EU gives go-ahead for 111 MGY ethanol plant in Hull, England
August 31, 2007
In Brussels, the EU approved plans by BP Associated British Foods to construct a 111 Mgy ethanol plant in Hull, England, scheduled to be online in 2009 and will use wheat as a feedstock.
Wheat-based ethanol has come under scrutiny this week as the director of the Spanish Flour and Semolina Producers Association blamed biofuels for up to 50% price increases in bread prices as soon as next year.
The Hull plant is a joint venture of BP and Associated British Foods. The EU is on a vigorous ramp-up of biofuel production facilities to ensure as much Europe-produced fuel is used as possible in support of strict EU renewable energy mandates in effect and proposed for the future.
Indian fuel distributors say they can procure enough ethanol to support an E10 mandate
August 31, 2007
Fuel distributors disputed government officials’ assertions that the country cannot produce enough ethanol to support an E10 mandate. They stated that they have procured 120 million gallons of ethanol, almost half the 295 million gallon ethanol requirement to support E10 if it is imposed in the country. Previously, Biofuels Digest reported on a Times of India article quoting Indian officials who say the country would acquire 60 million gallons of ethanol by year end.
Iowa ethanol plant postponed due to escalating construction costs, decline in ethanol prices
August 31, 2007
In Iowa, Little Sioux Corn Processors announced the postponement of its IPO after putting its planned 100MGY ethanol plant in Akron, IA on hold due due to escalating construction costs and declines in ethanol prices. Biofuels Digest previously reported on Plymouth County’s trapped investment in supporting the planned Akron River facility. There have been an increasing rash of ethanol plant postponements due to ethanol and corn price outlooks, as well as numerous warnings from executives about the difficulty of financing corn ethanol projects. In addition, in states such as Minnesota, ethanol projects are running into more local opposition from critics of incentives, and concerns about emissions.
US Renewable Fuel Standard (RFS) debuts September 1st
August 31, 2007
The US renewable fuels standard, or RFS, debuts on Saturday, September 1. The program will mandates an increasing percentage of renewable fuels in motor vehicle fuels, with credits granted to ease the transition.
The program exempts small refineries through 2010, plus the states of Alaska and Hawaii, although Hawaii has imposed a separate E10 mandate. RFS program mandates blending of 7.5 billion gallons of renewable fuel into US-sold fuel by 2012.
The RFS is an outcome of the Executive Order on greenhouse gas emissions issued by President Bush this past May.
The EPA has stated that it expects with this standard to reduce petroleum-based fuel consumption by up to 3.9 billion gallons through by 2012. The excess petroleum would have been typically purchased through the export markets, and RFS thereby has the potential to reduce the trade deficit by as much as $6.7 billion.
THe EPA estimates a reduction of up to 2.5% in carbon monoxide (CO) emissions, up to 4% reduction in benzene emissions, and an overall redcution in greenhouse gas emission by up to 13 million tons. Under the Kyoto system, a credit of 1 ton of CO2-equivalent gas emission reduction reduction trades at $14, which translates the projected US gas emission reduction into an equivalent of $182 million in additional benefit. The EPA warns that emissions of certain compounds, such as nitrous oxides (NOx) may increase as much as 83,000 tons.
The cost increase in cost associated with implementing ethanol blended fuel (0.5 to 1.1 cents per gallon) will be offset through tax credit, resulting in an average decrease of 0.4 to 0.7 cents per gallon at the pump.
Daily Summary for Friday August 31
August 31, 2007
Top Story: The US renewable fuels standard, or RFS, debuts on Saturday, September 1. The program will mandate an increasing percentage of renewable fuels in motor vehicle fuels, with credits granted to ease the transition. The program exempts small refineries through 2010, plus the states of Alaska and Hawaii, although Hawaii has imposed a separate E10 mandate. The RFS program mandates blending of 7.5 billion gallons of renewable fuel into US-sold fuels by 2012.
Producer News: In Iowa, Little Sioux Corn Processors announced the postponement of its IPO after putting its planned 100 MGY ethanol plant in Akron, IA on hold due due to escalating construction costs and declines in ethanol prices. Biofuels Digest previously reported on the Plymouth County’s trapped investment in supporting the planned Akron River facility….Altra Biofuels announced that it has secured financing for a 60 Mgy ethanol plant in Coshocton, Ohio, and a 100 Mgy plant in Cloverdale, Ind. The Coshocton plant is scheduled to open in the fourth quarter and the Cloverdale plant in the second quarter of 2008….In California, a 30 Mgy biodiesel plant is under construction by Crimson Renewable Energy and will be completed in spring 2008. The plant will increase California biodiesel production by 150%.
International News: In Mozambique, Pro-Cana announced that it will construct a $500 million ethanol plant in Gaza province….In India, fuel distributors disputed government officials’ assertions that the country cannot produce enough ethanol to support an E10 mandate. They stated that they have procured 450-460 million litres of ethanol, almost half the 1,130 liter ethanol requirement to support E10 if it is imposed in the country….In Brussels, the EU approved plans by BP and Associated British Foods to construct a 111 Mgy ethanol plant in Hull, England, scheduled to be online in 2009 and will use wheat as a feedstock….In Australia, Australian Renewable Fuels announced a loss of $33.6 million, a 959 per cent increase over last year, as the company ramps up production and after it ended negotiations with a major oil company to supply Western Australia services stations with biodiesel.
Policy & Policymakers: The Biodiesel Association of India has called for India to dedicate 12.8 million hectares of wasteland to jatropha cultivation….China released details of its biofuels plan, calling for production of 3.8 million metric tons of ethanol from sweet sorghum stalks….In Switzerland, the Roundtable on Sustainable Biofuels released a draft of new principles for sustainable biofuels.
Research News: In Brazil, sugar output is expected to decline this year despite record sugar cane harvests, as Brazil diverts more sugar to fuel production. Total harvest is projected at 547.2 million tons of sugar cane, up from 474 million tons last year, but sugar production will decline from 30 million metric tons from 30.2 million last year. Ethanol production is expected to increase to 5.6 billion gallons, up from 4.5 billion last year….In Spain, the director of the Spanish Flour and Semolina Producers Association blamed biofuels for up to 50% price increases in bread prices as soon as next year. The director notes the impact of poor harvests in Eastern Europe and higher transportation costs but said biofuels were the greatest source of price pressure.
Consumer and Fleet news: In Canada, Petro-Canada, signed as the sole customer of 32MGY produced at GreenField Ethanol’s plant in Varennes, Quebec. In Sweden, Volvo Group announced it will produce seven demonstration trucks, equipped with 9 liter engines, suitable for biodiesel fuel….Nielsen released its Nielsen BuzzMetrics Q2 2007 Sustainability Buzz Report, finding that the term “sustainability,” has increased its buzz levels 169% in the past year….In New Jersey, New Jersey Natural Gas will switch 32 trucks and additional construction vehicles to B20 biodiesel, and switch a further 17 trucks following completion of a biodiesel storage tank.
Financial News: The Biofuels Digest Indexâ„¢ (BDI), a basket of 21 major public biofuel stocks, rose 1.89% percent yesterday to 102.23 as an improved outlook for ethanol overshadowed increasing worries about the credit market that dragged down the market as a whole.
Biofuels Stock and Financial Outlook for August 31
August 31, 2007
Biofuels stocks will be looking to rise today on the strength of Lehman Brothers’ upgrade of the ethanol sector from “Neutral” to “Positive” and a suggestion that passage of favorable energy legislation this year is greater than 50/50.
US biodiesel producers, and refiners will be looking for more investor interest after Volvo announced a new demonstration line of trucks designed for alternative fuels. Ethanol stocks will look to capitalize on stabilizing corn prices, and all sectors may get a lift on news from Nielsen that the term “sustainability” has increased 169% on the Nielsen BuzzMetrics Report for the second quarter.
The nation’s first renewable fuels standard, RFS, goes into effect on September 1st. The program requires that 4.7 billion gallons of US fuels will have to be blended with alternative fuels.
The broader markets were down slightly yesterday, with the Dow Jones industrials down 0.4%, or 50.56 points, to 13,238.73, while the S&P 500 was down 6.14 points to close at 1457.64%. The Nasdaq managed a small gain for the day, up 2.14 points to 2565.30.
The markets are likely to be dominated today by continued speculation about potential rate cuts by the Federal Reserve, and a proposal expected from the White House today aimed at easing the fast-rising rate of subprime mortgage defaults.
The Biofuels Digest Indexâ„¢ (BDI), a basket of 21 major public biofuel stocks, rose 1.89% percent yesterday to 102.23 as an improved outlook for ethanol overshadowed increasing worries about the credit market that dragged down the market as a whole.
Biofuels Digest Indexâ„¢ (BDI) up 1.90 points as ethanol outlook improves, credit worries rise
August 30, 2007
The Biofuels Digest Indexâ„¢ (BDI), a basket of 21 major public biofuel stocks, rose 1.89% percent today to 102.23 as an improved outlook for ethanol overshadowed increasing worries about the credit market that dragged down the market as a whole.
This morning, Lehman Brothers analyst Mansi Singh upgraded shares of ethanol producers Aventine Renewable Energy Holdings (AVR), and VeraSun Energy (VSE) to “Overweight” from “Equal Weight”. Singh also upgraded the ethanol sector from “Neutral” to “Positive”.
In setting price targets of $20 for Aventine and $17 for VeraSun, Singh cited a combination of steady corn prices, rising ethanol prices, and the expectation of favorable energy legislation could result in a 50% increase in share value.
Sector giant Archer-Daniels-Midland (ADM) was up 2.1% to $33.59, while VeraSun rose 3.35% to $12.65 and Aventine rose 3.36% to $14.16 following the Lehmans move.
Biofuel small caps generally drifted lower, with Texcom (TEXC.PK) down 10% to $0.18, Alternative Energy Sources (AENS.OB) down 4.88% to $0.78 and Xethanol (XNL) down 4.76% to $1.00 in light trading conditions.
Among the larger cap stocks, Andersons (ANDE) was down 1.0% to $46.63 and Pacific Ethanol (PEIX), was up 1.1% to $11.51, with the Lehman letter the major factor in the jump.
The broader markets were down slightly at close, with the Dow Jones industrials down 0.4%, or 50.56 points, to 13,238.73, while the S&P 500 was dpwn 6.14 points to close at 1457.64%. The Nasdaq managed a small gain for the day, up 2.14 points to 2565.30.
Major news from Biofuels Digest Indexâ„¢ stocks included top management changes at MGP Ingredients (MGPI), and a report that A-D-M spent almost a half million dollars on lobbying efforts in the first half of 2007.
Lehman Brothers upgrades Aventine, VeraSun on favorable corn, ethanol prices
August 30, 2007
Lehman Brothers analyst Mansi Singh upgraded shares of ethanol producers Aventine Renewable Energy Holdings (AVR), and VeraSun Energy (VSE) to “Overweight” from “Equal Weight”. Singh also upgraded the ethanol sector from “Neutral” to “Positive”.
In setting price targets of $20 for Aventine and $17 for VeraSun, Singh cited a combination of steady corn prices, rising ethanol prices, and the expectation of favorable energy legislation could result in a 50% increase in share value. Singh’s note to investors did not comment on the impact of higher oil prices, except to say that Lehman expected the margin between the price of gasoline and ethanol to narrow in coming months. Aventine presented last Friday at the Lehman Brothers CEO Energy/Power Conference.
Aventine, closing at $13.70 yesterday, had been trading at the low end of its $13.10 - $28.70 52-week range. VeraSun had also been trading at the bottom end of its range, with a closing price yesterday of $12.26 within a 52-week spread of $12.11 to $26.90.
VeraSun was up 6.2 percent to $13.00 in early trading, while Aventine was trading at $14.38, up 5 percent.
Mozambique’s Petromoc to raise $408 million for jatropha biodiesel project
August 30, 2007
The Mozambique oil producer Petromoc is raising $408 million for a new project using 45,000 hectares of jatropha to produce 59 million gallons of biodiesel. Petromoc is currently conducting a pilot biodiesel project using coconut oil as a feedstock.
Petromoc has approached the Brazilian company INM International, Sonipal Ltd, and Aruangua agro-industrial as partners in the project. Mozambique has palm oil planting underway, but jatropha comes to market 54 months faster than palm oil, and with completion of this project the country is expected to be bio-diesel self-sufficient by 2011.
Malaysia’s FELDA acquires Twin Rivers Technolgies, enters US biodiesel market
August 30, 2007
Malaysia’s Federal Land Development Authority (Felda) acquired US-based Twin Rivers Technologies for $68.9 million. Felda intends the acquisition as a platform for increasing market share in the North America vegetable oil and biodiesel market. Twin Rivers is a major producer of vegetable oil-based biodiesel under the Envirodiesel brand, at its Cincinnati plant. The company also produces vegetable oil-based ethanol.
US palm oil imports have doubled since 2004 to 683,000 tonnes, which has evoked strong interest among palm oil producing nations such as Malaysia.
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