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The Daily Biofuels Summary for August 15

Top Story:

In Iowa, VeraSun Energy announced that its 110 Mgy corn ethanol plant in Hartley had commenced production. The facility, at which construction began in late 2006, is based on a 350-acre site that will produce 350,000 tons of distillers grains. No announcement of a corn oil processing unit has been made. The opening of the Hartley plant is the fourth for VeraSun. The others were opened in Hankinson, ND, Bloominburg, OH and Marion, SD. VeraSun’s capacity has increased to 1.3 billion gallons with the opening, and Iowa’s capacity has increased to 2.5 billion gallons.

Producer News:

In New York, Changing World Technologies filed this week for a $100 million IPO. The company operates a 9 Mgy turkey fat and offal-fat based biodiesel plant in Carthage, MO. The company said in its filing that it would expand capacity to as much as 54 MGy with the proceeds from the IPO. The company uses a fat pyrolysis-like process that combines heat and pressure to gasify and then reform waste into renewable diesel, fertilizers and specialty chemicals. The company’s promotional material says that the 6 billion tons of US agricultural waste could yield up to 48 billion gallons of fuel using the TCP process. The company is developing a new facility near Philadelphia to convert used auto tires and municipal waste into fuel.

In California, Amyris Biotechnologies has raised an additional $21 million in second round capital from unnamed investors, with a total of $91 million in proceeds from the second round taking 19.3 percent of the company’s equity, valuing the early-stage enzyme and microbe manufacturer at $470 million. The company has raised a total of $111 million from investors, including $91 million in the still-open second round. Amyris is developing a large-scale fermentation process to produce biofuels that it says have more energy than ethanol, and are fully compatible with today’s cars and the existing petroleum infrastructure, a description consistent with the properties of biobutanol. The company is also developing a diesel alternative that has more stability under cold temperatures and during storage than conventional biodiesel.

In Washington state, Imperium Renewables has lost an 18 Mgy contract for biodiesel with Royal Caribbean. The contract, “the single largest long-term biodiesel sales contract to an end user in the U.S.” according to papers filed with the SEC by Imperium, was originally slated to run through 2011. Royal Caribbean said in a statement that the relationship between the cruise company and Imperium ended in July, and RCCL also sold a 7 percent equity stake it held in the company. No other explanation was given for the loss of the contract, including any information on alternative fuel contracting by RCCL, although the company has been actively purchasing in Argentina, according to Digest sources.

World Opinion:

Nebraska Governor Dave Heineman: “For 25 years and maybe more, the federal government has talked about reducing our reliance on foreign oil - and they haven’t done a doggone thing about it. It’s time we did something. America needs leadership when it comes to energy, and ethanol is particularly part of that future.”

State Rep. Chuck Burley of Oregon: “Everyone recognizes the potential of biofuels as a renewable energy source, but the mandated use of corn-based ethanol is causing more problems than it is solving. Our proposal offers Oregonians relief from this mandate. It also allows the Legislature to seek and promote more efficient sources of energy to power our state.”

International News:

In Canada, Shell announced that it will increase its holdings in cellulosic ethanol producer Iogen to 50 percent, from a current 26 percent stake, and will extend a commercial partnership to develop Iogen’s cellulosic ethanol potential.  Dr. Graeme Sweeney, Shell Executive Vice President Future Fuels and C02 said “This is a strong statement that Shell is committed to accelerating the development of cellulosic ethanol in collaboration with Iogen. We have come a long way together already on this particular technology pathway for sustainable biofuel and we will be working ever closer to meet the technical and commercial challenges facing larger scale production.”  Shell indicated that it is considering an investment in Iogen’s first commercial-scale cellulosic ethanol plant.  Iogen, which debuted it first demonstration-scale cellulosic ethanol plant in Ottawa in 2004, uses wheat straw and other agricultural residue as feedstock.

In Germany, Archer Daniels Midland announced that it has acquired the assets of Campa Sued, in Bavaria. Campa Sued operates a canola-crushing plant to produce oils and meal for the biofuels and agricultural markets. The facility becomes ADM’s first processing operation in Central Europe, and the company said in a statement that the plant’s location on the Danube gave it access to the Czech, Hungarian and Slovakian markets.

In Canada, Sustainable Development Technology Canada issued a call for applications for the $500 million NextGen BiofuelsFund which SDTC is managing on behalf of the Canadian government. The Fund can support of the 40 percent of the cost of advanced biofuels projects including cellulosic ethanol and next-generation biodiesel; contributions from the fund must be repaid within 10 years of project completion. SDTC said that eligible projects must be located in Canada, use biomass that is available in Canada, be a demonstration-scale facility, and have previously demonstrated the viability of its technology.

Research News:

A new poll by the League of Conservation Voters, the Sierra Club, and the Natural Resources Defense Council Action Fund found that 83% of Americans support investment in wind, solar, and next generation biofuel technology to achieve energy independence, compared to 63 percent support for increased offshore drilling. Only 48 percent of those surveyed said that they favored the “gas tax holiday”, 81 percent supported an increase in the availability of hybrids, and 79 percent supported higher efficiency appliances.

Policy and Policymakers:

In Oregon, state house Republicans said that they intend to try and repeal the state’s ethanol mandate, originally passed by the state legislature last year. Republicans led by Rep. George Gilman said that the E10 mandate had increased costs at the pump by reducing fuel economy.

Consumer and Fleet News:

An engineering team at General Motors reported that they have been able to extend the “electric-only” range of the new Chevrolet Volt to 46 miles, up from 40, through improvement of the car’s aerodynamics. The company said that it will initially manufacture 10,000 units per year but increase production to 60,000 “within a few years”, and is rumored to be extended to the Australian market shortly after debut in the US in 2010. The plug-in hybrid Volt operates on a combination of its electric motor drivetrain and an internal combustion engine. The Volt is expected to have an E100 engine for the Brazil market.

Financial News:

The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, fell 0.81 percent yesterday to close at 76.02 as ethanol volatility ruled the day. For the day, British Petroleum (BP) fell 1.24 percent to close at $58.83, while BioFuel Energy continued to recover from a trip to stock hell, gaining 38.46 percent to close at $1.80. Among small caps, Bluefire Ethanol (BFRE) rose 5.50 percent to close at $3.45.  Overall, advances led declines 3 to 2 for the day.

The Biofuels Daily Summary for August 14

Top Story:

In South Dakota, POET Energy said that it was accelerating the schedule for its $4 Million pilot cellulosic ethanol plant in Scotland, and would open the facility by December. “Our expanded research effort has led to several significant strides in the development of cellulosic ethanol technology at the lab scale in recent months,” said Jeff Broin, CEO of POET. “In the past few months, our scientists have been able to achieve significant ethanol percentages in fermentation and improve the yield of ethanol from biomass. Additionally, in our work with farmers and agricultural equipment manufacturers, we had a very successful harvest of corn cobs last fall and anticipate further advances during an expanded harvest this fall.”

POET’s 125 Mgy cellulosic ethanol plant, “Project Liberty” is expected to commence construction in Emmitsburg, Iowa in 2009 and will be operational in 2011. The plant will produce  100 Mgy of conventional corn ethanol and 25 Mgy of cellulosic ethanol from corn fiber and cobs. The project is expected to increase pr bushel yields from corn by 11 percent, to 3 gallons per bushel, and per-acre yields by 27 percent.

Producer News:

Raymond James analyst Pavel Molchanov, in a note to investors in BioFuel Energy regarding its liquidity crisis, wrote that “there is a realistic prospect of obtaining additional working capital, and we believe management’s roadmap toward resolving this liquidity crisis by year-end is credible. Therefore, at this point, we do not foresee bankruptcy or some other drastic outcome.” BioFuel Energy posted a loss of $0.41 per share for the second quarter and has racked up $46 million in hedging losses this year when corn prices eased.

In Hawaii, Imperium Renewables closed the door on a once-bright Hawaiian future when it closed its Honolulu office and laid off additional personnel, including Chief Operating Officer David Leonard. The company had planned to construct a $90 million biodiesel plant and supply Hawaiian Electric’s newest power plant with up to 12 Mgy. The company, which did not proceed with a planned IPO this year, has scaled back plant construction, laid off more than half its staff, and intends to supply HECO with biodiesel from its Washington state-based biodiesel plant. HECO will pass along the added costs for production and distribution to consumers under an existing agreement with the Hawaiian state  Public Utilities Commission.

At the American Coalition for Ethanol annual conference this week in Nebraska, presenters highlighted new markets for products from ethanol plants. VeraSun touted the extraction of corn oil, while Chippewa Valley ethanol touted its food flavoring extract alcohols, aromatherapy products, hairspray and “priairie” brand organic vodka.

World Opinion:

Brent Searle, economist with the Oregon Department of Agriculture: “We’re kind of at the stage with biofuels where we were in early computers. They were big. They were clunky. They weren’t as efficient as we’d like them to be. Looking back, they looked pretty silly compared to what we have now … (but) you gotta start somewhere with this stuff.”

An editorial in the Rapid City (SD) Journal: “The corn model for producing ethanol has become so successful it has become a victim of its own success. While low corn prices mean profits for the South Dakota ethanol industry, increasing demand for corn drives prices higher and ethanol profits lower. ?Cellulosic ethanol will be the next frontier for ethanol. But the technology to produce  cellulosic ethanol is in its infancy. The 21 billion gallon federal requirement is more than aggressive — it’s unrealistic — primarily serving as a notice to investors and developers that the market will be there when the product is.”

International News:

In Malaysia, Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui, said that the lowered price of crude palm oil made it possible for the country’s 15 biodiesel plants to resume full production at full capacity and make a profit. The government, he said, would buy 500,000 tonnes of biodiesel in the next year and would distribute a B5 biodiesel blend. The minister said that if crude palm prices decrease further, the country would consider a B10 mandate.

In Kenya, an article in IRIN highlighted the struggles of the newborn local jatropha industry. The industry profile highlighted the impact of rising diesel costs, and a 500 percent increase in the price of jatropa seeds from $15 per kilo to $92 per kilo. Test planting results have shown that local jatropha would take up to four years to reach maturity and that colder weather impacted projected yields.

In Thailand, General Motors announced an agreement with state oil company PTT to support research into cellulosic ethanol, expend biodiesel sources, develop alternative fuels including compressed natural gas, as well as expand R&D for hybrid and fuel cell engine technologies. GM also announced a partnership with the Thailand Automotive Industry Association that would propose an alternative energy strategy for the Thai automotive industry. The announcements tied in with a new $445 million diesel engine production plant that GM will undertake in Thailand.

Research News:

Researchers at Ames Lab are reporting that they have developed metallic alloy-based mesoporous nanospheres, akin to microscopic sponge balls with thousands of channels running though them, to increase the surface area of syngas catalysts by 100 times. The research team had previously found that ethanol yields from syngas can be increased if the surface area of catalysts, which activate carbon monoxide molecules, could also be increased to increase CO adsorption on the catalyst surface.    In related news, researchers at Oxford Catalysts have developed a cobalt-based catalyst that can increase yields from the Fischer-Tropsch biomass-to-fuel process.  Fuel yields from the F-T process have typically been in the 42 gallons per tonne of biomass range, making F-T uneconomic in many cases.

Policy and Policymakers:

The International Herald Tribune published a useful comparison of the energy policies of Senator John McCain and Senator Barack Obama, including comparisons on offshore drilling, the strategic petroleum reserve, windfall profits tax, alternative energy, speculation on futures markets, nuclear power, gas tax holiday, climate change, oil use, the arctic national wildlife refuge, energy research, vehicle fuel economy and electricity.

Consumer and Fleet News:

In Georgia, John Deere announced that it would integrate the AGRIS V9 business system, used by agribusiness and biofuels plants, with the RINSTAR system for generating Renewable Identification Numbers (RINs) and reports to meet requirements of the Renewable Fuel Standard. The partnership will provide users of AGRIS V9 with a simplified means of managing RIN compliance, and Clean Fuels Clearinghouse said that the agreement would result in more certified RINs and more transparency and confidence in renewable fuel transactions.

Financial News:

The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, fell 0.84 percent yesterday to close at 76.64 as large cap jitters offset a recovery by Biofuel Energy (BIOF). For the day, Archer Daniels Midland (ADM) fell 0.02 percent to close at $26.88, while BIOF moved up $0.32 to close at $1.25.  Among small caps, Panda Ethanol (PDAE) rose 14 percent percent to $0.80.  Overall, advances led declines 3 to 2 for the day.

German state study says 30 percent of arable land could be used for biofuels without food, livestock impact

In Germany, an advisory committee to the Thuringian Agricultural Ministry concluded that as much as 30 percent of Thuringian arable land could be converted to biofuel production without impact on the food or livestock feed industries. The German state had previously announced a 20 percent biofuels target for 2020.

Germany background

A 95 Mgy Südzucker ethanol plant, the largest in Europe, commenced production in Zeitz last month. The plant uses sugar beet syrup as a feedstock, and will also produce its own biogas that will power special burners that eliminate all aromatic compounds associated with the production process.

Cropenergies announced the purchase of Ryssen Alcools from Sudzucker and said that it would increase ethanol production by nearly 30 Mgy in France. The company said that it will produce a total of 185 Mgy in 2008/09.

Lufthansa said last month that it would convert up to 10 percent of its fuel usage to biofuels by 2020, as a part of its overall effort to reduce emissions by 25 percent in that time frame. compared to 2006 levels. The company, which announced a set of measures to improve environmental efficiency, also said that it would reduce NOX emissions by 80 percent from 2000 levels.

Daimler said that has successfully tested B100 jatropha biodiesel in 3500 mile trail runs across the country using a Mercedes-Benz C Class C 220 CDI. The trial runs met European emission requirements and achieved comparable mileage to conventional diesel fuel Daimler also said that it was testing the production of jatropha at two nurseries in India, totaling 30 hectares, and that it projected that it would be able top produce jatropha at $1.57 per gallon. The company said it would take two to five years to maximize yield with a varietal whose seeds contained 60 percent oil, and that jatropha would provide yields for up to 30 years.

Conservationists protest Kenya’s 20,000 hectare sugarcane ethanol plan; 350 species said to be at risk

In Kenya, a plan to grow sugarcane for ethanol on 20,000 hectares in the Tana River Delta has prompted protests from conservation groups. The Mumias Sugar Company plans to establish a plantation, 34 MW power plant and an ethanol mill 80 miles north of Mombasa, and conservation groups said that up to 350 species of wildlife could be endangered by the project.

Biofuels Digest Special Outlook Report on India

Biofuels Digest has prepared a special report from India, where a combination of state oil firms chasing down a proposed E10 mandate, as well as the importance of India as the center for global jatropha R&D, plus the sheer size of the Indian energy market, has made the country a cornerstone in the global biofuels market.

First, correspondent Joelle Brink files an overview of upcoming Indian state and federal elections, with energy policy at the forefront. Then, we offer a glimpse at the growth of jatropha research and cultivation with a look at Tree Oils India Limited. Finally, we look at the continuing efforts of the public and private sectors to effectively balance food and fuel in the production of ethanol from sugar cane.

Above: Jatropha platation in India (Tree Oils India R&D facility, Hyderabad)

India update

Reported by Joelle Brink, joelle.brink@gmail.com

“We are all preparing for the elections.”— Railway Minister Lalu Prasad

In India, six hotly contested state elections are taking place this year, leading up to the 2009 national elections. In all of them energy policy is fast emerging as one of the key political issues facing India. Second only to the controversial US/Indian civilian nuclear agreement is the debate about biofuels, and particularly ethanol. The ruling United Progressive Alliance government has so far been unable to secure enough ethanol to meet its existing 5% blending mandate, and failed again this year, largely due to lack of cooperation by the states, to secure enough to raise the mandate to 10%. In addition, the mainly Western controversy over the sustainability and environmental consequences of ethanol spread to India early this year.

But there are signs that the outlook for ethanol may soon improve. This week the Bihar state government approved a joint venture with Tamil Nadu-based Indian Gasohol Ltd (IGL) to build ten large scale commercial ethanol distilleries in northern and southern Bihar state. The ten plants will use sugar cane juice to produce ethanol and will have a combined output of 540 million metric tonnes. In addition, they will cogenerate 1450 megawatts of surplus power for rural electrification. The state government estimates that the project will create 50,000 direct and 400,000 indirect jobs. Indian Gasohol has also announced plans to begin producing corn ethanol in four districts of the state that are not suitable for sugar cane cultivation. Bihar State Cabinet Secretary Amir Subhanni told reporters that the Indian Gasohol project will primarily benefit the state’s farmers, who will earn 22,000 rupees (about US $500) per acre. Many Indian farm families now survive on $1-2/day, especially in Bihar, India’s poorest state.

Earlier, the three central government-owned oil companies—Bharat Petroleum Corp. Ltd., Hindustan Petroleum Corp. Ltd. and Indian Oil—had invested approximately $600 million in Brazil to buy/lease sugar cane  plantations and related ethanol production facilities. Whether the Brazilian ethanol will be imported or sold abroad has yet to be determined. India, Brazil and South Africa, known as the G3 or Outreach 3, are partners in a mutual agreement to share technological and social initiatives.

Biodiesel focus: Tree Oils India

Tree Oils India Limited was established in 2003 to produce biodiesel from non-edible tree based oils (feedstocks). In order to facilitate commercial production of Tree Based Oils on large scale, TOIL established 120 Acres of R&D centre in India in 2003.

The plantation consists of: 60 acres of Pongamia, 40 acres of Jatropha, 5 acres of Moringa, 2 acres of Azadirachta, 1 acre of Sapindus, and 1 acre of Simarouba. TOIL also planted to conduct research: Madhuca, Candle Nut, Chinese Tallow, and Calophyllum.

Above: flowering Pongamia tree (Tree Oils India R&D facility, Hyderabad). Pongamia is native to India and South Asia, and cultivation is also in planning for Australia.

TOIL has also established nursery for Jatropha cuttings and Pongamia grafts and started Apiculture and Vermicompost activities.  The focus was on developing an integrated Tree Based Oils Farming System to be adopted by the farmers under contract farming system in the next five years. TOIL has assisted in establishing Jatropha and Pongamia plantations for BioMassive, Sweden for their Jatropha plantation project in Tanzania; Global Green Energy, Sydney, Australia for their Jatropha plantation project in Ghana; Global Tree Oils, Singapore for their Jatropha plantation project in Thailand; Pacific Renewable Energy, Brisbane, Australia for their Pongamia research and plantation project in Australia; and Australian Biodiesel Group, Sydney, Australia for their Jatropha plantation project in Solomon Islands.

Sugarcane ethanol focus:

State-oil company Hindustan Petroleum Corporation has identified four sugar mills in Andhra Pradesh (out of 42 total in the state) as potential acquisitions as it attempts to secure sufficient ethanol production capacity to meet the country’s proposed E10 mandate.  India will require 316 million gallons of ethanol to meet the E10 mandate. Only sugar mills are permitted to manufacture ethanol, under an order from the central government. Total ethanol production capacity from sugarcane in India is projected at 419 million gallons by the Indian Sugar Mills Association.

Pure Power to set up “Brains Trust” for lignocellulosic R&D

In New Zealand, Pure Power announced that it is increasing its R&D effort by setting up a “Brains Trust” in lignocellulose. Under the leadership of one of Dr Jim Watson, Pure Power’s Energy Evangelist, Pure Power will focus on conversion of lignocellulosic feedstocks and other biomass into bioethanol, biodiesel, biocrude and a large range of bioproducts such as bioplastics and biochemicals.

Pure Power’s washing processes preserve and recover lignin, converting the biomass into three product streams: bioethanol, xylose and natural lignin, which can then be used to make hundreds of different bioproducts including paints, glues, resins and chemicals such as phenol, which are currently derived from petroleum. In addition the process also yields xylose, from which xylitol (a sugar substitute) can be made.

Pure Power background

Pure Power said last week that it would establish corporate headquarters in Singapore for its renewable energy business. Pure Power recently acquired a stake in Aquaflow Bionomic, a New Zealand company which is harvesting wild microalgae and is supporting the Air New Zealand biodiesel trail scheduled for later this year. Pure Power also acquired BioJoule Limited, a cellulosic ethanol concern. In a statement, management said that the International Energy Agency forecasts a 57 percent increase in energy needs by 2030, and that two-thirds would come from developing countries, led by China and India.

New Zealand’s Aquaflow Bionomic has achieved commercial-scale algae harvest levels at its plant in Marlborough, and said that its new bioreactor installations are expected to bring the company to c0mmercial-scale production of biocrude “within the next few months”.

Aquaflow is rumored to be the fuel supplier for the upcoming Air New Zealand biodiesel test flight.

nbr.co.nz reported that the company has appointed aviation engineering consultant Des Ashton to lead operation development related to aviation projects. Last month, Virgin CEO Sir Richard Branson said that the Air New Zealand flight would use algae-based biodiesel, after the initial Virgin Atlantic flight using a mix babassu palm and coconut oils.

Finland’s St1 to open central dehydration plant to serve more than 20 ethanol plants across the country

In Finland, St1 will open a 12 Mgy dehydration plant in Hamina, that will serve to dehydrate ethanol produced at multiple Etanolix waste biomass plants in Lappeenranta and Närpiö. St1 expects to open twenty units in Finland in the next two years that convert waste biomass, including waste from candy factories and bakeries, into 85 percent ethanol, which will now be dehydrated in Hamina.

Finland background

In January, UPM-Kymmene and waste management company Lassila & Tikanoja announced that, in conjunction with the Technical Research Centre of Finland (VTT), they had developed an ethanol and energy generation concept using paper, cardboard, wood and plastic, and would begin testing at VTT’s Rajamaki unit.

Finland’s Neste Oil recently announced a plan to construct the largest biodiesel plant in the world, in Singapore. The 430 Mgy plant would be completed by the end of 2010. The plant would use palm oil certified by the Roundtable on Sustainable Palm Oil (RSPO). Estimated project cost is $814 million. Singapore is considered ideal for palm oil biodiesel because of its proximity to the feedstock plantations in Malaysia, Indonesia and Thailand as well as its world-class fuel terminal facilities.

Neste also recently announced that it will launch the “Neste Green Diesel” line of hydrotreated vegetable oils and said that the fuel will be suitable for all diesel vehicles despite a biofuel content of more than 10 percent. The company said that its hydrotreatment proces, where vegetable oils and hydrogen are blended, made it possible to exceed the 5 percent biodiesel blend limit that it currently considered safe for all diesel vehicles by vehicle makers.

Brazil expects to up ethanol exports to US after floods

In Brazil, the Brazilian sugar growers association, Unica, said that it expects to increase exports to the US of sugarcane ethanol in the aftermath of US Midwestern floods, which have caused US feedstock prices to skyrocket. Unica President Marcos Jank said that Brazil expects to increase ethanol exports by 340 Mgy this year compared to 2007.

Brazil background

• Sugar Cane Technology Center research leaders said that Brazil would enter the cellulosic ethanol industry at the commercial-scale with a first plant opened as soon as 2011. The proposed plant would use sugar cane bagasse as feedstock. Two cellulosic projects are already at the pilot stage, one owned by CTC and the other by Petrobras.

• The Union of Sugar Industries (Unica) said that sugar production is expected to drop 25 percent this season compared to last year, at 1.63 million metric tons. Ethanol production will fall 20.2 percent for the season to 470 million gallons. 64 percent of the Brazilian sugar crop will be converted to ethanol. Wet weather, reduced yields per hectare, and reduced yields of sugar per ton of sugarcane were all cited as causes for the drop.

• The president of Petrobras said the state oil company will complete its 700 mile ethanol pipeline from Goias state to Sao Paulo by the end of 2009. Petrobras also said that its second pipeline was in the planning stages, and the initial studies would be completed next month on the alternative route from Cuiaba and Paranagua. The Goias pipeline has a project cost of $1 billion. Petrobras, Mitsui and Camargo Correa established a joint venture to finance and construct an ethanol pipeline between Senador Canedo and Paulínia, and the section that connects the Tieta-Parana Waterway to the Paulínia Terminal.

Petrobras said earlier this year that it will establish a biofuels subsidiary to centralize its biofuel production management. The new unit will supervise both biodiesel and ethanol production, although sales and logistics will continue to be supervised by the Petrobras supply division. The company has set a goal of becoming the largest producer of biodiesel in the country. Petrobras said it will construct a new 193 Mgy “superplant” for biodiesel production, and will make biodiesel directly from seeds rather than oils. The new technology is being tested at a pilot plant in Guamare, Rio Grande do Norte state. Petrobras is already constructing three smaller plants that will each have a capacity of 15 Mgy. Total project investment for the four plants will be $300 million.

Petrobras previously announced that it will construct 10 new biodiesel plants between now and 2012. Total project cost for the 13 facilities was projected at $507 million and planned capacity at the time was anoucned at 225 Mgy. Petrobras commenced marketing biodiesel in the past few months, and the company has made sales to date of 41 Mgy, primarily in Rio Grande do Sul. Petrobras will market a total of 100 Mgy which is estimated to cover Brazil’s consumption of biodiesel for the first half of 2008. Brasil Ecodiesel has a 62 percent market share in the Brazilian biodiesel market.

• The Brazilian government has targeted reaching a B5 biodiesel blend level by 2013. Brazil has set a B2 blending mandate effective in January 2008, and the director general at the National Petroleum, Natural Gas and Biofuel Agency (ANP), said that he expected that there would be enough biodiesel to cover more than twice the amount mandated.

• 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 their business and place more emphasis on acquiring distribution for ethanol. Cosan, which recently acquired 1500 ExxonMobil stations in Brazil and has reached 36 million tonnes of cane production, was cited as an example of the trend towards consolidation.

• Amnesty International pointed to four cases where more than 1,700 sugar cane workers were rescued from forced labor and slavery conditions. The human rights group said that 288 workers were rescued from six plantations in Sao Paulo state, 409 workers from an ethan

Australian GM-Holden unit to produce new flex-fuel, LPG cars by 2012

In Australia, General Motors Holden said that it expected to produce LPG- and ethanol-powered vehicles under its popular Commodore brand by 2012. The company said it was investing $40 million in its Fisherman’s Bend subsidiary that would provide the necessary advanced vehicle technologies. The company said that it was not convinced about diesel technology and that the volatility of diesel prices made it risky.

In other recent Australia news:

• BP has cancelled an agreement with Primary Energy to develop a $270 million, 50 Mgy ethanol plant at Kwinana. BP spokesmen said that changing economics forced the company to cancel an agreement with Primary Energy that was signed in 2006.

• In Australia, the Queensland University of Technology has proposed a $7 million pilot sugar cane ethanol plant for Mackay. University researchers have said that they expect to be able to produce up to 900 Mgy of ethanol using bagasse.

Opposition parties in Queensland introduced a bill for a ten percent ethanol mandate, with opposition leader Lawrence Springborg telling the Sunshine Coast Daily that “An ethanol mandate in Queensland could provide a massive kick-start to the fledgling renewable fuels industry, reduce Queensland’s reliance on imports, create jobs and improve air quality.” Queensland Premier Anna Bligh, expected to oppose the bill, said that the state will use five percent ethanol by 2010 without the mandate.

The Australian ethanol industry has hired auto-industry expert, Juliet Potter, a director of AutoChic, to promote Queensland’s +e ethanol campaign to women. Research in Australia has shown that acceptance and support for biofuels lags among women.

•

Big Three Auto has 32 mpg target for 2020 not the 35 mpg in the Energy Act

A study by the Michigan’s Transportation Research Institute concluded that the Big Three automakers in Detroit would only have to reach an average of 33.2 miles per gallon across their fleets, not the 35 mpg standard in the EISA Act of 2007, owing to the manner in which targets for automakers are calculated. The study said that manufacturers with a large installed base of truck and SUV drivers would have lower targets than small-car makers such as Honda that would need to reach a corporate average of 39 mpg by 2020, according to the report’s authors. The study did not calculate credits earned by automakers for flex-fuel cars,. which could bring the target as low as 31 mpg.

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