Today in Biofuels: 2008 Ethanol Outlook released for download; wheat soars 25 percent after Kazakhstan shutoff of exports; palm, corn soar to 52-week highs; BioWillie now available in Texas

Top Story:

The Renewable Fuels Association has released the Ethanol Industry Outlook 2008 entitled “Changing the Climate.” The Outlook provides historical stats and forecasts including production forecasts, feedstock utilization, water usage, economic contributions and environmental benefits.  The Outlook is being released in conjunction with the opening of the RFA’s annual Ethanol Conference in Orlando. A PDF 2008 Ethanol Industry Outlook can be downloaded here.

Producer News:

In Arizona, PetroSun BioFuels has acquired fifty percent of Fleet Biodiesel, majority owner of the Eagle Biodiesel project in Bridgeport, Alabama. The 0.7 Mgy Eagle Biodiesel plant intends to increase production capacity to 50 Mgy.

In New York, GreenShift Corporation has commenced extraction of corn oil from distillers grains, produced by the Western New York Energy 50 Mgy corn ethanol plant in Medina. Western New York Energy opened last December and is the first ethanol plant to operation the northeastern US.  operations in December 2007 and is the first operating ethanol plant in the Northeastern U.S.

International News:

In England, Future Capital announced plans to raise $275 million for construction of two wheat ethanol plant in Grimsby and Teeside, with a planned capacity of 95 Mgy, or one-third of projected English ethanol demand. The Renewable Fuel Obligation requires that 5 percent of British motor fuel be obtained from renewable sources by 2010. A number of ethanol projects have been announced as a result of the RFO, including a project in Wilton and a British Sugar/BP joint venture near Hull.

In New Zealand, Solid Energy will expand its renewables capacity with a new biomass facility in Taupo that will ultimately generate 150,000 tonnes per year of wood pellet fuel. The plant is scheduled to be operational in 2009, with initial capacity of 60,000 tonnes per year. The company has current capacity of 60,000 tonnes at its plants in Rotarua and Rolleston.

In Canada, the provincial government has relaxed the rules for participating in the Sask Biofuels Investment Opportunity (SaskBio) Program, which provides loans of up to $10 million for biomass-relatrd projects. The minimum farmer / community investment has been reduced  from 50 percent to 20 percent, minimum loan contribution will increase from 2 cents to five cents per liter, and eligibility has been expanded to “anyone living or doing business in Saskatchewan.”

The EU is facing a stalemate over implementation of biofuels sustainability standards.  The European Parliament wants sustainability criteria to be included in the EU Fuel Quality Directive, while the European Commission said that the criteria is already included in the January 23rd directive on renewables, which instructed that 10% of all transport fuel consumption in the EU be sourced from biofuels by 2020. The EU has agreed that biofuels must deliver a life-cycle CO2 savings of 35 percent to count towards the 10 percent target.

The Nigerian National Petroleum Company (NNPC) has approved development of the first commercial-scale plant in Nigeria. The Ondo state project will produce 145 Mgy of ethanol. Feedstock was not disclosed, but cassava has been reportedly the prime feedstock candidate.

Research News:

At the Chicago Board of Trade, wheat traded at an all-time high of $12 per bushel, surging more than 25 percent after Kazakhstan announced it would impose export tariffs to reduce exports after consumer prices for wheat rose more than 20 percent in 2007. Wheat reserves are expected to fall to 109 million bushels, the lowest figures since the 1970s. Spring wheat rose to more than $24 per bushel, while ethanol corn use is expected to increase by 28 percent to 4.1 million bushels, pushing corn futures fro the May contract to $5.5275 a bushel. Palm oil surged 6 percent to a record high on the Bursa Malaysia derivatives exchange, with the benchmark May contract reaching $1216.  Strong demand from China and India for palm oil is causing the price escalation.

Policy and Policymakers:

The Association of Nebraska Ethanol Producers has launched, with a goal of promoting pro-ethanol legislation and public awareness and support.  Organizers say that Nebraskan biofuel producers are facing tough legislative challenges and needed to band together to speak with one unified voice.

In Illinois, a state law will go into effect July 1 requiring labeling of all pumps selling B6 to B20 blended biodiesel. The move is supported by the Illinois Soybean Association to promote awareness of biodiesel. Illinois is the largest consumer of biodiesel among US states, but awareness has been low to date because B1-B20 blends were unlabeled.

Consumer and Fleet News:

In Texas, Willie’s Place at Carl’s Corner will open south of Dallas, in Hillsboro. The biodiesel truck stop will feature Willie Nelson’s BioWillie branded biodiesel, two restaurants, a convenience store, a saloon and a gift shop selling Willie Nelson merchandise. The exclusive rights to BioWillie are owned by Earth Biofuels, which recently announced it had secured an undisclosed amount of financing to complete construction of its signature biodiesel station.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, recovered 0.46 percent Monday to close at 125.08 as diversified agribusiness strengthened while ethanol stocks continued on a general downswing.  For the day, The Andersons (ANDE) gained 3.73 percent to lead diversified agribusiness stocks.  Among ethanol stocks, Aventine Renewable Energy (AVR) fell another 6.05 percent to $6.52 after Goldman Sachs downgraded the stock to “sell”, but Pacific Ethanol (PEIX) was up 5.26 percent to $5.80. Among small caps, Environmental Power (EPG) rose 4.95 percent to close at $4.88.  For the day, declines led advances 2 to 1.

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