Brazil produces record 384 million gallons of ethanol in October as development accelerates
October 31, 2007
In Brazil, ethanol production reached a record 384 million gallons in October, but unlike the US where increased production is resulting in a glut, Brazil is facing an ethanol shortage as soon as next April. In comparison, US production reached a record level of 565 million gallons in August.
Despite the US ethanol glut, Brazil is continuing to become more active in ethanol-related development. This week, state oil company Petrobras announced that they would construct a pilot cellulosic ethanol plant by 2010. Earlier in the month , Petrobras announced that it would establish Suape, a deepwater port in the northeastern state of Pernambuco near Recife, as its base for ethanol exports to Europe.
The company has so far signed agreements for export of 2 million gallons of ethanol to Europe. The company also is considering the construction of two ethanol pipelines, and announced plans to develop 20 sugar ethanol plants via multiple partnerships in Goias and Mato Grosso states and a partnership with Japanese trading company Mitsui. Each plant is projected to produce 50 Mgy of sugar ethanol and the first will be ready for operation in 2010.
China fuel shortage crisis escalates; one killed in riot
October 31, 2007
In China, fuel riots have begun because of shortages. The shortages are affecting Shanghai, the southeast coastal provinces, and are spreading to the interior. Diesel is fixed-priced at $2.42 in China, about one third of the price in European markets, and fuel companies are getting squeezed by soaring crude oil costs, leading to production cutbacks and allocations. Prices have not been raised for 17 months despite crude oil rices nearly doubling. Meanwhile, ethanol producers are also under pressure in China from high costs, and from a government shutdown of new ethanol production projects owing to the effect of ethanol demand on food prices.
India faces spiraling deficit from rising oil prices; ethanol production still lags
October 31, 2007
In India, the Additional Secretary, Ministry of Petroleum and Natural Gas projected that $90 oil would lead to a trade deficit of $26 billion.
Meeting the crisis that will come from the spiraling cost of oil is causing major challenges in India.
Earlier this month, the South Indian Sugar Mills Association said that of 180 sugar mills who belonged to the association, only 18-20 have the capability at this time to produce ethanol.
The association’s chief told the Hindu Business Line that “The cooperative sector is beset with financial crunch to upgrade their facilities in order to produce ethanol.”
The industry is struggling to establish an ethanol capacity to reduce India’s massive 12 million ton excess capacity of sugar, meet the proposed national E10 mandate which goes into effect in October 2008.
Poet offers new details on cellulosic ethanol plant, including $30-$60 per ton range for corn fiber and cob purchases
October 31, 2007
In Iowa, Poet added new details regarding its Emmitsburg, IA cellulosic ethanol plant, jointly funded with the US Department of Energy. The plant will produce 125 Mgy of ethanol, of which 25 Mgy will come from corn fiber and cobs.
The plant, which will be operational in 2011, will pay between $30 and $60 per ton of cobs and fiber for the 850 tons per day required by the plant. The cob price equates to a price of $0.63 and $1.26 per bushel, compared to $3.60 per bushel for corn.
VeraSun reaches 560 million gallons in annual ethanol capacity, halfway to goal of 1 billion
October 31, 2007
VeraSun Energy announced that, with the launch of its new Albion, NE plant, it had reached the halfway point of its goal of 1 billion gallons per year in ethanol production.
VeraSun recently announced that it will not pursue biodiesel production until industry economic conditions improve. The company is developing a process to extract corn oil from distillers grains, which could be used as a biodiesel feedstock, and the company is constructing a plant in Aurora, SD for oil extraction, and will also build similar facilities in Fort Dodge, IA and Charles City, IA.
But VeraSun said it would concentrate on selling the oil to other producers, rather than entering the biodiesel production business.
VeraSun (VSE) recently suspended construction of its 110 Mgy corn ethanol plant in Reynolds, IN due to the fall in ethanol prices. The company said it would restart construction in 2008.
US ethanol production up 3 percent as price recovers
October 31, 2007
U.S. ethanol production increased to to 434,000 barrels a day in August, up 3 percent for the month. Fuel ethanol prices fell to $1.75 per gallon at the Chicago Board of Trade. The price of ethanol has recovered 15 percent since reaching a low of $1.515 per gallon in late September.
Daily Biofuels Summary for October 30: US Senator Dorgan, fuel marketers, Energy Secretary reveal highly divergent views on ethanol incentive structure
October 30, 2007
Top Story:
Speaking in North Dakota, US Energy Secretary Samuel Bodman said that government mandates are less than ideal but might be necessary to boost the use of alternative fuels. “Sure, I’d like to get things done without mandates,” Bodman was quoted in chron.com as saying, adding that mandates are “proven to be a requirement in order to get a lot of these things done more effectively,” he said. Speaking at the same conference, Sen. Dorgan touted his legislation to set up tax incentives to stimulate installation of E85 pumps, the lack of which are a primary opportunity for ethanol expansion. But Mike Rud, president of the North Dakota Petroleum Marketers Association, said that fuel marketers need upfront incentive money, not tax incentives, because fuel marketers don’t make money at the pump and so tax incentives are not helpful. Rud added that there are only about two dozen E85 pumps in North Dakota and that there is little demand from consumers to add more.
Producer News:
Standard Ethanol Madrid, a unit of Mid America Bio Energy and Commodities, commenced production Monday at its Nebraska plant.
In North Dakota, two 55 Mgy ethanol plants are seeking grants from the North Dakota Agricultural Products Utilization Commission. Lakota Biofuels and Buffalo Creek Energy are each seeking $100,000 for business planning and accounting. The Lakota project has a projected cost of $171 million and Buffalo Creek $109 million.
Nano Chemical Systems has acquired BioCentric Energy in a reverse merger. BCEI shareholders will own 66% of the merged entity.
International News:
In Angola, more details emerged regarding Biocom. The plant, which is projected to open in 2010, will operate at 30 percent of capacity in its first year and will reach full capacity in 2012. The sugar, ethanol and power produced by the project are expected to be used domestically rather than for export, due to local shortages of these commodities.
In India, Pioneer Distilleries will increase production capacity to 12.5 Mgy, double its previous capacity, as demand from petroleum companies has increased.
In Australia, ethanol has become an issue in the upcoming national election. A group representing feed grains users and livestock owners opposed ethanol mandates, while the Deputy Prime Minister, Mark Vaile, have campaigned for expansion of a sustainable ethanol industry.
In Singapore, the Singapore’s Economic Development Board is aiming for a leading position in second-generation biofuels. Julian Ho, executive director for energy, chemical and engineering services at Singapore’s Economic Development Board, told the International Herald Tribune “We feel that if we’re going to focus on a sustainable type of activity we need to look beyond first-generation biofuels: Those made from food crops. Right now, everybody in the region seems to focus more on first-generation biofuels, but what we really want is to be the leading place for second-generation biofuels in Asia.”
In Mozambique, more details emerged regarding the launch of the Central African Mining and Exploration Company (CAMEC) biofuel project. CAMEC will invest US$510 million, and in produce 32 Mgy of ethanol from 30,000 hectares of sugar cane. The venture is expected to create 7,000 jobs.
Mali Biocarburant is intending to be the first jatropha biodiesel company to commence production in Africa. The company buys jatropha nuts from farmers who have planted 20,000 km of jatropha fences in Mali that protect crops and limit soil erosion. The company did not release details on the volume of jatropha nuts it planned to obtain.
In Thailand, the government reduced the price of B5 biodiesel to stimulate demand. The price of B5 biodiesel has been reduced as part of a government-backed plan to encourage more motorists to use the alternative fuel. B5, a mixture of 5% biofuel and 95% high-speed diesel, will now cost 3.18 per gallon, 3 cents less than petroleum diesel. The price reduction was accomplished by reducing taxes on blended biodiesel.
In Colombia, Oilsource Holding Group has formed a joint venture with Abundant Biofuels to produce jatropha-based biodiesel in Colombia. The joint venture plans to plant 100,000 hectares with jatropha curcas, in an investment program totaling $45 million.
In Brazil, the country’s largest petrochemicals company, Braskem, announced that it will invest $150 million in the production of polyethylene from sugarcane-based ethanol. The 200 Kty capacity plant will be operational in late 2009 following a successful experience with a pilot plant that commenced polyethelene production in June.
The Chinese government will wind down 1.6 mln tons of ethanol production by 2010 according to the National Development and Reform Commission. The government is eliminating unproductive plants as a part of its goal to reduce energy consumption per GDP unit by 20 pct by 2010.
Research News:
The Colorado Center for Biorefining and Biofuels awarded grants of $50,000 to 10 renewable-energy projects, including five to research teams from CU-Boulder, two each to teams from CSU and and the Colorado School of Mines, and one from NREL. The Colorado Center for Biorefining and Biofuels is a joint venture of the University of Colorado at Boulder, Colorado State University, the Colorado School of Mines and the National Renewable Energy Laboratory, and 27 energy-industry companies.
Policy and Policymakers:
The European Commission is planning to cut biofuels crop subsidies, according to Sega. The program of 45 euro per hectare subsidies was initiated when 310,000 hecrates had been devoted to biofuels. In w2007, the figure has jumped to 2,840,000 hectares.
Financial News:
The Biofuels Digest Indexâ„¢, a basket of public biofuels stocks, rose 1.59 percent yesterday to 105.24, a 52-week high, on strong performances by diversified large-caps such as Archer-Daniels-Midland (ADM) and The Andersons (ANDE), as well as pureplay ethanol stocks such as Pacific Ethanol (PEIX), VeraSun Energy (VSE) and Aventine Renewable Energy (AVR) - all were up on the day.ADM was up 1.71 percent to close at $35.66, while Pacific Ethanol closed at $7.84, up 3.16 percent, to lead their sectors. Among smaller-caps, MGP Ingredients was up 7.31 percent to $9.39, while Better Biodiesel (BBDS.OB) was down 20 percent to close at $1.20.
Oilsource forms JV with Abundant Biofuels to produce jatropha biodiesel in Colombia
October 30, 2007
In Colombia, Oilsource Holding Group has formed a joint venture with Abundant Biofuels to produce jatropha-based biodiesel in Colombia. The joint venture plans to plant 100,000 hectares with jatropha curcas, in an investment program totaling $45 million.
Recently, a study by the University of Wisconsin-Madison Nelson Institute for Environmental Studies ranked Malaysia, Thailand, Colombia, Uruguay and Ghana as the best developing nations for biodiesel investment, citing stability and agricultural potential as major factors.
Luis Alberto Moreno, the President of the Inter-American Development Bank, speaking at the Americas Conference in Miami, said “there is no region that can gain more from biofuels than Latin America and of climate change is a big risk.”
Moreno projected a 4.5% GDP growth for Latin America in 2007 and 2008, down from 5% in 2006, but he said that “The result of good macroeconomics is that many Latin Americans to the verge of joining the middle class.” He said that the pending trade deals with Colombia, Panama and Peru will have tremendous impact in Latin America.
The Colorado Center for Biorefining and Biofuels awards $500,000 in research grants
October 30, 2007
The Colorado Center for Biorefining and Biofuels awarded grants of $50,000 to 10 renewable-energy projects, including five to research teams from CU-Boulder, two each to teams from CSU and and the Colorado School of Mines, and one from NREL.
The Colorado Center for Biorefining and Biofuels is a joint venture of the University of Colorado at Boulder, Colorado State University, the Colorado School of Mines and the National Renewable Energy Laboratory, and 27 energy-industry companies.
European Commission reportedly considering biofuel crop subsidy cut
October 30, 2007
The European Commission (EC) is planning to cut biofuels crop subsidies, according to Sega. The program of 45 euro per hectare subsidies was initiated when 310,000 hectares had been devoted to biofuels. In 2007, the figure has jumped to 2,840,000 hectares.
The new Transatlantic Economic Council (TEC), which meets in Washington in November, is expected to propose definitive standards for biofuels trade. Recently, numerous European biodiesel producers have reduced capacity or shut down due to competition from subsidized soybean-based biodiesel from the United States. The European Biodiesel Board points out that biodiesel producers in the US receive a subsidy of up to $300 per ton, and that as a result, US producers can export to Europe for less than the cost that Europeans pay for raw materials.
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