“Over my dead body” says Senator Ben Nelson to Bush proposal for ethanol tariff reform
January 31, 2008
In Washington, Midwestern lawmakers have vehemently opposed moves by the Bush administration to reduce or eliminate the tariff on Brazilian ethanol imports. Sen. Chuck Grassley, the ranking Republican on the Senate Finance Committee, said on he opposed the Bush administration move, while Sen. Ben Nelson of Nebraska said the protection for US ethanol would be eliminated “over my dead body”.
Earlier this week, U.S. Energy Secretary Sam Bodman, commenting on the future of the ethanol tariff, said that the Bush Administration “will start to deal with that question” in the 2009 US Budget that the President will send to Congress on Monday. The 54-cent tariff, which primarily applies to Brazilian ethanol, tariff is due to expire at the end of this year.
Critics say that it should not be renewed in order to reduce ethanol prices and bring more supply to East Coast markets. Bodman did not comment on the 51-cent per gallon ethanol subsidy, which will not expire until 2010.
In New York this month, Sen. Charles Schumer (D-N.Y.) said that he would introduce a bill to temporarily repeal the ethanol tariff, to make more corn available for dairy farmers and reduce milk prices. He noted that milk prices have increased 38 percent in the past year in New York, and that the ethanol tariff of 54 cents on every gallon of imported ethanol, had made the problem worse. The ethanol tariff, he pointed out, was established in 1980 when ethanol production was negligible, but that production had increased to more than 7 billion gallons in 2007.
Last month, the Brazilian Foreign Minister, Celso Amorim, said that “if we want to be serious about climate change, trade barriers must be removed promptly and unconditionally.” He added criticism of the United States for not signing the Kyoto Treaty.
President Bush affirmed last March that the tariff on Brazilian ethanol would remain in place until 2009.
Finnish consortium to produce ethanol from paper, cardboard, wood and plastic
January 31, 2008
In Finland, UPM-Kymmene and waste management company Lassila & Tikanoja announced that, in conjunction with the Technical Research Centre of Finland (VTT), they had developed an ethanol and energy generation concept using paper, cardboard, wood and plastic, and would begin testing at VTT’s Rajamäki unit.
Bureau of Indian Standards backs India’s move to 10 percent ethanol blending in October
January 31, 2008
In India, the Bureau of Indian Standards (BIS) has endorsed the increase of the ethanol blending mandate from 5% to 10 percent in October.
The Bureau will release its specification for E10 in March 2008. The country is scheduled to move to E10 in October 2008 at the beginning of the next sugar season.
Following the imposition of an E5 mandate in October, oil companies have blended only 58 million gallons, compared to the 145 million gallons required under the mandate.
Reports continue to pour in that India is far from ready for the E10 mandate. Oil companies were directed to commence blending E5 blending in October, but have not procured enough ethanol to meet the mandate.
Reports have been published stating that the industry have procured less than 40 million gallons towards their expanded ethanol goal for next year. Further, older vehicles will not be E10 compatible, and new cars from Suzuki and Hyundai are not E10 compatible also.
Currently, high oil prices and the Indian sugar glut is creating strong demand for ethanol plants among sugar producers and those affected by high oil prices.However, researchers indicate that India will need 4,000 liters of water for every liter of ethanol produced — acceptable for water-laden Brazil, but not viable in India given the looming water shortage. 60% of Indian water supply is currently diverted to human use, according to a International Water Management Institute study. The researchers point out that it will require 26% of India’s water supply to produce enough ethanol to meet a 10 percent mandate.
Minnesota corn ethanol project on hold due to economic conditions
January 31, 2008
In Minnesota, a proposed corn ethanol plant, in Watonwan County in the south-central part of the state, is on hold pending improvements in economic conditions. Watonwan Energy has pinned its development hopes on a reduction in corn prices, which topped $5 a barrel this week for the March contract at the Chicago Board of Trade.
Throughout the Midwest, numerous ethanol plant projects are stalled or canceled due to the recent downturn in ethanol margins or opposition by local officials.
In Minnesota, Agassiz Energy announced a suspension of its $115 million ethanol plant near Erskine late last year owing to financing difficulties associated with high corn costs and reduced ethanol prices.
Other projects which suspended construction, halted production, or were rejected by local officials in the Midwest include:Â Glacial Lakes Energy’s plant in Meckling, SD; Chippewa Valley’s 40 Mgy plant in Benson, MN; and the Alchem ethanol plant in Grafton, ND; the Global Renewable Energy plant was rejected narrowly by county officials; Heartland Energy’s proposed 55 Mgy plant in Pike County plant was unable to secure financing; Aventine Renewable Energy cancelled a 113 Mgy plant expansion in Pekin, and Alternative Energy has faced financing delays for its proposed plants in Kankakee and Greenville.
Today in Biofuels: US Budget to “deal with” Brazilian ethanol tariff; $114 million awarded to four US cellulosic ethanol projects; France may reverse biofuels policy
January 30, 2008
Top Story:
In Washington, U.S. Energy Secretary Sam Bodman, commenting on the future of the ethanol tariff, said that the Bush Administration “will start to deal with that question” in the 2009 US Budget due in Congress on Monday. The 54-cent tariff, which primarily applies to Brazilian ethanol, tariff is due to expire at the end of this year. Critics say that it should not be renewed in order to reduce ethanol prices and bring more supply to East Coast markets. Bodman did not comment on the 51-cent per gallon ethanol subsidy, which will not expire until 2010.
Producer News:
In Washington, the US Energy Department awarded $114 million in grants to cellulosic ethanol projects in Missouri, Oregon, Colorado and Wisconsin. The demonstration projects were proposed by ICM, for a plant in in St. Joseph, Mo.; Lignol Innovations, for a plant in Commerce City, Colo; Pacific Ethanol, for a plant in Boardman, Ore.; and Stora Enso North America for a plant in Wisconsin Rapids. Pacific Ethanol received $24.32 million, while the others received $30 million. Pacific Ethanol’s 2.7 Mgy plant will produce cellulosic ethanol from a process developed by BioGasol, which partnered with Pacific Ethanol and the Joint BioEnergy Institute on the project. JBI will provide enzyme technologies.
In Iowa, two coal-fired electricity plants, in Marshalltown and near Waterloo, have been proposed in order to provide electricity for the growing collection of Iowa ethanol plants. Critics say that ethanol’s need for coal-powered electricity makes the case that it is not a green fuel. Alliant Energy, co-owner of the Marshalltown project, said that the needs of the ethanol plants can only be solved at this point in time by nuclear, natural gas or coal, and that natural gas is not economical while nuclear has been taken off the table due to environmental concerns. The proposed plants would cost $1 billion each.
International News:
In India, the Biodiesel Association of India (BDAI) has called on the central government to place biodiesel in the “declared goods” category so that it will receive a uniform rate of taxation throughout the country. The BDAI also called on the government to encourage the use of B20 blends and exempt biodiesel used in those blends from taxation. Meanwhile, the president of the BDAI,  Sandeep Chaturvedi, said that the industry faces a feedstock shortage and is not utilizing full production capacity.
In Australia, Willmott Forests won a contract from the New South Wales government to expand a $60 million softwood processing plant at Bombala. Plant owners have indicated that they plant to produce ethanol, or supply waste timber biomass for ethanol production, as part of the vision for expansion project. Willmott Forests has a pilot ethanol project in place on the northern New South Wales coast.
In Hungary, the 150,000 tonne Rossi Biofuels biodiesel plant has commenced operations in Komárom. Austrian businessman Rudi Roth owns 75 percent of the $60 million project and joint venture partner MOL owns the remaining 25 percent. MOL will use 80 percent of the plant’s biodiesel at its refineries.
In Malaysia, the Sabah Land Development Board (SLDB) demonstrated jatropha biodiesel in a Toyota Land Cruiser trial conducted at the Sabah Development Corridor Expo. The SLDB has proposed expansion of jatropha capacity in Malaysia as a poverty-reduction program, saying that farmers could earn RM 1500 per month from farming 6-acre plots of jatropha curcus, from seedlings provided by Borneo Alam Ria Biomatrix. The SLDB general manager said that Nihon Biotech, Kelana Stabil and TKM Resources have indicated that they would invest up to RM 300 million in jatropha cultivation and would purchase the fuel for export to the US, Japan and South Korea.
In Sudan, the government expects to adopt an alternative energy bill before August. To brief legislators, a parliamentary committee on industry visited the Kenana sugar facility in Khartoum. Kenan, Giad and the ministry of Energy have proposed a Sudanese energy project with an undisclosed location and capacity.
Research News:
The US Energy Information Administration said that U.S. ethanol supplies increased 14 percent in November to 11,194,000 barrels, as the result of a 45 percent increase in ethanol production capacity over the past 12 months.
Tyson Foods blamed ethanol for a drop in profits of 10 cents a share, or $23 million, in its first fiscal quarter, and the company said that uncertainty over grain prices made it impossible for the company to issue earnings guidance to analysts. Tyson said that its costs rose 3.9 percent in the first quarter compared to the same period last year, while sales increased 3.2 percent. Ethanol was priced at $2.202 yesterday at the Chicago Board of Trade, while corn closed at $5.02 per bushel for the March contract.
Policy and Policymakers:
In France, the central government is considering a reversal of its biofuels policy because of protests from environmental and food-related groups. The government is reported to have asked the French energy agency, ADEME, to review French policy in light of protests and advances in second-generation biofuels. France had previously set a policy that 7 percent of all fuels must come from renewable sources by 2010, and 10 percent by 2015 — ahead of the requirements of new EU laws.
Consumer and Fleet News:
The Corvette Racing team will convert to E85 ethanol for the 2008 American Le Mans season, using cellulosic ethanol produced by KL Process Design Group from wood waste. The fuel will debut at the Mobil 1 Twelve Hours of Sebring in March.
Financial News:
The Biofuels Digest Indexâ„¢ (BDI), a basket of publicly traded biofuel stocks, fell 0.71 percent yesterday to 121.90 in mixed trading. For the day, The Andersons (ANDE) led diversified agribusiness, up 0.61 percent to $46.02, while Archer Daniels Midland (ADM) fell 0.83 percent t $42.94. Most ethanol stocks rose, paced by VeraSun Energy (VSE), which rose 1.76 percent to close at $10.40. Among small caps, Green Energy Resources (GRGR.PK) rose 11.54 percent to $0.145 while Texcom (TEXC.PK) was off 11.11 percent to $0.08. Overall, declines led advances 5 to 4.
US Energy Secretary says new US budget, due Monday, will “deal with” Brazilian ethanol tariff
January 30, 2008
In Washington, U.S. Energy Secretary Sam Bodman, commenting on the future of the ethanol tariff, said that the Bush Administration “will start to deal with that question” in the 2009 US Budget that the President will send to Congress on Monday. The 54-cent tariff, which primarily applies to Brazilian ethanol, tariff is due to expire at the end of this year.
Critics say that it should not be renewed in order to reduce ethanol prices and bring more supply to East Coast markets. Bodman did not comment on the 51-cent per gallon ethanol subsidy, which will not expire until 2010.
In New York this month, Sen. Charles Schumer (D-N.Y.) said that he would introduce a bill to temporarily repeal the ethanol tariff, to make more corn available for dairy farmers and reduce milk prices. He noted that milk prices have increased 38 percent in the past year in New York, and that the ethanol tariff of 54 cents on every gallon of imported ethanol, had made the problem worse. The ethanol tariff, he pointed out, was established in 1980 when ethanol production was negligible, but that production had increased to more than 7 billion gallons in 2007.
Last month, the Brazilian Foreign Minister, Celso Amorim, said that “if we want to be serious about climate change, trade barriers must be removed promptly and unconditionally.” He added criticism of the United States for not signing the Kyoto Treaty.
President Bush affirmed in March that the tariff on Brazilian ethanol would remain in place until 2009. Earlier in December, Brazil accused the United States and Europe of having a “biased and protectionist agenda” at the World Trade Organization. Brazil was criticizing a proposed compromise on commercial rules which it said are biased towards the US.
The offer from the US and the European Union was to exempt 43 “green products” from trade tariffs to stimulate use of climate-friendly products, but excluded ethanol and other goods primarily produced in Brazil.
Malaysia’s Sabah state demonstrates jatropha biodiesel in Toyota Land Cruiser; $300 million investment possible for US, Japan, South Korea export market
January 30, 2008
In Malaysia, the Sabah Land Development Board (SLDB) demonstrated jatropha biodiesel in a Toyota Land Cruiser trial conducted at the Sabah Development Corridor Expo. The SLDB has proposed expansion of jatropha capacity in Malaysia as a poverty-reduction program, saying that farmers could earn RM 1500 per month from farming 6-acre plots of jatropha curcus, from seedlings provided by Borneo Alam Ria Biomatrix.
The SLDB general manager said that Nihon Biotech, Kelana Stabil and TKM Resources have indicated that they would invest up to RM 300 million in jatropha cultivation and would purchase the fuel for export to the US, Japan and South Korea.
Sabah also announced this month that it would seek $304 million over 18 years from the Federal Government to assist in the development of its Palm Oil Industrial Cluster (POIC) in Lahad Datu.
Sabah has also been actively promoting a biodiversity bank project. Last year, New Forests and the Sabah state government agreed on the establishment of a conservation bank for the region. Under the agreement, palm oil producers will purchase biodiversity credits from the group in return for the right to expand their production.In turn, the bank will invest those credits in biodiversity projects and plantations, The immediate beneficiary is the 34,000 hectare Malua Forest Reserve, home to several endangered species including orangutans.
France may reverse on biofuels following food, environmental sector protests
January 30, 2008
In France, the central government is considering a reversal of its biofuels policy because of protests from environmental and food-related groups. The government is reported to have asked the French energy agency, ADEME, to review French policy in light of protests and advances in second-generation biofuels.
France had previously set a policy that 7 percent of all fuels must come from renewable sources by 2010, and 10 percent by 2015 — ahead of the requirements of new EU laws.
Last November, the French Government began withdrawing support for ethanol when it floated a plan to wind down ethanol subsidies. France had offered a lower tax on ethanol-blended fuel, which makes it competitive with gasoline.
In a related move, the European Union reduced subsidies late last year for biofuel crop cultivation after production reached the 2 million hectare threshold. Under the EU program, farmers may receive up to 45 euros per hectare devoted to biofuel cultivation, up to a total of 2 million acres, and 31.5 euros for additional hectares.
Despite the waning support from government, Ernst & Young’s Biofuels Country Attractiveness Indices for 2007 ranked France second for biodiesel and fourth for ethanol. Initiatives such as the Grenelle de l’environment scheme, which sets a CO2 reduction goals, were credited with helping to create an attractive investment environment.
US Department of Energy awards $114 million to four cellulosic ethanol projects in Missouri, Colorado, Oregon and Wisconsin
January 30, 2008
In Washington, the US Energy Department awarded $114 million in grants to cellulosic ethanol projects in Missouri, Oregon, Colorado and Wisconsin.
The demonstration projects were proposed by ICM, for a plant in in St. Joseph, Missouri; Lignol Innovations, for a plant in Commerce City, Colorado; Pacific Ethanol, for a plant in Boardman, Oregon; and Stora Enso North America for a plant in Wisconsin Rapids, Wisconsin. Pacific Ethanol received $24.32 million, while the others received $30 million.
Pacific Ethanol’s 2.7 Mgy plant will produce cellulosic ethanol from a process developed by BioGasol, which partnered with Pacific Ethanol and the Joint BioEnergy Institute on the project. JBEI will provide enzyme technologies.
Last February, the Department of Energy awarded $385 million to six cellulosic ethanol projects. They were Abengoa Bioenergy Biomass of Kansas, for a facility in Colwich, Kansas; ALICO Inc., for a facility in LaBelle, Florida; BlueFire Ethanol, for a facility located in Corona, California; POET, for their “project liberty†facility in Emmetsburg, Iowa; Iogen Biorefinery Partners, for a facility in Idaho Falls, Idaho; and Range Fuels, for a facility in Soperton, Georgia.
The Energy Policy Act of 2005 had directed the Department of Energy to solicit proposals for commercial demonstration of advanced biorefineries that use cellulosic feedstocks to produce ethanol and co-produce bioproducts and electricity. The solicitation closed on August 10, 2006. The private sector shared 60 percent of the respective project costs, meaning that DOE’s funding leveraged over $1.2 billion in total investment in the projects.
The other notable award activity by the DOE has been in funding national research laboratory efforts.
In California late last year, DOE and BP co-funded the Joint BioEnergy Institute, or JBEI, located at a new $135 million, 65,000 square foot biofuels lab at the Lawrence Berkeley National Laboratory (LBNL) in Emeryville. The Emeryville lab fuses the research efforts of UC-Berkeley, UC- Davis, the Carnegie Institution for Science, Lawrence Berkeley National Laboratory, Lawrence Livermore and Sandia.
The lab is focusing on cellulosic ethanol research including feedstocks such as rice straw, switchgrass and Arabidopsis, a plant in the mustard family. The lab will also research microbes found in the termite gut of the common termite, which assist in breaking down wood into edible sugars.
India’s biodiesel association calls for more B20 blending, tax exemption to stimulate industry
January 30, 2008
In India, the Biodiesel Association of India (BDAI) has called on the central government to place biodiesel in the “declared goods” category so that it will receive a uniform rate of taxation throughout the country.
The BDAI also called on the government to encourage the use of B20 blends and exempt biodiesel used in those blends from taxation. Meanwhile, the president of the BDAI, Sandeep Chaturvedi, said that the industry faces a feedstock shortage and is not utilizing full production capacity. At other times, BDAI has proposed a B5 mandate, a price reduction from the current $2.54 level, and a 30 percent subsidy on jatropha cultivation.
Earlier this week, Biofuels Digest reported that Indian 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.
Until now, although India has been a leader in jatropha-based research, most Indian biofuels activity has been on the ethanol side, although D1 Williamson Magor Biofuels announced that it would invest $89 million in jatropha plantations and a biodiesel plant, with an eventual ambition of a 55,000 hectare jatropha plantation in eastern India.
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