Nnfcc market review biofuels issue thirteen april 2013

NNFCC Market Review, April 2013, Page 1 of 8
Biofuels
Highlights
Page 2 Policy
Page 3 Bioethanol
Page 5 Biodiesel
Page 6 Isobutanol
Page 7 Aviation Biofuels
Page 7 Research
Page 7 Events
Page 8 Commodity Prices
NNFCC Market Review
Issue Thirteen, April 2013
ach month we review the latest
announcements and news from
across the global biofuels market.
This service is exclusively for our
members.
Foreword
Welcome to the April issue of our biofuels
market review. This month think tank
Chatham House produced a controversial
report on the costs and consequences of
expanding biofuel use in the UK.
The report states that increased use of
biofuels in the UK will cost motorists around
£460 million over the next year and will lead
to increased food prices. This, says the report,
is too high a cost for reducing greenhouse
gas (GHG) emissions, if any GHG reductions
are seen at all. The report also adds that there
are currently no safeguards in UK or EU policy
for dealing with the impact of biofuels on
food security and deforestation.
NNFCC believes the report, which consulted
only a limited range of stakeholders, offers a
one-sided view of the industry. While it is true
that biofuels often cost more than fossil fuels,
this is the price we pay to reduce emissions
from a sector that generates around a
quarter of the UK‟s domestic emissions.
First generation biofuels, like ethanol from
wheat, not only have been proven to
significantly reduce greenhouse gas emissions
but they also allow us to make high protein
animal feed (displacing crops like soya) and
pure streams of CO2 which are used in drinks
manufacturing, as well as bringing jobs and
investment to the UK.
There are also policies in place to ensure that
only biofuels meeting strict sustainability
criteria are incentivised. Furthermore, Europe
is supporting the development of advanced
biofuels, made from residues and wastes,
which don‟t require extra land and can offer
even higher GHG savings.
Read on for all the latest biofuels news.
E

Policy
Chatham House reports on costs of
expanding biofuel use in the UK
Source: Chatham House
The UK target for biofuel use for 2013/14 has
been set at 5 per cent. However, a new
report from Chatham House estimates that if
the UK target is reached, biofuels will cost UK
motorists £460m in the coming year. This figure
represents the increased cost of fuel from
higher prices at the pump and the need to
fill-up the car more often because biofuels
have lower energy content. Further increases
to comply with EU biofuels targets could triple
this cost to around £1.3bn a year by 2020.
The report, The Trouble with Biofuels, by former
Oxfam campaigner Rob Bailey, argues that
this does not represent good value for money.
He says biofuels are an expensive way to
reduce greenhouse gas emissions. The
research found that typically the cost of
emissions reductions from biofuels are several
times what the Government has identified as
an appropriate price to pay.
Click here for more information.
Indirect Land Use Change proposal
would be a blow for UK, says NFU
A proposal to reduce the size of the biofuel
market in Europe will damage farmer
confidence and reduce the incentive to
produce for food, feed and fuel, the NFU has
warned.
The warning comes following the publication
of the draft proposal on mandatory inclusion
of Indirect Land Use Change (ILUC) factors in
biofuels legislation by the French MEP Corinne
Lepage. As the European Parliament‟s lead
rapporteur on the Environment Committee,
Ms Lepage will set the tone for forthcoming
debates on the contribution that biofuels can
make to the Renewable Energy Directive
targets, which currently require Member
States to achieve 10 per cent renewable
transport fuel by 2020.
The draft seeks to introduce ILUC factors on
biofuel production and tighten the cap
proposed by the European Commission to
4.27 per cent for biodiesel produced from oil
crops. International land use modelling has
provided a very wide range of results, and
the NFU believes that the EU Commission has
chosen one modelling result, which includes
some errors that skew results against biodiesel,
on which to base its proposal.
Biofuels have role to play in reducing
UK’s carbon footprint, says CCC
The Committee on Climate Change (CCC),
the influential body who advise the UK
Government on how to reduce greenhouse
gas emissions, has published its report on
"Reducing the UK's carbon footprint and
managing competitiveness risks". In the report
the CCC say that biofuels will have a role to
play in reducing our greenhouse gas emission
in the transport sector.
In the near to medium term, reductions in
surface transport emissions can be made by
improving the efficiency of existing vehicles
and using biofuels. While in the longer term
the CCC recommends a minimal reliance on
biofuels and greater uptake of electric
vehicles. Owing to the limited alternatives, the
CCC expect biofuels to become increasingly
important in aviation.

International Energy Agency calls for
major scale up in biofuels production
Global biofuels production, Source: IEA
The IEA has published a new report, Tracking
Clean Energy Progress 2013, which highlights
the importance of biofuels in reducing
greenhouse gas emissions by 2020. The report
reveals that we are not on track to meet the
IEA‟s goal of holding global climate change
to a 2°C rise by 2020. According to the IEA‟s
Energy Sector Carbon Intensity Index (ESCII)
our average CO2 emissions have only
improved by 0.02 tonnes of CO2 per tonne of
oil equivalent in the last 20 years. In order to
reach the 2020 target the IEA recommended
that annual biofuels production should more
than double and advanced biofuels
capacity must increase six-fold.
Bioethanol
First generation
Ensus plant goes offline
Source: NFU
The Ensus plant on Teesside – one of the
world‟s largest cereal grain bio-refineries – is
to go offline for a second time due to adverse
market conditions. The £300m factory at
Wilton is capable of processing more than 1m
tonnes of wheat a year, but was mothballed
in May 2011 due to slowing demand, before
reopening in August 2012. A spokesman for
the firm confirmed what he said was a
„temporary pause‟ in production.
The plant refines locally-grown animal feed
wheat, sourced by Glencore, and is capable
of annually producing more than 400 million
litres of ethanol, 350,000 tonnes of high
protein animal feed and 300,000 tonnes of
CO2 for use in soft drinks and food production.
USDA proposes sugar for ethanol
purchase
At the start of April the US Department of
Agriculture (USDA) sent a proposal to the
White House Office of Information and
Regulatory Affairs asking it to approve the
sale of up to 400,000 tonnes of surplus sugar to
ethanol producers under the 2008 Farm Bill
Feedstock Flexibility Program. If approved, it
would be the first time the sugar-for-ethanol
program was enacted.
The program allows USDA to buy the surplus
sugar and sell it to ethanol producers at a loss
to keep prices from going below mandated
levels. Large crops in the United States and
Mexico have pushed sugar futures prices
below the trigger price for potential forfeiture
by processors of sugar to the government.
Zimbabwe turns to E85 biofuel
Zimbabwe has approved an E85 (85 per cent
ethanol) fuel blend suitable for the country‟s
flexi-vehicles. The blend is expected to lower
fuel prices throughout the country, which
currently stands $1.51-1.59 (€1.15-1.21) a litre.
Authorities in Zimbabwe recently increased
excise duty on fossil-based diesel and petrol
by 20 per cent and 25 per cent respectively.

“We fully support the use of bioethanol blends
which reduce environmental emissions as well
as enhance energy scrutiny and this is in line
with government policy which envisages
increased biofuels uptake,” said Zimbabwe‟s
Energy Regulatory Authority (ZERA).
Sudan to introduce E10 at pumps
Kenana Sugar (KS) will launch the first
Sudanese project which uses ethanol as a
petrol additive to increase octane and
improve vehicle emissions. The project, which
will mix petrol with 10 per cent ethanol, is a
joint venture between KS and the Greater Nile
Petroleum Operating Company (GNPOC).
Sudan inaugurated its first ethanol plant in
Kenana in 2009, located by the country‟s
main sugar factory. Sudan currently produces
65 million litres of ethanol, 10 per cent of
production is currently used in local markets
for making paints and detergents.
Advanced
TMO to build commercial scale
cellulosic ethanol plant in Brazil
TMO Renewables, a UK biofuels technology
developer, and Brazil-based Usina Santa
Maria (USM) have entered a joint venture to
build a cellulosic ethanol plant in São Paulo.
Under the agreement TMO and USM, will
build, own and operate the 10m litre ethanol
pilot plant in São Paulo, which will use
sugarcane bagasse. The plant will be located
alongside a sugar mill owned by USM and is
scheduled to go into production in 2014. The
bioethanol will primarily be used to power
Flex-Fuel vehicles in the domestic market. The
two companies also plan to build a full-scale
industrial plant in the future.
Abengoa begins operating pilot plant
using waste-to-biofuels technology
Abengoa has started operations at a waste
to biofuels demonstration plant. The plant has
a capacity to treat 25,000 tons of municipal
solid waste (MSW), from which up to 1.5
million litres of bioethanol will be produced.
The demonstration plant in Salamanca, Spain,
uses Abengoa‟s waste-to-biofuels (W2B)
technology to produce advanced biofuels
from MSW using fermentation treatment and
enzymatic hydrolysis. During the process,
organic matter is subjected to various
treatments to produce organic fibre that is
rich in cellulose and hemicellulose, which can
subsequently be converted into bioethanol.
ZeaChem financial troubles cut work
at Ore cellulosic biorefinery
Source: ZeaChem
Just weeks after announcing that it had
made ethanol from sawdust at its pilot plant
in Boardman, Eastern Oregon, ZeaChem has
been forced to reduce its workforce while it
tries to raise capital.
ZeaChem is trying to build a $400 million
refinery to create biofuels in Boardman, along
the Columbia River. However, the company
has failed to close on a bridge loan, leading
to layoffs at the Oregon plant as well as at its
lab in California and Colorado headquarters.

CEO Jim Imbler said the Boardman facility
remains staffed at a reduced capacity and
the company hopes to have financing lined
up within a few weeks.
Aemetis restart operations at 60m
gallon per year Keyes biofuels plant
Aemetis, a biofuel and renewable chemicals
company, has completed planned
maintenance at its 60 million gallon per year
capacity ethanol plant in Keyes, California,
and has restarted production.
The plant will initially use maize as the
principal feedstock, with grain sorghum or a
feedstock blend used after start-up to
maximise operating income. In December
2012, the US Environmental Protection
Agency (EPA) approved grain sorghum as an
advanced biofuel, as it can reduce carbon
emissions by 50 per cent compared to petrol.
Papaya, mango & sweet potato to be
tested as biofuel feedstocks in Hawaii
The Hawaiian Government has invested
$200,000 (€153,800) in a biofuels and animal
feed research project with Florida-based
Biotork Hawaii via its USDA Pacific Basin
Agricultural Research Centre.
The conversion process, which can now
move to pilot stage, takes two weeks and
uses organically optimised algae and fungi,
with Biotork claiming other potential
feedstocks include papaya, sweet potato,
glycerol, sugar cane, albizia and mango.
Biodiesel
First generation
EU to track Argentine and Indonesian
biodiesel imports
Following an anti-subsidy action by the
European Biodiesel Board, the EU has passed
a law making biodiesel imports from
Argentina and Indonesia subject to
registration. Those countries represent 90 per
cent of EU biodiesel imports and face
retroactive duties if an investigation finds the
countries have benefited from illegal
subsidies.
The European Union is already registering
biodiesel from some companies in the two
countries as part of a separate case on
alleged price dumping – deliberately selling
products for less abroad than at home, or for
less than they cost to make.
German rapeseed oil exports soar
despite declining domestic demand
in biodiesel production
According to information published by the
German Federal Office for Agriculture and
Food, the amount of German rapeseed oil
used for biodiesel fuel production slumped to
1.036 million tonnes in 2012, down 28 per cent
on 2011 and 43 per cent on 2010.
It believes rapeseed oil is more valuable as an
export product, saying that Netherlands took
nearly 40 per cent of the total export (300,000
tonnes) in 2012, with Belgium and the UK in
second and third place respectively taking
just under 100,000 tonnes each. Due to that

buoyant demand, German oil mills produced
around 3.6m tonnes of rapeseed oil in 2012, a
15 per cent increase over 2011.
Advanced
Sapphire green crude finds new
customer
Sapphire’s Green Crude Farm in New Mexico,
Source: Sapphire
Algae-based green crude oil producer
Sapphire Energy has entered into a
commercial agreement with Tesoro Refining
and Marketing. Tesoro will purchase crude oil
from Sapphire‟s green crude farm in New
Mexico, which recently started continuous
cultivation and crude oil production from
algae. The site has a capacity to produce 1m
gallons of biodiesel and bio-jet fuel per year.
Dinoflagellate microalgae ‘ideal’ for
biodiesel production
A study in Spain has pinpointed dinoflagellate
microalgae as an „easy and profitable way‟
of creating biodiesel. The research was led by
scientists from the Universitat Autònoma de
Barcelona (UAB), in collaboration with the
Spanish National Research Council, and
claims that the often overlooked group of
marine algae species are ideally suited for
biodiesel production.
Over the course of four years, tests were
carried out in natural conditions using exterior
cultures, with no artificial light or temperature
control, and subject to seasonal fluctuations.
The scientists also identified simple
adjustments that could improve the
production of biodiesel, such as reusing of
leftover organic pulp, the use of air pumps
and more efficient cultivation materials.
Isobutanol
Final judgement in favour of Gevo in
long-running court case with Butamax
Gevo’s bio-based isobutanol plant in
Minnesota, Source: Gevo
The US District Court for Delaware has given its
final judgement in favour of Gevo in a long
running dispute between the company and
Butamax Advanced Biofuels, over patent
infringements claims „188 and „889. The
patents relate to the use of a modified
microorganism and separation technology
used to produce isobutanol.
However, this is unlikely to be the end of the
saga as Butamax have already said they will
appeal the decision. Gevo are also planning
to sue Butamax for infringing the patents „375,
„376 and ‟808, which are scheduled to go to
trial in the US District Court of Delaware in the
second half of 2014.

Aviation Biofuels
USDA recommits to biofuels aviation
project with Boeing
The US Department of Agriculture (USDA) has
agreed to extend for five years a project
aimed at developing biofuels for the aviation
industry with FAA and industry partner Boeing.
The scheme will continue to evaluate
potential feedstocks and develop supply
chains, building on an initial scheme that ran
until last year called Farm to Fly. It will also
build on work carried out at the USDA‟s
Regional Biomass Research Centres, located
across the US to produce regional energy-
producing feedstocks.
Research
DOE renews the Great Lakes
Bioenergy Research Centre
Arlington Agricultural Research Station,
Source: Great Lakes Bioenergy Research
Centre
The US Department of Energy (DOE) has
awarded the University of Wisconsin-Madison
$25 million per year to fund the Great Lakes
Bioenergy Research Centre (GLBRC) for
another five years.
The Centre supports nearly 400 researchers,
students and staff spanning a wide array of
disciplines, from microbiology to economics
to plant biology and engineering. The
innovations born of these unique
collaborations provide the basic scientific
foundation for the sustainable, large-scale
production of advanced cellulosic biofuels
technologies that will help meet the nation‟s
growing energy needs.
Events
FREE Accelerating Biofuels
Webinar, 07 May 2013, online
www.waste-management-
world.com/webcasts/05/accelerat
ing-biofuels.html
This FREE webcast aims to address the
regulatory drivers of waste to fuels and
address the practical and technical
challenges of the process, as well as provide
an update to projects in the US/Canada and
Europe.
Dr Geraint Evans, Head of Biofuels and
Bioenergy at NNFCC, will be speaking on
advanced biofuels in the UK.
World XTL Summit, 20-22 May
in London, UK
www.cwcxtl.com
This year's summit will focus on realising BTL
potential and new prospects, evaluate the
latest developments, reveal new solutions
and opportunities and provide the
knowledge and contacts needed to develop
your business.
LCA Workshops, 17-18 Sept
in York, UK
www.nnfcc.co.uk/events/new-
partnership-providing-lca-workshops
Following the success of our previous Life
Cycle Assessment (LCA) workshops, NNFCC
and North Energy bring you two new training
workshops providing you with insight into how
LCA's work and their applications.

Commodity Prices
Arrows indicate rise (↑), constant (–) or fall (↓) from previous month.
Price, pence/RTFC
Item Jan 13 Feb 13 Mar 13
Renewable Transport Fuel Certificate 7.67-11.00 9.00 17.97
RTFC prices, source www.nfpas-auctions.co.uk
Item Price, €/tonne Apr 13
Ethanol Spot (FOB ARA T2) ↑ 800.10
Biodiesel Spot (Fatty Acid Methyl Ester (FAME), 0°C, CFPP FOB ARA) ↓ 1070.00
Biodiesel Spot (Soy Methyl Ester (SME), CIF ARA T2) ↓ 1143.00
Biodiesel Spot (Palm Methyl Ester (PME), CIF ARA T2) ↓ 1013.00
Biodiesel Spot (Rapeseed Methyl Ester (RME), FOB NWE) ↓ 1103.00
European ethanol and biodiesel spot price, www.kingsman.com
Price, US$/US gallon
Item May 13 Jun 13 Jul 13 Aug 13
Ethanol Futures
(CBOT)
↓ 2.453 ↓ 2.389 ↓ 2.325 2.252
Chicago ethanol futures, source www.cmegroup.com
Item Mar 08 Mar 13 % change
Petrol (NY) 2.50 ↓ 2.91 +16.37
Diesel (NY) 3.25 ↑ 3.04 -6.64
New York Harbour petrol/diesel prices, source www.indexmundi.com
Item Apr 12 Apr 13 Expected 2013 avg. Index value (2000=100%)
Jet Fuel (Global) 3.124 ↓ 2.702 ↓ 3.066 310.200
Global jet fuel prices, source www.iata.org
Disclaimer
The Review has been compiled in good faith and NNFCC does not accept
responsibility for any inaccuracies or the products or services shown.
NNFCC
The Bioeconomy Consultants
NNFCC, Biocentre, Phone: +44 (0)1904 435182
York Science Park, Fax: +44 (0)1904 435345
Innovation Way, E: enquiries@nnfcc.co.uk
Heslington, York, Web: www.nnfcc.co.uk
YO10 5DG.

Nnfcc market review biofuels issue thirteen april 2013

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Nnfcc market review biofuels issue thirteen april 2013