Today in Biofuels: China increase in meat consumption using 3X more grain than US ethanol industry; BP invests $560 million in Brazilian ethanol; Cosan buys 1500 ExxonMobil stations

April 25, 2008

Top Story:

The change in Chinese meat consumption habits since 1995 is diverting 8.0 billion bushels of grain to livestock feed â€” more than three times the entire 2.3 billion bushel harvest used to make US ethanol, a Biofuels Digest report on food and fuel concludes. The report also determined that: Mexican corn consumption has increased 57 percent since 1993, compared to a 19 percent increase in population.

Producer News:

In Illinois, Coskata announced that they will build their 40,000 gallon demonstration plant for cellulosic ethanol in Madison. The company’s process heats raw materials to 17800 degrees fahrenheit, then releases the material into a bioreactor where microbes convert the gas into ethanol, with a yield of 100 gallons per ton of feedstock at a cost of less than $1 per gallon.

In Iowa, Novozymes has established a new laboratory facility for ethanol production at the Iowa State University Research Park in Ames. Novozymes which supplies enzymes for conventional and cellulosic ethanol production, has additional facilities in California, Virginia and North Carolina.

International News:

In Brazil, Cosan has acquired ExxonMobil’s 1500 Brazilian service stations (under the Esso brand) in an $826 million deal. The company said that it is buying the stations to assure itself of a distribution network for its ethanol products. Ethanol consumption increased 29 percent since 2003 and last year exceeded gasoline sales. The deal gives Cosan a 7 percent share of retail fuel distribution in Brazil.

In Canada, Husky Energy opened its 34 Mgy wheat and corn ethanol plant in Minnedosa, Manitoba. The plant replaces an older 4 Mgy facility, and will also produce 126,000 tonnes of dried distillers grains for the feedstock market.

In Brazil, BP will invest $560 million for a 50 percent stake in Tropical Bioenergia, a joint venture with Santelisa Vale and Maeda Group that will build 370 Mgy in sugar cane ethanol capacity in Goias state.

In India, state oil company Bharat Petroleum announced a $66 million investment in a joint venture with Shapoorji Pallonji and Nandan Biomatrix to produce jatropha-based biodiesel. The company expect to build 10 biodiesel plants within a 10-year period, from jatropha harvested in Uttar Pradesh, with a planned capacity of 300 Mgy.

In China, China Clean Energy halted all biodiesel production in its Fujian province operations owing to increased feedstock prices and biodiesel price controls. The company uses yellow grease, cotton seed waste and rapeseed waste, and saw costs rise to $500 per ton, up from $368 per ton in the 4th quarter of 2007.

World Opinion:

The Portland Tribune carried an article by the Special Assistant to the Director of the Oregon Department of Agriculture, saying that “corn ethanol, or biofuels in general…are not the primary cause of recent food price increases…the 4 percent to 5 percent increases in food prices during the last year can be broken down as follows: 0.2 percent to 0.3 percent due to ethanol use of corn, 0.8 percent to 1 percent due to gasoline/fuel price increases, 3.5 percent to 4 percent due to other causes.

Missouri Governor Matt Blunt told the News Leader that “the state’s ethanol mandate has nothing to do with the rising cost of food and feed for raising livestock…soaring grocery bills are caused by the “rapidly escalating worldwide demand for food”…As more people on that planet “try to eat like Americans, food’s going to become more expensive.”

The National Review writes: “The federal government can do something right now to provide relief to Americans facing higher food prices: Repeal the ethanol mandate. …Wal-Martâ€™s Samâ€™s Club has started limiting sales of rice because immigrants are buying all the rice they can and sending it to relatives in countries suffering from food shortages.”

Research News:

A research team at the Oak Ridge National Laboratory said that improvements in crop management and the planting of perennials such as switchgrass could ease hypoxia levels in the Gulf of Mexico, which has a 6,000 mile “death zone” west of the mouth of the Mississippi River.

Policy and Policymakers:

In Texas, the office of the Governor indicated that the state is expected to seek a waiver from implementation of the Renewable Fuel Standard due to rising food costs. “Ultimately, food prices are reaching high levels, so we’re looking at this as an option for reducing that burden,” said Allison Castle, a spokeswoman for Gov. Perry, told cattlenetwork.com.

Consumer and Fleet News:

A Peter D. Hart poll concluded that US consumers rate energy issues as “very serious”, higher than concerns about schools, job security, the mortgage crisis or global warming, and behind only the war in Iraq and heath insurance costs as key issues this year. 51 percent of consumers said that investment in alternative energy is the best way to solve the problem, while 28 percent selected energy efficiency and 17 percent said more domestic drilling for fossil fuels.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, fell 2.38 percent to close at 127.58, on a fall in agribusiness offset by ethanol gains. For the day, Archer Daniels Midland (ADM) fell 2.54 percent to $46.13, while Aventine Renewable Energy (AVR) rallied 4.39 percent to $4.04. Among small caps, BioSolutions Manufacturing (BSLM.OB) lost 40.00 percent to close at $0.003. Overall, declines led advances 5 to 3 for the day.

Cosan expects to double sugar cane ethanol exports to US in 08/09

In Brazil, Cosan said that it expected to double its sugarcane ethanol exports to the US in the 2008/09 cane season, and that exports would account for 25 percent of sales, up from 20 percent today. T...

Cosan buys 1500 ExxonMobil stations in Brazil for $826 million

In Brazil, Cosan has acquired ExxonMobil's 1500 Brazilian service stations (under the Esso brand) in an $826 million deal. The company said that it is buying the stations to assure itself of a distrib...

Brazilian analyst says ethanol production will double, industry will shrink from 200 to 30 competitors by 2015

In Brazil, analyst Julio Maria Borges has projected that Brazilian sugar cane output will double by 2015, but the industry will consolidate from 200 producers to 30, as producers vertically integrate ...

Brazilian ethanol makers incensed by increased gasoline subsidies; last gas price rise 2005

In Brazil, the ethanol industry is up in arms after the federal government lowered a gasoline tax, making gasoline more affordable and reducing the spread between ethanol and gasoline prices that driv...

Chinese government quietly buying arable land abroad as Chinese grain consumption soars

According to Izvestia, the Russian newspaper, and other sources, the Chinese government has commenced buying land abroad, after internal projections showed that the nation's growth in grain consumptio...

China’s increase in meat consumption using 3 times more grain than US ethanol industry, Biofuels Digest study reports

The change in Chinese meat consumption habits since 1995 is diverting 8.0 billion bushels of grain to livestock feed â€” more than the entire 2.3 billion bushel harvest used to make US ethanol. ...

Written by Jim Lane · Filed Under The Daily Biofuel Summary