Today in Biofuels: GM says consumers don’t want diesel despite fuel economy; India biodiesel policy imminent; China to invest $5 billion in Indonesian crops, biodiesel

January 29, 2008

Top Story:

In Detroit, the vice chairman of General Motors said that only 1 in 12 consumers want modern diesel engines because they cost $3,000 to $4,000 per vehicle, and that the popularity of diesel engines in Germany is the result of punitive tax policies that skew the market, result in gasoline costing $8Â per gallon compared to $4 for diesel fuel. Bob Lutz, speaking at the Automotive News World Congress, said that natural market share of diesel is more like the 8-10 percent seen in Switzerland. Lutz added that GM is developing a full range of diesel vehicles but that ethanol had to be a priority for the car maker because of the popularity of the internal combustion engine.

Producer News:

In Iowa, the city of Des Moines has given Vision Fuels Des Moines an extension until June 1st to provide a financing commitment for their proposed $210 million corn ethanol plant, situated on 164 acres of city-owned land. The company has provided nearly $1 million in non-refundable deposits for the natural gas-powered plant that was first proposed in 2006.

In Wyoming, the KL Process Design cellulosic ethanol plant in Upton, near the Black Hills National Forest, will double its production to 2.5 Mgy of ethanol produced from waste wood chips. The company commenced production last March with an initial capacity of 1.5 Mgy, using waste wood from the forest floor as well as pine tress killed by insect infestations.

In Maryland, Chesapeake Biodiesel has proposed a 30 Mgy soybean oil biodiesel plant near Hagerstown, which will also produce approximately 100 million pounds of soybean meal. The company is investigating three potential sites, with a goal of opening by fall 2009.

International News:

In Brazil, the president of the sugar producers industry association, UNICA, said that bagasse could supply up 11.5 terawatts, or up to 15 percent of Brazil’s electricity by 2015. Bagasse is the waste biomass left over from sugar extraction. Today, the sugar industry supplies 1.6 terawatts, or about 2 percent of the country’s electricity needs.Â Marcos Jank said that burning more bagasse to generate electricity would complement the country’s hydroelectric projects because sugar cane harvests occur during the dry season, when hydro plants produce less power owing to reduced water levels.

In China, the country’s largest state oil company, Sinopec, said it will invest $5 billion in biofuel plants and crop development in Indonesia. The company will invest in jatropha and palm plantations and biodiesel plants in the country’s Papua and East Kalimantan provinces. The project is slated to begin later this year.

In India, Agriculture Minister Sharad Pawar will convene a Group of Ministers meeting aimed at making a decision on India’s biodiesel policy. Observers expect that a Biodiesel Board will be established to coordinate policy and provide stability for the market. In addition, the meeting is expected to produce a target of as much as 1.3 billion gallons of biodiesel per year. The Biodiesel Association of India has proposed a B5 mandate, a price reduction from the current $2.54 level, and a 30 percent subsidy on jatropha cultivation.

In Mozambique, President Armando Guebuza said that biofuel development will not dislodge Mozambican farmers from their lands. He said that government policy would require the use of underutilized or empty lands, would avoid using lands used for food production, and that Mozambique will refine its own raw materials.

Research News:

Corn futures at the Chicago Board of Trade have increased to $5 per bushel, prompting expectations of another big spring planting of corn. Last year, farmers planted record acreages of corn and produced a record 13.074 billion bushel corn crop. Despite the record production, reserve corn stocks only increased from 1.3 billion to 1.4 billion bushels, owning to strong ethanol producer demand as well as 2.45 billion bushels in export sales.

Policy and Policymakers:

In Washington, President George Bush delivered the annual State of the Union address, but for the first time since 2004 did not mention ethanol or biodiesel fuel by name. President Bush called for an international clean energy fund, for the inclusion of China and India in a new emissions treaty, and continued investment in renewable fuels.

Consumer and Fleet News:

In Utah, â€œFields of Fuelâ€, Josh Ticknellâ€™s documentary about biodiesel and Americaâ€™s need for fuel independence received the Audience Award for Best Documentary Film. â€œMay we work together to create a green and sustainable future,â€ Ticknell said in accepting his award.

In Colorado, Blue Sun will supply its Fusion 20 biodiesel to the 45-truck Corporate Express fleet in Colorado and Kansas. The company will use B20 in trucks built after 2004, and expects to record higher mileage as well as environmental benefits.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, rose 2.90 percent yesterday to 122.77 as diversified agribusiness and ethanol stocks all performed strongly at week’s open. For the day, sector giant Archer Daniels Midland (ADM) rose 2.83 percent to $43.30, while all ethanol stocks rose, paced by US BioEnergy (USBE) which closed at $8.07, up 5.63 percent. Among small caps, Xethanol (XNL) rose 9.09 percent to $0.72, while GreenShift (GSHF.OB) tumbled 9.89 percent to $0.0082. Overall, advances led declines by 3 to 1.

Indian biodiesel policy imminent; B5 mandate, 1.3 billion gallon market expected as ministers convene

In India, Agriculture Minister Sharad Pawar will convene a Group of Ministers meeting aimed at making a decision on India's biodiesel policy. Observers expect that a Biodiesel Board will be establishe...

New report projects Brazil, Russia, India, China biodiesel market to increase to $6 billion in 2012 from $577 million today

In India, Bharatbook.com has published a new report, “Biodiesel Industry in BRIC Markets” which projects that the biodiesel market in BRIC countries (Brazil, Russia, India and China) will reach $6...

Taiwan’s CPC plans entry into Indonesian jatropha market, says Indonesian trade official

In Indonesia, the Taiwanese mining and energy company CPC is planning to invest in Indonesia biodiesel, according to the Indonesian Trade and Economic Representative office in Taipei. The company is s...

India’s biodiesel chief says China pulling ahead, blames government disarray on policy

In India, the head of the country's national biodiesel association said that the lack of a national policy has put India behind China in biodiesel development. Sandeep Chaturvedi, head of the Biodi...

2007 Energy Bill imminent from Congress; 36 billion gallon Renewable Fuel Standard expected to survive

In Washington, agreement is reported to be imminent on the 2007 Energy Bill. The House and Senate have been working to reconcile the provisions in their respective bills since the summer. Reports from...

Indonesian energy minster says fossil fuel subsidies to consumers hamper biofuels development

In Indonesia, Energy and Mineral Resources Minister Purnomo Yusgiantoro said that Indonesia biofuels growth is hampered by fossil fuel subsidies to consumers. The President of Indonesia has stated ...

Written by Jim Lane · Filed Under The Daily Biofuel Summary