According to Fitch Solutions Macro Research, the meat industry in 2017 generated $270 billion in retail sales in the United States and $1.4 trillion globally.

The Halo effect

Beyond Meat writes:

Reflecting the strength and value of the Beyond Meat brand to its partners, many of our restaurant, hotel and other foodservice customers choose to prominently feature our brand name on their menu and within item descriptions, in addition to displaying Beyond Meat branded signage throughout their venue. We believe that we have established our brand as one with “halo” benefits to our partners, as evidenced by the speed of adoption by key partners. For example, Beyond Meat was the fastest new-product launch in the history of both A&W Canada and TGI Fridays, and a number of our key partners are investing their own resources to tap into our brand and product awareness. Our products are now carried by approximately 11,000 restaurant and foodservice outlets across the United States.

Expansion beyond the US market

Beyond Meat writes:

“Our recent success with A&W Canada illustrates the growing international demand for our products. We launched in Europe in August 2018 through contracts with three major distributors and have also received strong expressions of interest from some of Europe’s largest grocery and restaurant chains. We intend to establish production capabilities in Europe in 2020.  Additionally, for several years we have maintained a presence and generated brand awareness in Hong Kong through our local distributor and expect further expansion in Asia over time.”

Expansion beyond beef

Beyond Meat has developed three core plant-based product platforms that align with the largest meat categories globally: beef, pork and poultry. We create our plant-based products using proprietary scientific processes that determine the architecture of the animal-based meat we are seeking to replicate and then we assemble it using plant-derived amino acids, lipids, trace minerals and water. 

Impressive revenue growth

Beyond Meat writes:

“We have experienced strong revenue growth over the past few years, increasing our net revenues from $8.8 million in 2015 to $32.6 million in 2017, representing a 92% compound annual growth rate. We have generated losses since inception. Net loss in 2016 was $25.1 million compared to $30.4 million in 2017, an increase of $5.3 million, as we invested in innovation and the growth of our business. In the nine months ended September 29, 2018, our net revenues were $56.4 million, a 167% increase from $21.1 million in the nine months ended September 30, 2017. For the nine months ended September 29, 2018, our net loss was $22.4 million. Going forward, we intend to continue to invest in innovation, supply chain capabilities, manufacturing and marketing initiatives as we believe the demand for our products will continue to accelerate across both retail and foodservice channels as well as internationally.”

Who’s the competition?

Meats? Well, there’s the traditional players, Hormel, Tyson, Cargill and the like. And there’s been a host of new companies coming along, Impossible Foods just snagged the #1 Hottest Technology” designation in the 40 Hottest Technologies rankings — and there’s Boca Foods, Field Roast Grain Meat, Lightlife, Morningstar Farms and Tofurky, to name a few others. Milks? Again, the traditional diaries, and also the makers of Silk and a raft-full of almond-based milks.

What’s the bottom line?

What we don’t yet know about plant-based alternatives are the limits. Specifically, the limit on the number of customers that will try an alternative, the extent to which they will make it a regular part of their purchasing routine, and the extent to which alternatives will succeed culturally and in terms of distribution strategy outside of US markets. 

That will tell us whether the companies will create another important niche in the US with, say, 5 percent market share like the vegetarian and vegan market commands — or whether this will explode out of a $10-$15 billion niche and into the $300B+ markets for milk and meat in the US, or even the $1.5T+ global market.

Industrially, we don’t know — especially on the Perfect Day front — whether the costs will come down in commercialization to be competitive in the market, but we do know broadly that alternative milks are commanding a premium. 

With Beyond Meat, we’ve seen clear evidence that the company can compete on price — one reason are the extravagant processing and distribution costs already baked into the meat supply chain. The price of beef is around $1.15 from the farmer — wholesale beef ranges from $1.99 for the cheapest cuts of chuck to $11.41 for tenderloin, and there’s another big markup on the way to the retail shelf. Beyond Meat is able to integrate the first two cost centers and avoid the substantial cost of butchering.

So, meat without the cow and milk without the cow have taken giant steps forward this week. How far and wide the impact — say, on grain prices, soymeal demand, health outcomes, sugar and other alt-meat ingredient prices — we’ll know in the next few years.

Beyond Meat expects to trade as BYND on the NASDAQ Global Exchange; the complete IPO documentation is here.



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DuPont to repay $10.5M in state incentives to Iowa

Biofuels Digest - Sun, 11/18/2018 - 10:46am

In Iowa, economic development leaders for the state approved a settlement that requires DuPont to repay $10.5 million in state incentives that it received back in 2011 for its ethanol plant that they closed last year. The settlement is waiving $3.7 million of the incentives.

Last week, the Digest reported that VERBIO North America was acquiring the Iowa cellulosic ethanol facility from DuPont. VNA is investing $35 million and intends to install facilities to produce renewable natural gas (RNG) made from corn stover and other cellulosic crop residues at the site. This would be VERBIO’s third production facility devoted to this cellulosic technology

“The Iowa Economic Development Authority board agreed Friday to provide the company $1.78 million in tax credits,” according to the Des Moines Register. “Verbio proposes creating 44 jobs that pay close to $52,000 annually.”


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Latest models say almost all of Australia needed for bioenergy crops

Biofuels Digest - Sun, 11/18/2018 - 10:44am

In Germany, models foresee a 10 to 30-fold rise in agricultural land devoted to bioenergy according to the latest report from the Intergovernmental Platform on Climate Change that was referred to by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. Most IPCC scenarios foresee a major increase in land area for cultivating bioenergy crops by 2050 – up to 724 million hectares in all, an area almost the size of Australia.

“The key issue here is: where would this huge amount of new land come from?” asked Anne Larigauderie, Executive Secretary of the Intergovernmental Platform on Biodiversity and Ecosystem Services. “Is there currently such a large amount of ‘marginal land’ available or would this compete with biodiversity? Some scientists argue that there is very little marginal land left. This important issue needs to be clarified, but the demand for land for energy will almost certainly increase, with negative consequences for biodiversity.”


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EPA approves renewable fuel pathway for Andersons ethanol facility

Biofuels Digest - Sun, 11/18/2018 - 10:40am

In Indiana, Andersons Clymers Ethanol LLC received approval from the U.S. Environmental Protection Agency for a pathway for the generation of renewable fuel Renewable Identification Numbers under the renewable fuel standard program for the production of non-grandfathered ethanol. The ethanol is produced through a dry mill process at Andersons’s production facility located in Logansport, Indiana using com starch as feedstock (the “Andersons Clymers Process”).

Andersons submitted data to the U.S. Environmental Protection Agency to perform a lifecycle greenhouse gas (GHG) emissions analysis of the fuel produced through the Andersons Clymers Process. “Based on our assessment, fuel produced through the Andersons Clymers Process qualifies under the Clean Air Act (CAA) for renewable fuel (D-code 6) RINs, assuming the fuel meets the conditions and associated regulatory provisions discussed in the attached document, and the other definitional criteria for renewable fuel (e.g., production from renewable biomass, and used to reduce or replace petroleum based transportation fuel, heating oil or jet fuel) specified in the CAA and EPA implementing regulations. This approval applies specifically to the Andersons Clymers facility, and to the process, materials used, fuel produced, and process energy sources as outlined and described in the petition request submitted by Andersons.

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Evogene Reports Third Quarter 2018 Financial Results

Biofuels Digest - Sun, 11/18/2018 - 10:38am

In Israel, Evogene Ltd.’s financial results for the third quarter ending September 30, 2018 were positive with approximately $58.2 million in cash, short-term bank deposits and marketable securities, representing a net cash usage of approximately $13.5 million for the first nine months of 2018 and approximately $4.0 for the third quarter of 2018.

Gross profit for the first nine months of 2018 was approximately $0.3 million in comparison to approximately $0.4 million during the first nine months of 2017. Gross profit for the third quarter of 2018 was approximately $0.1 million in comparison to approximately $0.2 million reported for the third quarter of 2017.

Evogene is in the process of implementing its new business strategy and supporting corporate structure, which is based on stand-alone companies, each focused on a distinct field. One of those, Evofuel, has realigned its strategy in light of changes in the biofuel industry and initiated a change in its targeted market from the biofuel industry to the castor oil market for industrial uses and a change in business model – from generating revenues from seed sales, to mainly focus on partnering with castor oil producers on a revenue-sharing basis from oil and other final product sales. Evofuel recently announced together with Fantini, an agricultural equipment manufacturer, a breakthrough in mechanical harvesting for castor bean.

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Good soybean supply – rapeseed slightly scarcer

Biofuels Digest - Sun, 11/18/2018 - 10:36am

In Germany, UFOP reports that the stock-to-use ratios for soybean and sunflower seed have improved due to larger crops globally; rapeseed has gone down slightly. The stock-to-use ratio for rapeseed and sunflower seed has been in decline for years now.

The picture is somewhat different for soybeans. Bumper crops are causing supply and stocks to rise strongly. However, there is also a steady growth in demand for soy protein for animal feed, especially in China. Due to the positive development of the economy and income in the world’s most populous country, purchasing power is increasing and so is demand for meat and, consequently, oilseed meals to feed the growing numbers of livestock. China’s growth in demand for soy coincides with bumper crops in the US and Brazil in 2018/19. This correlation generates dynamic changes in price.

However, the dynamics are weakened given the good supply to the market. The Union for the Promotion of Oil and Protein Plants (UFOP) has found that not even the debate about the shift of soybean imports from South America in the wake of the trade conflict between China and the US has led to a lasting upward trend in prices. This again confirms just how sound supply to the market is. It also highlights the flexibility of European oil mills that switch from rapeseed to soybean processing. In this sense, the feedstocks are interchangeable at will, with the exception of those with the unique selling point of “without GM”. Although this situation ensures that feedstock is utilised locally, consumers need to drive local use by purchasing locally, UFOP has underlined.

In the important fuel sector, the question is if biodiesel producers are aware of the responsibility they have, UFOP has warned in view of the ongoing debate between the EU Commission and EU member states on banning palm oil in European biodiesel production.

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Ethanol production at highest average in 8 weeks

Biofuels Digest - Sun, 11/18/2018 - 10:34am

In Washington, D.C., ethanol production averaged 1.067 million barrels per day (b/d)—or 44.81 million gallons daily, down 2,000 b/d from the week before, according to government data released and analyzed by the Renewable Fuels Association. However, the four-week average for ethanol production increased to 1.055 million b/d—the highest average in 8 weeks—for an annualized rate of 16.17 billion gallons. Stocks of ethanol were 23.5 million barrels. That is a 1.3% increase from the prior week.

Imports of ethanol were 37,000 b/d after recording zero the prior week. This is the third time in six weeks to log foreign gallons. (Weekly export data for ethanol is not reported simultaneously; the latest export data is as of September 2018.) Average weekly gasoline demand expanded 1.0% to 9.192 million barrels (386.1 million gallons) daily. This is equivalent to 140.91 billion gallons annualized. Likewise, refiner/blender input of ethanol increased 1.0% to 926,000 b/d, equivalent to 14.20 billion gallons annualized. Expressed as a percentage of daily gasoline demand, daily ethanol production decreased to 11.61%.

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Argentina responds to EBB’s claim of distorted prices and tariffs

Biofuels Digest - Sun, 11/18/2018 - 10:33am

In Argentina, the Cámara Argentina de Biocombustibles, CARBIO, is fighting back in response to the European Biodiesel Commission which claims Argentina is distorting the export prices of its biodiesel by imposing a higher export tariffs on soybeans and soybean oil than on biodiesel.

CARBIO president Luis Zubizarreta told Clarin, “The European Commission is aware that in the present case there is no real evidence of subsidies or damages to the European biodiesel industry, and in September it chose not to impose provisional duties.” Zubizarreta also told Clarin that “the European biodiesel industry once again is urging the European Union (EU) to break the rules of global trade to protect it from more efficient foreign producers.” CARBIO asserts that the local biodiesel industry in Argentina is now cognizant of Europe’s protectionist policies and that EBB’s criticisms of Argentina’s biodiesel is unfounded and ignores the EU’s own distorted and subsidized market environment, according to Clarin.

Categories: Today's News

Purple bacteria turns sewage into hydrogen energy

Biofuels Digest - Sun, 11/18/2018 - 10:30am

In Spain, researchers at Universidad Rey Juan Carlos found a new method using purple bacteria and electrical currents that reduces carbon emissions from wastewater treatment plants. Purple bacteria are photosynthetic and use infrared light as their energy source, giving them various colors like purple, brown and red. The bacteria can perform metabolic reactions and are usually found in lakes as well as wastewater treatment plants.

ResearchGate interviewed one of the study’s authors, Daniel Puyol, who said that “waste composition plays a key role on the ability of purple bacteria to produce hydrogen. Our preliminary findings indicate that we are able to tune the metabolism of purple phototrophic bacteria to increase carbon dioxide fixation, while maintaining the same hydrogen productivity. This essentially means zero carbon footprint. We have recently obtained funding to design the process and patent the technology. With the technology demonstrated at lab-scale, we will try to convince the water sector about the feasibility of our technology. We have close contact with some water companies that would be interested.”


Categories: Today's News

‘Breakthrough’ harvesting solution, growing market, potential beyond biodiesel – all good signs for castor oil’s future

Biofuels Digest - Sun, 11/18/2018 - 10:21am

A ‘breakthrough’ mechanical harvesting solution for castor bean plants was developed by Evogene and agricultural equipment manufacturer, Fantini s.r.l., resulting in the removal of a major bottleneck in the conversion of castor beans into a fully modernized commercial crop. With field trial yield losses decreasing significantly (we are talkin’ up to 50% decrease) as a result of this new mechanical harvesting solution, we ask is castor oil becoming too good to flush down the toilet?

Castor oil, long been a constipation remedy, but more recently a cosmetic ingredient, hair growth and conditioning oil product, ingredient for biobased yarn and even shoes. It also has caught the eye of biofuel producers looking for efficient feedstocks for biodiesel. In fact, Evogene was working on biodiesel made from castor oil until recently when it announced that the stand-alone company that was working on it, Evofuel, is currently in a rebranding and renaming process to better reflect its new strategy…i.e. switching from the biofuel market to the industrial castor oil market.

Evofuel has realigned its strategy in light of changes in the biofuel industry and initiated a change in its targeted market from the biofuel industry to the castor oil market for industrial uses and a change in business model – from generating revenues from seed sales, to mainly focus on partnering with castor oil producers on a revenue-sharing basis from oil and other final product sales,” according to their press release.

The castor oil market

For something that was used to grease our insides, the global castor oil market is expected to keep growing as its being used in such a wide range of applications now. And this new mechanical harvesting can help push castor oil into a whole new realm.

“The global castor oil and derivatives market is expected to reach USD 2.3 billion by 2024,” according to Evogene’s press release. “The oil and its derivatives are used in various industrial applications such as: lubricants, surface coatings, cosmetics & pharmaceuticals, plastics & resins and biodiesel. Most of the global castor supply is from India where castor is grown in traditional methods and the harvesting is done manually, creating an unstable supply of castor oil and leading to high price volatility in the market. An industrial mechanized harvesting solution is projected to convert the castor bean into a commercially viable crop which is expected to support stabilizing the supply and to meet the growing demand for castor oil.”

Did you catch that last part? “An industrial mechanized harvesting solution is projected to convert the castor bean into a commercially viable crop…” This could be huge.

The new mechanical harvester is being developed by a consortium of Evofuel and Fantini s.r.l, together with Castor Oil Argentina S.A., an Argentinian company created to introduce castor as an extensive crop in the country, and BioFields SAPI de CV, a Mexican company focused on delivering innovative castor-based bio-products. In the coming months, semi-commercial scale field trials are expected to take place with Castor Oil Argentina S.A. and BioFields SAPI de CV.

Assaf Dotan, CEO of Evofuel, said, “We are happy to announce that together with Fantini s.r.l,   Castor Oil Argentina S.A., and BioFields SAPI de CV, we are on our way to provide a true revolution in the harvesting of castor bean.”

Castor oil’s future for biofuel?

Ok, so Evofuel switched from castor oil to biofuel to castor oil to industrial uses. So what does that mean for the future of castor oil in the biofuels market? Does it mean no one is using castor oil as a biofuel feedstock anymore?

There are people and companies out there still looking at castor oil as a viable biofuel feedstock. In the continent of Africa, there are several countries moving forward on castor oil to biodiesel to help struggling local farmers as well as help alleviate pressure on the need for fuel that seems to only come at high prices.

In South Africa, Thabang Mabapa, a self-confessed curious social entrepreneur and student at Wits University, is making biofuel from castor oil as a way to help the country’s current fuel price crisis as well as help local farmers. “We sell mainly to small-scale farmers and they buy because they see us using it in our tractors at the farm,” said Mabapa.

Mabapa told City Press that he was fortunate that the department of science and technology and a few other sponsors offered support for the research and development, which is still underway for the bio-jet fuel product line. “When we sell our biodiesel and castor oil, some of the revenue is dedicated to research to make sure the bio-jet fuel and bio-gasoline will also be sold commercially at some point,” said Mabapa. “I just focused on biofuel and that is my project, nothing else, and over time our product line expanded to biojet fuel and biogasoline and all this time we got more land for castor seed farming in North West, Mpumalanga and the Eastern Cape.”

Zimbabwe could also soon join India as one of the leading producers of castor bean. Chief Operations Officer of Life Brand Agric Services, Israel Isdory Kembo, told The Sunday Mail that his company has embarked on an aggressive roll-out of castor bean production. “Currently we are propagating 800 hectares under irrigation to produce seeds which will then be distributed for dry planting in the 2018/2019 season. Castor bean production is a trillion-dollar industry globally and the production scale is skewed in the favor of India and we are working on competing with them in its farming and processing,”

While Kembo considers castor oil as the best biofuel available in terms of per capita yield in the market and as a fuel additive, he recognizes the importance of castor as a whole. “Castor oil has many uses and the good thing is that it has many derivatives,” said Kembo. “And even more, not only is the seed precious, even the stem, leaves and roots of the tree has many uses.”

But with India being a leader, we should mention Arkema’s work this year to help over 1,000 Indian farmers complete what they call the world’s first sustainable castor bean program, even if the castor beans are not being used for biofuel (Arkema uses them for the manufacturing of Rilsan 11 polyamide).

Arkema, BASF, Jayant Agro-Organics, and Solidaridad joined forces on the initiative called Project ‘Pragati’ (Hindi word for progress). With this first-of-its-kind initiative globally, the companies are developing a sustainable castor framework titled ‘SuCCESS’ (Sustainable Castor Caring for Environmental & Social Standards). Key outcomes of the project to date include a yield improvement of 55% vs the 2016 baseline and more than 2,000 hectares of castor farming are now in accordance with the project framework.

Bottom Line

While the castor oil market isn’t moving as fast as the two to six hours that it takes for castor oil to produce bathroom benefits, we see the potential for this bean’s slippery oil, especially with Evogene’s new harvesting method speeding up its commercial potential.

And it’s not just the oil we see value in, especially with the global demand for more biobased alternatives. After all, if we can make shoes and yarn from castor plants, the possibilities seem endless.

Categories: Today's News

The Digest’s 2018 Multi-Slide ABLC Guide to Antares and innovations in harvest, pre-processing of herbaceous biomass

Biofuels Digest - Sat, 11/17/2018 - 9:28am

ANTARES has been assisting clients identify and use biomass resources since the company was founded and our experience ranges from conducting feedstock supply assessments to serving as owner’s representative in the conceptualization, development and operation of energy plants. A few examples of capabilities include:

• Feedstock logistics and supply/demand analyses for lender’s due diligence and project development

• Supporting advanced feedstock research programs through Department of Energy grants

• Owner’s representative services throughout project development including feasibility studies, preliminary engineering, project management and start-up/commissioning support.

• Feasibility studies for anaerobic digester (ADG) projects including fiber supply studies

The company gave this illuminating overview of its progress and promise at ABLC Global 2018 in San Francisco.

Categories: Today's News


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