Today in Biofuels: Do biofuels increase greenhouse gases by 93 percent?; Boeing says airlines will use 2G biofuels by 2013; E85 usage in Iowa only 0.1 percent after 2 years of promotion

Top Story:

The 93 percent increase in greenhouse gases predicted in two articles in Science magazine has begun to generate response.

Bob Dineen, the executive director of the Renewable Fuels Association, said: “It is important that we all take a step back and reflect on why we must aggressively deal with climate change. It’s because for more than 100 years we have burned fossil fuels like coal and oil without concern for the environmental consequences. This laissez faire attitude has [created] a “carbon debt” that can never be repaid. Failing to adopt technologies available today, like biofuels and improved gas mileage… relegates the world to more of the same…You must ask yourself, if not biofuels, what?”

The two papers in Science magazine have attempted to calculate the added effect of land-use conversion on the greenhouse gas emissions associated with biofuels, and concludes that production of almost all biofuels “resulted, directly or indirectly, intentionally or not, in new lands being cleared, either for food or fuel.”

Producer News:

In Ohio, PK Biodiesel held the grand opening for its 5 Mgy, soy-based biodiesel plant in Woodstock. The plant is reported to expand to a multi-feedstock approach. The plant is one of 57 biodiesel plants under construction in the US.

International News:

In the Philippines, UK-based Bronze Oak has formed a joint venture with Zabaleta and Co. to construct two sugarcane ethanol plants in the central and southern sectors of the Philippines. The $147.2 million investment will result in 30 Mgy plants at Southern Bukidnon and Pampanga.

In Spain, Abengoa said that it would open the 1.2 Mgy grain ethanol plant in Babilafuente, in central Salamanca province, but would not restart construction on a larger Babilafuente project doe to high feedstock prices and uncertain demand. The company continues to operate two plants in Coruna and Cartagena, and is building a 200,000 tonne biodiesel plant for Cepsa in San Roque, near Gibraltar.

In Malaysia, IJM Plantations will invest $185 million to develop land in East Kalimantan for palm oil production. The group has increased its plantations to 60,000 hectares in the past two years, and will add another 30,000 hectares with this development. 27,000 hectares are currently planted. The company is constructing a biodiesel plant in Sabah, and said that they are proceeding with construction and installation of a first processing module with 9 Mgy capacity.

In Italy, the Secretary General of the European Biodiesel Board said that European biodiesel production grew 10 percent in 2007, the worst in 10 years. Production grew 54 percent in 2006. Raffaello Garofalo said that biodiesel capacity was only 50 percent used in 2007, and blamed US dumping of biodiesel for the problems, and lack of support in EU countries for biofuels.

Research News:

The FAO has released a decision-support tool to assist countries in planning their entry in to biofuels production. The analytical framework allows government to assess biomass potential; biomass production costs; the economic bioenergy potential; macro-economic consequences; national and household-level impact and consequences on food security. The tool will be tested in Peru, Thailand and Tanzania – before it is is made available to the international community at large.

In Iowa, lawmakers expressed disappointment that, two years after landmark legislation was passed in support of E85 conversion, E85 represents only 0.1 percent of Iowa fuels sales. 7.5 percent of Iowa fuel comes from renewable sources, about the same as two years ago when Gov. Vilsak signed a measure allocating $13.6 million to E85 conversion, and mandating that 25 percent of the state’s fuel usage come from renewable sources by 2020. Lawmakers noted that E85 is available in half of Iowa’s counties, with only 100 pumps statewide, and that only 12 percent of new cars sold in Iowa last year are flex-fuel ready, mostly pickups and SUVs.

Policy and Policymakers:

The US Assistant Secretary for Energy Efficiency and Renewable Energy said that “well funded opposition and media campaigns gaining traction” are the biggest issues facing biofuels in 2008. Andrew Karsner was responding to a question posed on LinkedIn, a popular social networking site for businesspeople. The question asked “What is the single biggest issue facing biofuels in 2008? Is it production costs, project funding, legislation, adoption, or perhaps something else?”

In Washington, Senator Jeff Bingaman, chairman of the Senate Energy committee, is holding hearings aimed at deciding whether to delay implementation of the Renewable Fuel Standard, saying that he was confident that the ethanol industry could produce the 8.5 billion mandated gallons, but less sure that the infrastructure was in place for ethanol distribution to bring it to market. Charles Drevna, president of the National Petrochemical and Refiners Association, said that the Senate should have considered these issues before passing the Renewable Fuel Standard, and predicted that the cost of transporting biofuels would reach 13 to 18 cents per gallon.

In Minnesota, a bill was introduced in the state legislature to strengthen the environmental review process for new biofuel plant approvals. Rep. Ken Tschumper said, in introducing the bill, that he was concerned, among other issues, with the 2 billion gallons of groundwater usage by the state’s 17 ethanol plants. Other lawmakers said the proposal would leave first-generation biofuel plants untouched and only slow the conversion to second-generation plants by adding significant time and cost to their development process.

Consumer and Fleet News:

In Sydney, the Head of Environmental Strategy for Boeing said at a conference that he had “changed from being a skeptic to an enthusiastic supporter of sustainable biofuels,” and said that regular commercial services based on biofuels could be operating within five years. He said that the industry cannot use first-generation biofuels because of low energy content, and added that second-generation biofuels would avoid problems such as requiring large amounts of water or farmland. He predicted that the industry would grow all the feedstock needed for the airline industry in an area about 60 percent of the size of California’s San Bernardino County.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, gained 0.13 percent Friday to close at 117.12 as ethanol stocks fell, offsetting gains by large caps. For the day, diversified agribusiness The Andersons (ANDE) gained 0.49 percent to close at $47.12, while ethanol stock declines were led by Pacific Ethanol (PEIX), down 2.65 percent to $5.88 and Xethanol, down 8.33 percent to $0.55. Among small caps, Bio Solutions Manufacturing (BLSM.OB) recovered 16.00 percent to $0.0116 after a steep fall last Thursday. Overall, declines and advances were even for the day.

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