Today in Biofuels: EU reaffirms 10 percent biofuel target; Xethanol shelves 35 Mgy plant in Iowa; stunt pilot says ethanol within 3 percent of avgas fuel aconomy

April 14, 2008

Top Story:

The EU Environment Commissioner reaffirmed that the EU can reach its 10 percent biofuels target without affecting food prices or rainforests. Stavros Dimas affirmed the targets as the French agriculture minister called for a world initiative on agriculture with an “absolute priority” on food production,Â and as India’s prime minister Singh has banned the use of food grains in the production of biofuels, committing to produce fuels in waste areas using crops such as jatropha.

Producer News:

In Iowa, Xethanol has shelved plans for a 35 Mgy corn ethanol plant in Blairstown, citing high commodity prices and disarray in the financial markets. Xethanol originally broke ground on the plant in 2006 and expected to open the facility in 2007, but this week took an impairment charge for $2.6 million invested to date in the plant.

In New York, Albany Renewable Energy is facing challenges on its $350 million ethanol plant in the Albany Port District based on reduced margins from ethanol operations and rising construction costs. In addition to the fast-rising price of corn, ethanol production utilizes 35,000 BTUs of natural gas per gallon produced, and 1.1 KWh of electricity, and costs for both are under pressure. The Albany plant was designed to produce ethanol as a substitute for MTBE, which reduces smog when combined with gasoline but has proven to be a carcinogen.

International News:

In New Zealand, Pure Power Technology expects to have a pilot plant operating by spring 2009 to produce ethanol from cane willow. A biofuel company planning to produce ethanol from a type of willow expects to have a pilot processing refinery operating within a year.

In the Netherlands, Brazilian President Luiz Inacio Lula da Silva signed an agreement with Dutch Prime Minister Jan Peter Balkenende for cooperation on the sustainable development of biofuels.

In the UK, a Greenpeace investigation into biodiesel sold by the Tesco chain has revealed that 30 percent of its biodiesel contains palm oil, despite initial denials from Tesco that “The feedstock we use is rapeseed and soy. There is no palm oil whatsoever.â€ Tesco later said that its fuel supplier, Greenergy, was responsible for feedstock selection; Tesco owns 25 percent of the company.

World Opinion:

Canada’s National Post wrote: “Four years ago, Dennis Avery warned that, as Western governments fell head over heels for biofuels, passing laws forcing consumers to buy them, ‘U.S. farmers, who should be exporting food to densely populated Asian countries with rising incomes, will instead turn their corn into ethanol . . . without benefit to the environment.‘… He takes no pleasure in knowing his prophecies have come to pass. After all, even he didn’t realize things would happen as quickly as they have. “I knew it would be bad. But I would never have believed it would get this bad this quickly,” he says. “It’s appalling.”

The Boston Globe writes: “Corn should be used for food, not motor fuel…Candidates for president need to tell Americans the truth about ethanol, but they are falling over themselves in pursuit of the farm belt vote.”

Canada.com writes: “With the price of oil hovering around $100 per barrel and the amount we pay at the pumps also on the rise, it is becoming obvious that we simply must grow beyond oil as our only source of transportation fuel…Alberta can fortify its position as a leading worldwide energy producer by combining its oil and agriculture industries to form a larger, better integrated and more powerful energy sector.”

Globe Investor writes: “Surging food prices, now at 30-year highs, are actually a relatively new phenomenon. In the past year or so, the price curve has gone nearly vertical…prompting countries such as Egypt, Vietnam and India to eliminate or substantially reduce rice exports to keep a lid on prices and prevent rioting. But, by reducing global supply, this only increases prices for food-importing countries, many of them in West Africa.

Research News:

The Montana Farm Bureau Federation has lashed out at media reports linking the rise in food prices to ethanol. MFBF President Dave McClure told Western Farm Stockman that “less than 10% of the U.S. corn crop is used for corn-based foods consumed by humans, such as corn meal, cornstarch and breakfast cereals,”Â and that grains account for 2 percent of the cost of corn flakes and 16 cents of the cost of a loaf of bread. Runaway energy prices, he said, are the culprit.

Policy and Policymakers:

In Washington, a group of Finance ministers at World Bank and International Monetary Fund meetings exchanged sharp words over biofuels as food riots continue to erupt in Egypt, Cameroon, Ivory Coast, Senegal and Ethiopia, and troops are guarding food stocks in Pakistan and Thailand. “it’s a crime against humanity that food should be diverted to biofuels,” said India’s finance minister, Palaniappan Chidambaram, said, while the chairman of the James White House council on environmental quality said biofuels are only a part of the food price equation.

Consumer and Fleet News:

In South Carolina, a fight has erupted between the S.C. Petroleum Marketers Association and major oil companies over who blends ethanol and receives a 5.1 cent per gallon tax credit. “This 5 cents a gallon is crucial to the survival of the smaller petroleum marketers here in the state,” Sam Bell, president of the SCPMA, told groupstate.com. “That’s a nickel that allows us to be competitive and goes back into our businesses and to our employees, and it stays in South Carolina’s economy. The big oil companies are going to take that away from us and it’s going to end up in London, Houston and The Netherlands.”

In Florida, the pilot of an ethanol-powered MX-2 aerobatic plane said that his plan uses three to six percent more ethanol fuel than aviation gas, adding that the plane has lower emissions and a cooler-running engine. The plane, sponsored by ethanol construction firm Fagen, has “Ethanol Kicks Gas” painted on its side.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, rose 0.60 percent to close at 119.92 as small cap gains offset agribusiness weakness.Â For the day, The Andersons (ANDE) fell 1.48 percent to $42.02, while VeraSun Energy (VSE) fell 4.88 percent to $7.02 amidst an ethanol slide.Â Â Among small caps, Bluefire Ethanol (BFRE) rose 31.75 percent to $4.15 rose 7.30 percent and Texcom (TEXC.PK) rose 16.67 percent to $0.07Â Â Overall, declines led advances 3 to 1 for the day.

Xethanol shelves 35 Mgy corn ethanol plant in Iowa, citing feedstock costs, tight credit

In Iowa, Xethanol has shelved plans for a 35 Mgy corn ethanol plant in Blairstown, citing high commodity prices and disarray in the financial markets. Xethanol originally broke ground on the plant in ...

Embraer’s Ipanema aircraft selling ethanol versions fast as ethanol / avgas price spread grows to 40 percent

In Brazil, Embraer subsidiary Neiva said that it had sold 50 ethanol-consuming Ipanema light aircraft, and more than 200 ethanol conversion kits. The company said that ethanol prices â€” 40 perce...

EU Agricultural Commissioner reaffirms 10 percent biofuels target for 2020

The EU Agriculture Commissioner, Mariann Fischer-Boel, reaffirmed the EU target of 10% of fuel consumption from biofuels by 2020. â€œWhile we take well-reasoned arguments extremely seriously, we ...

France reaffirms 7 percent biofuel target for 2010, eases planned ethanol tax hikes

In France, the national government has announced that it will reduce a planned tax increase on biofuels scheduled for 2009. The original tax proposal would have ushered in sharply increased ethanol ta...

Ireland lowers 2010 biofuels target to 3 percent from 5.75, citing price, emissions concerns; reaffirms 10 percent renewables target for 2020

In Ireland, the national government officially lowered the national biofuels target from 5.75 percent to 3 percent for 2010, citing price and sustainability concerns. The government, however, affirmed...

Stunt plant pilot says loss of fuel efficiency 3-6 percent from switch to ethanol

In Florida, the pilot of an ethanol-powered MX-2 aerobatic plane said that his plane uses three to six percent more ethanol fuel than aviation gas, adding that the plane has lower emissions and a cool...

Written by Jim Lane · Filed Under The Daily Biofuel Summary