Domestic Fuel

Brazil-based GranBio has announced plans to expand to the U.S. with an office in San Francisco and has name Vonnie Estes as the managing director. In this new role, Ms. Estes will lead GranBio’s efforts to access new technologies and establish key public and private collaborations for the company’s continued global expansion in advanced biorefinery development.

Ms. Estes joins GranBio from Codexis, a developer of engineered enzymes for pharmaceutical, biofuel and chemical production, where she most recently was Vice President of Corporate Development. Prior to Codexis, she was the Chief Commercial Officer at DuPont Danisco Cellulosic Ethanol (DDCE)as Executive Vice President, Business Development. Prior to joining DDCE, she led DuPont’s commercialization program for cellulosic ethanol. Her multifunctional team was responsible for the $140 million joint venture between DuPont and Danisco.

“GranBio intends to expand its profile in North America and our new office in the United States will allow us to build a team and execute our strategy,” said Alan Hiltner, Executive Vice President, GranBio. “We are extremely pleased that Ms. Estes will lead our effort. Her track record of success at large, established multi-national and early stage start-up companies is the mark of a true entrepreneurial spirit and savvy industry trendsetter. These are exactly the qualities we want to be known for as GranBio begins its strategic global expansion.”

In April, GranBio completed the acquisition of a 25 percent equity investment in the North American Cleantech pioneer American Process Inc. (API). Under the agreement, GranBio will have access to a proprietary biomass pretreatment platform that makes it possible to cost-effectively develop cellulosic sugars as a feedstock for conversion to a variety of biochemicals and biofuels.

Amyris has shipped it first commercial product from its plant in Brazil. The facility was the company’s first purpose-built industrial fermentation facility and produces Biofene, the company’s brand of renewable farnesene, to be used in a range of specialty chemical and fuel applications.

“This initial shipment marks the successful completion of our start-up activities. We have operated multiple tanks without contamination or surprises through several production runs during the first month of operation,” said John Melo, President and CEO of Amyris.

“We are now focused on ramping up Biofene production and delivering product to our customers, from renewable diesel for bus fleets in Brazil to squalane emollient globally and soon a range of specialty chemical applications,” Melo concluded.

Amyris’s Biofene plant in Brotas, in the state of São Paulo, Brazil, sources its sugarcane feedstock locally from the Paraíso mill. Prior to the start-up of this facility, Amyris relied solely on contract manufacturing for commercial production.

Amyris has announced that it has completed a $42.25 million private placement of its common stock. The company has also begun production of its industrial fermentation facility in Brazil and is producing Biofene, its brand of renewable farnesene, a fragrant oil chemical. When adding a hydrogen molecule to farnesene, you get farnesane, which is the foundation molecule for renewable diesel.

“We are encouraged by the continued, strong commitment from our major investors, particularly as we start up our new industrial fermentation facility for the production of our renewable hydrocarbons in Brazil,” said John Melo, Amyris President & CEO. ”Our own farnesene plant at Paraiso has been successfully commissioned, with initial farnesene production underway. We anticipate sales from this facility during the first quarter of 2013.”

The Company sold 14,177,849 shares of common stock in a private placement to existing Amyris investors. The transaction included $37.25 million in cash proceeds and the conversion by Total Gas & Power USA, SAS of $5 million from an outstanding senior unsecured convertible promissory note.

Edeniq, with its partner Usina Vale, a Brazilian sugar and ethanol producer, has begun to engineer and construct a bagasse to sugars demonstration-scale plant. The biorefinery will produce cellulosic sugars from sugarcane bagasse and then convert it into ethanol. The plant will handle up to 20 tons per day of bagasse and will be co-located at Usina Vale’s ethanol and sugar production site in São Paulo State, Brazil. One goal of the project is to demonstrate how sugarcane mills can economically increase ethanol production with Edeniq’s bolt-on technologies.

After a feasibility study was completed, Usina Vale signed a collaboration agreement with Edeniq under which they are jointly funding the bagasse to sugar demonstration-scale plant, believed to be the first of its kind in the region. Co-locating the demo plant at Usina Vale’s commercial site will accelerate the technology scale-up from demo to full-scale, and the technology will then be deployed at affiliated ethanol plants.

“Brazil has a large and growing demand for ethanol,” said Pedro Augusto Menezes de Toledo Florencio, CEO of Usina Vale. “We believe Edeniq’s technology will allow us to increase ethanol production in a very economical way, allowing us to meet the growing demand of our customers and our country.”

According to Edeniq, their technologies efficiently break down biomass to liberate cellulosic sugars that can be converted into ethanol and other products. Edeniq owns and operates a fully integrated two ton per day pilot plant in Visalia, California, in partnership with Logos Technologies, using its proprietary Cellunator, which mechanically pre-treats biomass so that it can be more easily converted to sugars, increasing sugar yield and thus driving an increase in ethanol yield. The Brazil plant will also include this technology.

“Through this partnership with Usina Vale, we are further demonstrating our model of increasing the efficiency, scalability and sustainability of biofuels through low capital and operating cost technologies that can be integrated directly into existing ethanol production sites,” added Brian Thome, President and CEO of Edeniq. “Edeniq is developing the lowest cost route to cellulosic sugars, which will lead to low cost ethanol production for our partners like Usina Vale.”

The Renewable Fuels Association (RFA) is calling on the Obama Administration to help remove certain trade distorting policies in Brazil that they say have contributed to the dramatic decline in exports of ethanol to Brazil. The organization’s President and CEO, Bob Dinneen, sent a letter to US Trade Ambassador Ron Kirk asking for assistance on the matter.

The letter seeks assistance from the USTR in convincing Brazil to reverse its decision to reduce blend volumes from 25 percent to 18 percent, and remove a tariff imposed by the state of Sao Paulo that is discriminating against a vast majority of exports to Brazil. While imports of ethanol from Brazil continue to flow into the U.S. at the rate of about 50 – 60 million gallons per month with the help of the RFS, exports to Brazil have been reduced significantly as a result of these trade barriers.

Most analysts expect the U.S. to export just 650-750 million gallons for the entire year, with only about 10-15 percent of the ethanol going to Brazil.

Click here to read the letter in its entirety.

The Advanced Biofuels Markets conference is underway in San Francisco and many advanced biofuels companies have been making announcements. One of these companies is Cobalt Technologies who has announced that Bunge Global Innovation has joined its Cobalt’s Series E Preferred Stock round an a strategic investor.

The investment comes on the heels of Cobalt’s agreement with Bunge and specialty chemicals company Rhodia Poliamida e Especialidades Ltda. (“Rhodia”) to operate a pilot plant demonstrating the production of n-butanol utilizing sugarcane bagasse as feedstock at the Laboratório Nacional de Ciência e Tecnologia do Bioetanol facility in Campinas, Brazil. The partners will also work together to develop a co-located, demonstration scale biorefinery at a Bunge sugarcane mill.

“We are pleased to have forged this strategic partnership with Bunge, one of the largest sugar producers in Brazil,” said Bob Mayer, CEO, Cobalt Technologies. “Bunge’s investment and supply of raw material for feedstock will allow us to begin demonstrating the value of our biobutanol technology and help unlock its potential.”

Ben Pearcy, Managing Director, Sugar & Bioenergy and Chief Development Officer of Bunge Limited, added, “Cobalt’s promising technology presents the opportunity to leverage Bunge’s sugarcane processing assets to produce new high-value products that diversify our revenue streams and enhance returns.”

Cobalt Technologies and Rhodia, a member of the Solvay Group, is partnering to develop and operate a biobutanol demonstration facility in Brazil. The plant will use Cobalt’s technology to convert bagasse (sugarcane by-product) and other local feedstock into bio n-butanol, which can be used as both a transportation fuel or industrial chemical.

“This agreement puts us on a clear path towards commercialization, which will result in the development of the first commercial-scale biorefinery using bagasse as a feedstock for the production of biobutanol,” said Bob Mayer, CEO of Cobalt Technologies. “We are very pleased to be working with Rhodia. Our corporate values and goals are aligned and Rhodia’s experience in the global chemical markets and long history of success in Latin America position us well for success.”

Work on the construction of the demonstration facility will begin in August 2012 and will be moved to a sugar mill site in early 2013 for testing. Operational testing is expected to be completed by Mid-2013.

Vincent Kamel, president of Rhodia Coatis Business Unit, added about the partnership, “We are convinced that Cobalt’s technology will provide an unmatched cost advantage over the long term, while also enhancing our sustainable development strategy related to our Augeo range of biosourced solvents. We look forward to our continued partnership, working closely with Cobalt to capitalize on the massive market opportunity for bio n-butanol in Latin American and beyond.”

Renewable oil producer Solazyme, Inc. and agribusiness and food company Bunge Limited broke ground on a 100,000 metric ton renewable oil facility right next to Bunge’s Moema sugarcane mill in Brazil. This press release says that the companies have also brought on as general manager Hildo Henz, an experienced engineer who has led major refinery projects during his career, to run the joint venture known as Solazyme Bunge Produtos Renováveis Ltda.

Mr. Henz brings over 20 years of experience in operations and management to his new role. Previously, he was the engineering director at Brenco, a Brazilian renewable energy company, where he led greenfield projects in excess of US$ 500 million. Prior to Brenco, Mr. Henz was CEO of Alberto Pasqualini – REFAP S/A, a Petrobras/Repsol joint-venture refinery in Brazil, where he led its US$ 1.3 billion expansion. He had previously served as a strategic planning manager at Petrobras in Rio de Janeiro, where he implemented new refining technologies.

“We are very happy to have broken ground on our Solazyme-Bunge joint venture facility on schedule and are also greatly pleased to have brought Hildo on board to run the JV. Hildo brings an unparalleled level of expertise that will enable successful plant commissioning and operations,” said Jonathan Wolfson, CEO, Solazyme. “He is a top-tier seasoned executive who has built, overseen and launched large manufacturing businesses and we are fortunate to have him as the General Manager.

Construction is expected to be complete late next year.

The Brazilian Sugarcane Industry Association (UNICA) has unveiled new industry data and statistics. UnicaData is a customizable tool designed to provide detailed industry information focused on the cane industry in Brazil. The free data is derived from third party institutions and features information on areas such as:

• Sugarcane harvest
• Quality of harvested cane
• Harvest projections
• Sugarcane production and processing
• Sugarcane acreage
• Consumption
• Exports and imports

Luciano Rodrigues, manager of UNICA’s Economics Department, said most of the data available should provide nearly all the information on the sugarcane industry needed. “On this first stage, we added the most sought after data as indicated by web searches involving our industry. We will continue to analyse the demand and gradually enhance and expand the content.”

Along with the ability to search for published reports, the tool can also develop customized reports as requested by a user. In the future, UNICA will enhance and expand the data provided.

The Brazilian Sugarcane Industry Association (UNICA) today announced the appointment of an interim CEO to replace Marcos Jank, who announced his resignation on March 27th.

UNICA’s Board of Directors has named the organization’s Technical Director, Antonio de Padua Rodrigues, to serve as interim CEO during the selection process, now underway, for a new chief executive.

A member of the executive team at UNICA since 1990, Rodrigues has been in the sugar-energy industry for more than 30 years and is the organization’s Technical Director since 2003. He is a former Administrative and Financial Coordinator of the Brazilian government’s National Program for the Improvement of Sugarcane, known as Planalsucar, and was also Administrative and Financial Supervisor for projects backed by Industry and Technology Secretariat at the Federal Industry, Trade and Technology Ministry. In 1983, he played a leading role in the introduction of SPCTS, the Sugarcane Payment System by Saccarosis Content, where he remained as a Consultant until 1990.

Marcos Jank became Board Chairman and CEO at UNICA in July of 2007 and has since spearheaded a period of significant achievements for the sugar-energy industry.

Accomplishments include a much more intense dialogue with all levels of government; progress in various areas relating to labor, the environment, social concerns and the regulatory framework; and the establishment of a strong international presence with offices launched in Washington, D.C. and Brussels. These were crucial steps for the non-renewal at the end of 2011 of the steep tariff imposed by the United States on imported ethanol.

“It has been a great honor to serve an industry that is so important to national life and is increasingly vital for the planet, given the growing range of low carbon solutions that sugarcane offers; the sector has a very promising future and I’m sure that the work done so far will provide a solid base for the progress that we will witness in the future,” said Jank, who brought forward his departure from UNICA because of national and international commitments linked to future activities in his professional life.

Brazil is expecting more sugarcane and more ethanol production in 2012.

According to the Brazilian Sugarcane Industry Association (UNICA), the forecast for the 2012/2013 sugarcane harvest calls for 509 million tons, up 3.19% compared to the total amount of sugarcane processed in the previous harvest, which totalled 493.26 million tons.

Data collected by UNICA, together with satellite image mapping of the South-Central region obtained from the National Institute for Space Research (CANASAT-INPE), indicates an expansion of 3% in the total area planted with sugarcane and available for the 2012/2013 harvest while no significant gains in agricultural productivity are anticipated.

Of the total projected sugarcane crush for the 2012/2013 harvest, UNICA estimates over half of the sugarcane in the 2012/2013 season (51.25%) will be used for ethanol production, which is expected to reach 21.49 billion liters, up 4.58% from last year’s 20.55 billion liters. That total includes 14.54 billion liters of hydrous ethanol, up 11% from last year, and the rest anhydrous, a drop of almost 7%.

UNICA is projecting a drop in anhydrous ethanol production because during six months of the 2011/2012 harvest, Brazil’s mandatory ethanol blend with gasoline remained at the 25% level, 5% above the 20% blend currently in place. The organization notes that the projected production for each type of ethanol in the new harvest was calculated considering the current blend rate. “Should the percentage required by the government change during the harvest, hydrous and anhydrous ethanol volumes will also be revised by UNICA.” UNICA is also projected a drop of more than 8% in ethanol exports, which would bring the exported total down to 1.70 billion liters, compared to 1.85 billion liters in the 2011/2012 harvest.

According to UNICA Technical Director Antonio de Padua Rodrigues, current estimates indicate that the Brazilian fleet of flex-fuel automobiles and motorcycles will increase by 7% during the 2012/2013 harvest, an expansion rate that’s slightly below the projected increase in production o hydrous ethanol. “This means we are likely to observe a slight increase in the consumption of hydrous ethanol by flex-fuel vehicles during the next harvest,” he said.

A report from Rabobank’s global Food & Agribusiness Research and Advisory department is looking at the future of ethanol from the perspectives of both Brazilian and United States markets.
Rabobank first points out significant changes in U.S. ethanol policy starting in 2012. The VEETC blending credit and a tax on ethanol imports both expired in December 2011 and U.S. ethanol industry groups have shifted their political weight toward initiatives like E15 and advanced biofuels.

Although these developments improve Brazil’s access to the U.S. ethanol market in 2012, the reality is that the Brazilian cane industry may struggle to fully satisfy even its own domestic demand in 2012 owing to a sharp downturn in cane production and an uncertain outlook for output growth.

Brazil became the leading importer of ethanol from the U.S. in 2011.

“Despite the expiration of the tax credit and currently negative margins, we expect U.S. ethanol production to increase slightly in 2012 as an increase in mandated levels of production offsets what we expect to be a decline in exports,” says David C. Nelson, Global Strategist for Grains & Oilseeds with Rabobank’s Food & Agribusiness Research and Advisory group. “The outlook for exports is heavily dependent upon what happens with the sugar crop in Brazil, the U.S.’s biggest export competitor. Rabobank’s outlook for higher U.S. ethanol production is also predicated on regulatory approval for E15. If E15 is adopted by just 10 Midwest states, that will alleviate current blend wall restrictions.”

Andy Duff, Global Strategist for Sugar and Head of Rabobank’s Food and Agribusiness Research and Advisory Group in Brazil, adds, “Rabobank believes that the abolition of the U.S. import tariff on ethanol represents a significant opportunity for the Brazilian cane sector in the medium to long term. However, in the next few years the focus of the Brazilian industry is likely to be keeping up with the growth of potential consumption in the domestic market, which will continue to rise as a result of expansion of the flex-fuel fleet.”

Read more of Rabobank’s future outlook for ethanol in the United States and Brazil.

Brazil is reportedly planning to pump $38 billion into its ethanol sector to help increase production.

A statement from Brazil’s Ministry of Agriculture said the purpose of the government plan is to “meet growing national demand and the potential of the foreign market for ethanol” by stimulating private sector investments in the production of ethanol, which have declined due to market conditions.

In response, Growth Energy CEO Tom Buis noted that since both the Volumetric Ethanol Excise Tax Credit (VEETC) and the tariff on ethanol imports from Brazil expired at the end of 2011, Brazil’s action puts U.S. ethanol at a disadvantage.

“The American ethanol industry voluntarily gave up its tax incentives and the import tariff against Brazil, even though Brazil continues to have a tariff on the books and is pumping $38 billion toward propping up their industry. This shows the danger of unilaterally disarming, because it means that American ethanol producers are not competing just against Brazilian ethanol producers – but against the Brazilian government as well,” said Buis. “The U.S. unilateral disarmed at a time when Brazil is not just continuing to subsidize its industry, but is increasing its investment in a plan to undermine our domestic ethanol industry.”

Brazil’s ethanol output has been dropping in recent years, while U.S. ethanol exports to Brazil have been increasing. The government plan would raise the percentage of anhydrous ethanol to gasoline to 25% and provide incentives for increasing both sugarcane acreage and ethanol processing plants.

A lower percentage of ethanol required to be blended with gasoline in Brazil is resulting in lower ethanol sales, according to the Brazilian Sugarcane Industry Association (UNICA).

UNICA reports that ethanol sales by mills in the South-Central region totaled 1.29 billion liters in January, a drop of 32.32% compared to the 1.90 billion liters sold during the same period in 2011. Of this year’s total for January, 1.24 billion liters remained in the domestic market and only 42.44 million liters were exported.

January anhydrous ethanol sales totaled 483.91 million liters, down from 584.38 million liters during the same period of last year. As for hydrous ethanol, 760.40 million liters were sold during the month, down sharply from 1.23 billion liters during the same period of the 2010/2011 harvest.

The drop in anhydrous ethanol sales is the result of a cut in the amount of ethanol blended with gasoline which went into effect in 2011, according to UNICA Technical Director Antonio de Padua Rodrigues. “If the blend level had remained at 25%, sales in January 2012 would have been greater than in January of 2011,” he added.

*Updated with clarification comments from UNICA*

The president of the Renewable Fuels Association (RFA) this week wrote a letter to the U.S. Trade Ambassador asking for an investigation into news that the Brazilian state of Sao Paulo was imposing a 25% tax on all imported ethanol.

“Because ethanol produced in Sao Paulo is tax exempt, ethanol imported into Sao Paulo from the United States and other areas is at a substantial economic disadvantage,” wrote RFA President and CEO Bob Dinneen to Ambassador Ron Kirk. “We believe this action is discriminatory and may severely—and immediately—restrict the exportation of U.S. ethanol to Brazil.”

Dinneen is pictured here sharing a lighter moment with Marcos Jank, president and CEO of Brazil’s UNICA during a session at the 2011 National Ethanol Conference.

In early December, the nation of Brazil extended a temporary suspension of a 20% federal tariff on imported ethanol.
“This action not only effectively reinstates the tariff on U.S. exports, but increases it by 5%,” wrote Dinneen. “Moreover, we believe the action taken by the state of Sao Paulo is in violation of Article III:4 of the Generalized Agreement on Tariffs and Trade (GATT) and possibly Article 2.1 of the World Trade Organization’s (WTO) Technical Barriers to Trade Agreement.

Port Santos in Sao Paulo is the main port of entry for U.S. ethanol exports to Brazil, which accounted for an estimated 400 million gallons in 2011.

*In response to the RFA’s letter and resulting media reports, UNICA released a statement from president Marcos Jank noting that the Sao Paulo tax is a pre-existing value-added tax (VAT), known as ICMS (Goods and Services Tax), which is not equivalent to the return of Brazil’s tariff on imported ethanol.

According to UNICA, the deferment period started on October 1, 2011 and is now scheduled to end on March 1, 2011.