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Brazil’s Brenco projects $3.2 billion from IPO this year or in 2009

In Brazil, Brenco said that it expects to raise $3.2 billion from an IPO no later than 2009, and will use the proceeds to construct 10 ethanol plants by 2015 with a planned capacity of 1 billion gallons per year. The company has invested more than $1 billion to date in the construction of four plants in Mato Grosso, Mato Grosso do Sul and Goias, from proceeds of private placements that have snagged investors such as Bill and Hillary Clinton, Vinod Khosla, Ron Burkle, and Goldman Sachs. The company will construct a 650-mile pipeline from Mato Grosso to Santos in an additional $1 billion investment.

A Brenco plant connected to an investment group including former US President Bill Clinton has been described as providing “degrading” conditions for its field workers. Brazil Renewable Energy, or Brenco, said that it was addressing the problems. President Clinton and his wife Sen. Hillary Rodham Clinton have an investment listed at between $15,000 and $50,000 in the plant, through the Yucaipa Company controlled by Ron Burkle. Yucaipa owns 2.8 percent of Brenco.

Burkle has raised more than $100,000 for the Clinton presidential campaign, and Senator Clinton has sponsored legislation to provide massive government investments in ethanol. Yucaipa has, in turn, invested in numerous ethanol companies, including Cilion.

Former US President Bill Clinton’s Clinton Global Initiative, is highly active in international biofuel policy, and his ties to Ron Burkle’s interested have been widely reported. However, the Clintons reduced ties with Burkle as the campaign got underway. President Clinton’s Vice-President, Al Gore, recently won the Nobel Peace Prize for his activities in behalf of climate change.

Monsanto, Mendel partner to develop high-yield Chinese miscanthus for US market

Monsanto will provide crop-testing, breeding and seed-production services to the Bioenergy Seeds & Feedstocks unit of Mendel Biotechnology in new partnership just announced. Mendel will apply the techniques to unique Chinese strains of miscanthus it owns, in hopes of introducing high yield biofuel miscanthus to the US market. Both Monsanto and BP own stakes in Mendel.

The head of Monsanto said last fall that there there should not be a food versus fuel debate, but a food and fuel effort focused on increased yields. He said that yields in some parts of the world are only 10 percent of US yields, and that an improved regulatory environment in, for example, Africa, would pave the way to improved crop productivity.

He said that developing drought-resistant strains of corn and providing conventional corn hybrids to developing nations should be a priority. He warned that, without a biotechnology approval process in place, Africa would never catch up to the developed world in crop yields.

The remarks come as the heads of Brazil, India and South Africa commence their IBSA meeting to coordinate development of South-South trade and as Brazil’s president Luis Igacio Lula da Silva concludes a four-country African tour aimed at promoting biofuels and signing trade and development agreements.
Recently, Monsanto predicted that corn yields will reach 300 bushels per acre by 2030, vs 155.8 projected for this year’s harvest. The company projects increases from molecular breeding and other biotechnologies will produce the gains.

Norway’s Statoil Hydro to produce biodiesel in Angola

In Angola, Norwegeian oil company StatoilHydro announced a partnership with Sonangol to produce biodiesel, as soon as Angolan legislation clears the way for the venture. Capacity and timelines were not disclosed; Statoil has been long active in Angolan oil exploration.

Last year, in another Portuguese-language development, StatoilHydro and Brazil’s Petrobras signed an agreement for joint biofuel ventures. The involves both development opportunities in Brazil and internationally. The two state-owned energy companies are partners on oil projects in Brazil, Nigeria and in the Gulf of Mexico. The partnership will include investment in Brazilian biofuel projects.

UK Transport company switches 15-truck fleet to ‘pure plant oil’, Verdent Fuel, to reduce GGEs 70 percent

UK transport company H. Wragg Transport has converted its fleet of fifteen 44-tonne tractor units to Verdant Fuel, a canola-based fuel oil which achieves 70 percent reductions in greenhouse gas emissions. The “pure plant oil” was evaluated in a pilot test before full conversion. The trucks have been modified to hold secondary tanks, so that they start on conventional diesel and switch over during operation to running biofuels.

In recent months, the UK biodiesel business has been winding down i the face of US competition. Recently, D1 Oils completed a $32 million capital raise, primarily from existing shareholders, and said it would exit the UK biodiesel refining business and concentrate on its plantation and science businesses, including its JV with BP.

“We believe that UK (biodiesel) demand will largely be met by subsidized US imports. We do not see the UK as offering a viable location for refining and trading to meet domestic demand for the foreseeable future,” the company said in a statement. The company will close or sell its two UK plants, affecting 80 staff.

Biofuels Digest Index gains 0.21 percent on agribusiness gain; Archer Daniels Midland reports 42 percent earnings growth

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, gained 0.21 percent to close at 131.33, on gains in agribusiness offset by ethanol setbacks. For the day, The Andersons (ANDE) rose 1.36 percent to $46.25, while Pacific Ethanol fell 5.58 percent to $3.72 to lead the ethanol downtrend. Among small caps, Earth Biofuels (EBOF.OB) gained 13.81 percent to close at $0.0239. Overall, advances and declines were even for the day.

In related news, Archer Daniles Midland reported results today for the quarter ending March 31. Net earnings increased 42 % to $517 million ($0.80 per share) from $ 363 million  last year. Sales were up 64 percent to $18.7 billion.

“ADM’s third-quarter performance demonstrates the ability of our balanced operations, global network and solid balance sheet to deliver strong results amid fluid markets,” said Patricia Woertz, Chairman and CEO. “Volatility in commodity markets presented unprecedented opportunities. Once again, our team leveraged our financial flexibility and global asset base to capture those opportunities to deliver shareholder value.”

Indiana Ethanol Power moves to contract stage on 20 Mgy solid-waste-to-ethanol plant

Indiana Ethanol Power has commenced contract negotiations with Lake County Solid Waste Management District for its proposed 20 Mgy waste-to-ethanol plant. The plant will use the GeneSyst process to convert solid waste to ethanol. Construction is expected to commence in 2008, and production in 2010.

Waste-to-ethanol projects have been increasingly visible in recent months.

• In New York, Masada said it is awaiting a green light from the the city council of Middletown to proceed with a 10 Mgy waste-to-ethanol plant. The plant, which was originally proposed in 1996, has cost more than $40 million in its development phase, according to the Times-Record. The plant is scheduled for completion this December but the relationship between the city and Masada has deteriorated, with the city filing a lawsuit and Masada filing for arbitration.

In Canada, the city of Edmonton has proposed a gasification plant for the Clover Bar landfill that will convert trash into ethanol. The facility is expected to convert 100,000 tonnes of waste material into methanol, and to develop a process to convert methanol into ethanol for fuel markets. The proposed plant would open in 2010.

• In New Jersey, a 10 Mgy corn and fruit waste ethanol plant has been proposed by New Jersey Ethanol. A $6 million facility would be constructed near Bridgeton with an initial capacity of 3 Mgy, and the company said they have completed permitting and will now proceed with construction.

• BlueFire Ethanol Fuels is ready to break ground this month on its 3.1 Mgy waste-to-ethanol plant near Lancaster, California. The company is awaiting its air permit before commencing construction, after securing additional financing to supplement a cellulosic ethanol grant from the Department of Energy received last year. The company, which plans to erect a number of waste-to-ethanol plants near landfills, has a 16.6 Mgy plant on the drawing board that would be built near Corona. Bluefire holds the exclusive North American license to employ the Arkenol Process Technology, a patented system that transforms cellulosic waste into usable ethanol.

Masada awaiting green light from Middletown, NY on 10 Mgy waste-to-ethanol plant

In New York, Masada said it is awaiting a green light from the the city council of Middletown to proceed with a 10 Mgy waste-to-ethanol plant. The plant, which was originally proposed in 1996, has cost more than $40 million in its development phase, according to the Times-Record. The plant is scheduled for completion this December but the relationship between the city and Masada has deteriorated, with the city filing a lawsuit and Masada filing for arbitration.

More on the latest in wate-to-ethanol here.

Today in Biofuels: Ethanol tax credit to drop to 45 cents in US; Brazil’s president says “Stop your hypocrisy” over tariffs; Peru attacks foreign ethanol, OKs local plant

Top Story:

In Washington, the tax credit for ethanol is ready to drop from 51 cents per gallon to 45 cents and a special tax credit will be developed for second-generation biofuels, after a compromise was reached in the long stalled Farm Bill between Senate and House negotiators. The bill contains $900 million for biofuels development, $900 million for nutrition programs aimed to offset higher food prices, while land stewardship programs would received an additional $4 billion, and specialized crops $1.35 billion.

Producer News:

In New York, Oppenheimer & Co. analyst Joseph A. Gomes Jr. said that overcapacity in the ethanol sector will begin to ease in the fall. He said that  “the difficult near-term operating environment resulting in limited upside to near-term operating results caused by rising corn prices and a glut of capacity supply. Corn prices are more difficult to get a handle on in terms of where they will go in the longer term.” Ethanol stocks were up sharply in Friday trading on the news.

In Illinois, the 54 Mgy Center Ethanol plant in Sauget is accepting grain deliveries. The plant, which commenced construction in 2006, is expected to commence ethanol production shortly.

In North Carolina, Iredell County Superior Court judge Judge John Holshouser Jr.  will rule this week on an injunction requested by opponents of a local farmer’s biodiesel production plans. The McLain farm received the OK from Iredell County Commissioners in August 2007, and a Superior Court Judge Kim Taylor ruled in McLain’s favor after local residents sued. The residents group is now suing to have an injunction placed on construction until an appeal can be heard in the case.

International News:

In Germany, Choren Industries opened what it called the world’s first biomass-to-liquid (BTL) plant. a 5 Mgy plant utilizing the Carbo-V process, in Freiburg, Saxony. The company said it would take up to 18 months to reach full productivity at the plant. The Carbo V process is a gasification process in which biomass is gasified at high heat, and carbon monoxide and hydrogen are converted into synthetic diesel fuel. The fuel is chemically equivalent to conventional diesel fuel; however it is produced from renewable biomass. Choren is studying the construction of a 71 Mgy commercial scale plant in Brandenburg.

In Brazil, President Luiz Inacio Lula da Silva called on industrial nations to “stop your hypocrisy”, and drop agricultural tariffs on Brazilian ethanol to save the Doha round of world trade talks. The Doha round, launched in 2001, has failed to produce an agreement because of disputes between developed and undeveloped countries over agricultural subsidies and tariffs. Lula said it was “inconceivable” that developed nations have blamed biofuels for higher global food prices while tariffs are in place. “The world does not produce biofuels and has 800 million people who go to sleep hungry. “Those who criticize biofuels have never criticized the price of oil. The developed world imports oil with no tariffs, yet they place an absurd tariff on Brazilian ethanol,” he said.

In Peru, Peruvian president Alan Garcia said that the country is a victim of the ethanol industry, which he said increased food prices. “It’s creating very serious problems for countries that have to import these products. We believe there are alternative energies that do not put the world’s food in danger,” said Garcia. Meanwhile, his government gave the green light to a Maple Energy ethanol project in the Peru. Maple Energy said it intends to raise $20 million through a private placement to finance ethanol development and oil exploration projects in Peru. Proceeds from the financing, the company said, would be used to acquire an additional 3.1 percent of Aguaytia Energy and finance its proposed ethanol plant.

In the Czech Republic, Environment Minister Martin Bursik of the Green Party announced an $18 million second generation biofuel project in Lovosice, in Bohemia that would be completed by 2012. The plant would be developed by state oil company Cepro and would be financed by the government, sales of the heat by-product, and EU subsidies. The plant, the minister said, would use environmentally-certified feedstock and meet the EU standard of a minimum 35 percent reduction in greenhouse gas emissions.

World Opinion:

The Ottawa Citizen editorializes: “Using food to produce fuel is hardly a crime against humanity…But credible economists like Princeton’s Paul Krugman do fear that corn-based ethanol production is “a really bad policy.”…Biofuel production alone has not created the food crisis. Other factors, such as higher demand for grain to feed livestock in China, a multi-year drought in Australia and market speculation have all contributed. Still, the federal government’s wholehearted embrace of biofuels may be based on false premises. Ensuring that southern Ontario farmland remains committed to food production rather than biofuel production is not in itself going to help feed the world’s hungry, but it is a step in the right direction.

The Executive Intelligence Review wrote: “On Aug. 4, 1994, Al Gore cast the crucial vote which set the United States on the road to taking food out of the mouths of millions, by using food for fuel. His vote…to break a 50-50 tie…killed an anti-ethanol measure sponsored by two Democratic Senators, Bill Bradley of New Jersey and Bennett Johnston of Louisiana…The New York Times reported, “With a tie-breaking vote by Vice President Al Gore, the Senate today … voted 51-50 to table an amendment that would have denied financing to the [Environmental Protection Agency] to carry out a rule guaranteeing renewable fuels a 15% share of the lucrative fuel oxygenate market in 1995. That share rises to 30% in following years….Tabling the [Bradley/Johnston] amendment in effect kills it and clears the way for E.P.A. to carry out its program.”…Speaking Dec. 1, 1998 at the Third Annual Farm Journal Conference, Gore said, “I was also proud to stand up for the ethanol tax exemption when it was under attack in the Congress—at one point, supplying a tie-breaking vote in the Senate to save it.”

Research News:

In California, Silicon Valley magnate Thomas Quinn has backed a company that says it has developed a $10,000 E-Fuel 100 MicroFueler that will allow consumers to make ethanol at home for $1 per gallon.  The machine converts sugar and some household waste into ethanol. Quinn, who backed the Wii motion sensor, told the International Herald Tribune that that “It is going to cause havoc in the market and cause great financial stress in the oil industry.” The company has not made clear its plan to acquire low cost feedstock, but said it can use Mexican sugar not fit for human consumption at 88 percent off the retail price.

Policy and Policymakers:

In Texas, Governor Rick Perry has requested a 50 per cent waiver from the federal renewable fuel standard as a response to rapidly rising food prices. “We appreciate the good intentions behind the push for renewable fuels,” Perry said in a statement. “In fact, we’re diversifying our state’s energy portfolio at a rapid rate, but this misguided mandate is significantly affecting Texans’ family food bill. There are multiple factors contributing to our skyrocketing grocery prices, but a waiver of RFS levels is the best, quickest way to reduce those costs before permanent damage is done.”

Consumer and Fleet News:

In California, actor and activist Sean Penn announced plans to lead a biodiesel-powered, 300 person, 1800 mile caravan from California to New Orleans. The Dirty Hands caravan will leave Southern California today, arriving in New Orleans on May 4 in time for the New Orleans Jazz Festival. The actor said that caravan participants will volunteer for local organizations along the way to New Orleans.

Financial News:

The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, gained 2.72 percent to close the week at 131.05 Friday, on gains in agribusiness and ethanol stocks.  For the day, Archer Daniels Midland (ADM) rose 2.56 percent  to $47.31, while Aventine Renewable Energy (AVR) rallied 10.15 percent to $4.45.  Among small caps, Environmental Power (EPG) rose 4.08 percent to close at $4.34.  Overall, advances led declines 2 to 1 for the day.

Ethanol tax credit to drop to 45 cents per gallon in Farm Bill compromise

In Washington, the tax credit for ethanol is ready to drop from 51 cents per gallon to 45 cents and a special tax credit will be developed for second-generation biofuels, after a compromise was reached in the long stalled Farm Bill between Senate and House negotiators. The bill contains $900 million for biofuels development, $900 million for nutrition programs aimed to offset higher food prices, while land stewardship programs would received an additional $4 billion, and specialized crops $1.35 billion.

Negotiations over the stalled Farm Bill had put existing ethanol incentives in peril last week, according to House Agriculture Committee chairman Collin Peterson. The chairman said that, in order to offset $9.5 billion in increased spending, Senate negotiators had proposed a $0.05 per gallon cut in the ethanol blender tax credit and reductions in other incentives for a total of $1.226 billion in ethanol support cuts.

Earlier this month, the US House of Representatives voted to extend the existing Farm Bill until April 25 to give lawmakers more time to resolve differences between the House and Senate versions of the new Farm Bill, which includes tax breaks and incentives for biofuels. The current law expires on April 18. President Bush has stated that he will not sign legislation extending the current Farm Bill for another year.

The Farm Bill was passed by the Senate in in the fall, while the House version passed in July. Senate Agriculture Committee chairman Tom Harkin said the bill would earmark $1.3 billion for biofuels over the next five years.

The Senate passed an overall funding measure on October 5, but the Agriculture Committee under committee chairman Tom Harkin had been working on specific program allocations until November, which include ethanol tax credits and next-generation biofuel investments. The Senate finance committee previously proposed cutting the ethanol tax credit to 46 cents per gallon.

President Bush has raised the threat of a Farm Bill veto, the first since 1956, over subsidies. Among those in hot dispute is the Brazilian ethanol tariff, which protects US ethanol producers but creates higher prices in the US and retards US ethanol demand growth.

Today in Biofuels Opinion: “the federal government’s wholehearted embrace of biofuels may be based on false premises”

The Ottawa Citizen editorializes: “Using food to produce fuel is hardly a crime against humanity…But credible economists like Princeton’s Paul Krugman do fear that corn-based ethanol production is “a really bad policy.”…Biofuel production alone has not created the food crisis. Other factors, such as higher demand for grain to feed livestock in China, a multi-year drought in Australia and market speculation have all contributed. Still, the federal government’s wholehearted embrace of biofuels may be based on false premises. Ensuring that southern Ontario farmland remains committed to food production rather than biofuel production is not in itself going to help feed the world’s hungry, but it is a step in the right direction.

The Executive Intelligence Review wrote: “On Aug. 4, 1994, Al Gore cast the crucial vote which set the United States on the road to taking food out of the mouths of millions, by using food for fuel. His vote…to break a 50-50 tie…killed an anti-ethanol measure sponsored by two Democratic Senators, Bill Bradley of New Jersey and Bennett Johnston of Louisiana…The New York Times reported, “With a tie-breaking vote by Vice President Al Gore, the Senate today … voted 51-50 to table an amendment that would have denied financing to the [Environmental Protection Agency] to carry out a rule guaranteeing renewable fuels a 15% share of the lucrative fuel oxygenate market in 1995…Speaking Dec. 1, 1998 at the Third Annual Farm Journal Conference, Gore said, “I was also proud to stand up for the ethanol tax exemption when it was under attack in the Congress—at one point, supplying a tie-breaking vote in the Senate to save it.”

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