Domestic Fuel

An Australian ethanol producer has received the first completed commercial certification from the Roundtable on Sustainable Biofuels (RSB).

The Manildra Group, through its subsidiary Shoalhaven Starches Pty Ltd, produces bioethanol from starchy wastewater generated by their wheat processing facility in New South Wales, Australia. The RSB certification means that “Manildra offers tangible evidence that sustainable biofuels may be efficiently and economically produced at a large scale while adhering to ambitious social and environmental standards.”

The RSB Certification System allows farmers, feedstock processors and biofuel producers to demonstrate that their operations comply with ambitious yet practical safeguards, including, but not limited to, the protection of natural or rare ecosystems, food security, and the respect of human rights
to land, water and decent work conditions, and the management of water resources.

The Roundtable on Sustainable Biofuels is a multi‐stakeholder initiative launched and hosted by the Energy Center of Ecole Polytechnique Fédérale de Lausanne (EPFL), Switzerland.

*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.

As the Global Forum for Food and Agriculture draws to a close in Berlin, the Global Renewable Fuels Alliance (GRFA) has challenged new United Nation’s Food and Agricultural Organization (FAO) Director General Jose Graziano Da Silva on his critique of biofuels and their alleged impact on commodity prices.

“Mr. Da Silva has failed to recognize that the rising price of energy is the primary driver in the rising cost of all commodities including corn and sugar,” said GRFA spokesperson, Bliss Baker.

Many international organizations have back tracked on their criticism of biofuels based on research which has found biofuels to have played a very minor role in the escalation of food prices globally. In fact, David Hallam, the FAO’s own Deputy Director has said that “unexpected oil price spikes could further exacerbate an already precarious situation in food markets.”

“Mr. Da Silva would do well to listen to the International Energy Agency’s dire warnings about our energy security future when commenting on biofuels,” said Baker. “The IEA concluded that biofuels could provide 27 percent of total transport fuel by 2050 and avoid around 2.1 gigatonnes of CO2 emissions per year when produced sustainably without jeopardizing food security,” said Baker.

The GRFA has repeatedly called for an increase in the use of biofuels to help reduce the world’s crippling reliance on crude oil.

“I would urge the new FAO Director General to focus on the real cause of high food prices – the rising cost of energy,” added Baker.

The world is heading for an insecure and inefficient energy future unless there is a “bold change of policy direction” soon, warns a new report from the International Energy Agency (IEA).

The 2011 edition of the World Energy Outlook (WEO), released by IEA last week in London, said there is still time to act, but the window of opportunity is closing. “Growth, prosperity and rising population will inevitably push up energy needs over the coming decades. But we cannot continue to rely on insecure and environmentally unsustainable uses of energy,” said IEA Executive Director Maria van der Hoeven. “Governments need to introduce stronger measures to drive investment in efficient and low-carbon technologies.”

According the report, oil demand will rise 14% between 2010 and 2035, from 87 million barrels per day in 2010 to 99 million in 2035. All net increases in oil demand will come entirely from the transportation sector in emerging economies as economic growth pushes up demand for personal mobility and freight goods.

“This is a deeply disturbing picture that the IEA has painted for the world,” said Bliss Baker, spokesperson for the Global Renewable Fuels Alliance. “Such increases are unsustainable making it imperative that all countries quickly bring real crude oil alternatives to market.”

Baker says that according to the report, an amount equivalent to twice the current total oil production of all OPEC countries in the Middle East must be discovered and brought to market by 2035.
“This is a wakeup call to the world that we need to further promote biofuels to meet this ever growing energy demand,” he said.

The IEA also highlighted the potential for supply disruptions in the Middle East and North African countries as a potential threat to world oil supplies saying that “If, between 2011 and 2015, investment in the MENA region runs one-third lower than the $100 billion per year required…consumers could face a substantial near-term rise in the oil price to $150/barrel.”

The association which represents European ethanol producers is requesting that the European Commission take action “against unfair imports of fuel ethanol from the United States.”

ePure claims that U.S. ethanol policy has encouraged production to the point that it can be sold at much lower prices on the world market. “Massive and sudden imports of US ethanol, combined with unfairly low prices over the last few years, have seriously damaged the economic situation of European producers” said ePure Secretary-General Rob Vierhout. “The unfair competition of US imports is simply depriving the EU industry from the benefit of this positive evolution on its own domestic market.”

According to the Renewable Fuels Association, ePure is specifically alleging that international ethanol traders were exporting E90 (90 percent ethanol blends) to Europe to take advantage of the European Union’s (EU) lower tariff on such blends as well as the $0.45 per gallon tax credit (VEETC) for ethanol blending in the U.S.

The RFA disputes the allegations. “Moreover, the U.S. ethanol tax incentive that lies at the root of the European allegations will expire at the end of 2011, rendering the tax incentive portion of the alleged trading impossible in the future. Importantly, domestic ethanol producers are not eligible for the tax incentive referenced by the Europeans. That tax incentive is specifically made available to gasoline blenders, marketers, and other end users. Therefore, U.S ethanol producers cannot nor should not be the focus of any potential European action.” The bigger issue, notes RFA, is the EU tariff schedule that encourages the import of E90 blends by classifying them at a lower tariff rate than other ethanol imports.

RFA says U.S. ethanol “remains the lowest cost, most cost effective ethanol in the market today. This fact has led to a surge in U.S. ethanol exports to Brazil, Europe, Asia, and the Middle East.”

The U.S. has become a net exporter of ethanol since the beginning of 2009 and exports continue to increase at a rapid pace. The latest reported figures for August from the Energy Information Administration showed 456,000 gallons of imports versus export demand of 52.3 million gallons. Through August, net exports are running at about 15.2 million barrels and are on pace to be double last year.

A strong supporter of ethanol was honored this week for his efforts to fight hunger and poverty in Brazil.

Former Brazilian President Lula da Silva was recognized with the 2011 World Food Prize for his Zero Hunger strategy, which resulted in Brazil reducing by half its proportion of hungry people (with 93 percent of children and 82 percent of adults eating three meals a day) and also reduced the percentage of Brazilians living in extreme poverty, from 12 percent in 2003 down to 4.8 percent in 2009.

At the same time he was fighting hunger, President Lula was supporting a strong biofuels policy in Brazil, making the case before the United Nations in 2008 that it was possible for a country to produce ethanol and biodiesel to “reduce dependency on fossil fuels and at the same time create jobs, regenerate degraded land and expand food production.”

Brazil is currently the second largest producer of ethanol in the world, behind the United States, and uses sugarcane as a feedstock.

Ethanol plant design company ICM, Inc. of Colwich, Kansas has designed and constructed equipment for a “one gallon per minute ethanol plant” currently under construction in Mozambique that will use locally grown cassava as a feedstock.

The project is part of CleanStar Mozambique, a company founded by Novozymes and CleanStar Ventures to protect forests, produce food, deliver energy, reduce air pollution and enrich lives. The vision of CleanStar Mozambique is to implement sustainable farming practices for smallholder farmers, and to integrate a food and energy production facility that will result in improved health and economic benefits for the people of Mozambique.

“We’re thrilled to collaborate with Novozymes and CleanStar Ventures in this project,” said Dave Vander Griend, president and CEO of ICM. “Our employees put a tremendous amount of thought into the design in order to determine what equipment will work best for a location that has limited capabilities for overnight delivery. We are very proud to support CleanStar Mozambique in reducing exposure to breathing charcoal smoke through enhanced cooking practices, and improving the health and livelihood for millions of people living in the developing world.”

ICM’s Manufacturing division produced the shop-fabricated and specialty equipment components for the ethanol plant, which is designed to convert 18 pounds of locally grown cassava chips into a gallon of 185+ proof ethanol. Company officials say the reason the plant capacity is given in a “one gallon per minute” figure instead of the customary annual production number is that unlike plants in the United States, the Mozambicans do not have the ability to run the ethanol plant continuously, so the plant was specifically designed with the capability to start up in the morning, cease in the evening, and start up again the next morning. ICM has sized the cassava milling and cook process to operate 10-12 hours a day, and the small plant will include three fermenters and a beer-well. The distillation is sized to operate continuously, but the plant can begin and cease operations as needed.

ICM is providing a graphic control panel that contains the essential basics for motor control and flow control and during the start-up phase, ICM personnel will train the new plant operators in Mozambique.

Two international organizations are recommending reform of fossil-fuel subsidies to improve the economy and the environment.

An analysis by the International Energy Agency (IED) and the Organisation for Economic Co-operation and Development (OECD) found that governments and taxpayers spent about half a trillion dollars last year supporting the production and consumption of fossil fuels and that removing such subsidies would raise national revenues and reduce greenhouse-gas emissions.

OECD and IEA say fossil fuel subsidies “create wasteful use of energy, contribute to price volatility by blurring market signals, encourage fuel smuggling and lower competitiveness of renewables and energy efficient technologies.”

The G20 leaders in 2009 agreed to phase out subsidies that “encourage wasteful consumption, reduce our energy security, impede investment in clean energy sources and undermine efforts to deal with the threat of climate change”. According to the IEA, since that agreement subsidies for fossil fuel globally have increased by $110 billion to $409 billion in 2010 and could reach $660 billion by 2020 despite the G20 countries commitment.

“As we strive to develop alternatives to oil we must recognize that alternative fuels are not competing on a level playing field,” said Bliss Baker, spokesperson for the Global Renewable Fuels Alliance. “These massive multi-billion dollar crude oil subsidies completely outweigh current biofuel incentives and are a serious obstacle to the development of cleaner greener alternatives. Oil has a huge competitive advantage financed by global taxpayers.”

Baker notes that the G20 will meet in France next month and the issue of oil subsidies is on the agenda. “It is time for the G20 to show leadership and reverse this practice of never-ending subsidies to big oil,” Baker said. “It is time to move beyond crude oil and into a world with sustainable alternatives such as biofuels and other renewable forms of energy.”

The Global Renewable Fuels Alliance (GRFA) is calling comments made this week by a Qatari government advisor about biofuels contributing to world hunger “self-serving.”

At a global grains summit in Turkey on Monday, Quatari food security program advisor Mahendra Shah was quoted as saying, “Biofuels will trigger an increase in agricultural prices. Biofuels will result in another 120 million people hungry, just because we’re growing biofuels.” He cited a study by the Organization of the Petroleum Exporting Countries Fund for International Development (OFID) which claims the use of crops for biofuels is forecast to raise food prices by 30 percent to 50 percent by 2050.

Noting that the report cited was funded by OPEC’s International Development arm, GRFA spokesperson, Bliss Baker said, “This so-called report from 2009 cannot withstand any level of academic scrutiny and is a self serving attempt to distract people from the real impact that energy prices are having on global commodities.”

“Qatar, a key OPEC member and promoter of this report, derives 85% of its export earnings and over 70% of its government revenues from crude oil. Qatar’s agenda is to promote crude oil and discredit alternatives like biofuels,” Baker added.

According to GRFA, there is evidence that demonstrates that the OFID report is wrong, including a 2011 study by the International Energy Agency that says “by 2050, biofuels could provide 27% of total transport fuel” and will “not compromise food security”. The GRFA recently published data showing a clear and direct link between crude oil prices and the UN FAO’s Food Price Index.

Last week I attended the 2011 IFAJ Congress in Canada. This is the International Federation of Agricultural Journalists. One of our stops was the Hensall District Co-operative. We were welcomed by CEO, Earl Wagner, who gave us an overview of the various business units of the co-operative.

HDC is a diversified farmer-owned Ontario Agricultural Co-operative. Established in 1937, HDC is the largest independent agricultural co-operative in Ontario with 4000 members who elect 10 Board of Directors. HDC employs 300 staff members with annual sales of 328 million.

One of our group asked him if HDC had gotten into the ethanol production business and he said that they have not. However, they did sell some land a few years ago to GreenField Ethanol who intended to build a plant but to date hasn’t done so. HDC does sell corn and Earl says that the demand for corn for ethanol production has been a good thing. As you can see from the pumps at the home base location, they sell ethanol blended gasoline. You can listen to my interview with Earl here: Interview with Earl Wagner

Local youth in Durban, South Africa will be participating in a two-week solar training course compliments of Greenpeace. The 30 youth will learn about solar photovoltaic (PV) and other renewable energy technologies in addition to completing course modules covering social entrepreneurship and Greenpeace’s Energy (R)evolution report.

The PV panels were donated by the SunPower Foundation and will be installed as part of the solar training course. Once installed, the four SunPower solar panels will generate energy for two Greenpeace Africa mobile solar showcase units. They will be on display during the 17th session of the Conference of Parties (COP 17) to the United Nations Framework Convention on Climate Change (UNGCCC) taking place in Durban November 28-December 9, 2011. Each unit will utilize solar-powered multi-media technology devices, including televisions, laptops and sound systems.

“With this donation, the SunPower Foundation remains true to its mission — to empower the world’s next generation of solar leaders,” said Tom Werner, SunPower president and CEO. “We hope that the Greenpeace Solar Training course will inspire local youth to explore solar technology and create renewable solutions for energy needs in this part of the world and beyond.”

In addition to the donation of the four panels. SunPower Foundation has also announced its plans to solarize the Greenpeach Africa Johannesburg headquarters with a SunPower rooftop system later this year. Olivia Langhoff, campaigns director for Greenpeace Africa added, “This donation provides an impetus for investment and is a demonstration that renewable energy solutions are feasible.”

It seems like it won’t be long before aircraft flying with biofuels is an everyday occurrence. The latest test flights were conducted by Embraer and GE flying a EMBRAER 170 jet from the Company’s Gavião Peixoto facilities. The purpose of the tests were to benchmark the operational characteristics of the airplane and its GE CF34-8 engines when flying with a HEFA fuel – a biofuel blend comprised of hydro-processed esters and fatty acids.

The 50 percent HEFA biojet fuel blend, derived from camelina, has received recent approval by ASTM. As a result, Embraer said they are stepping up their efforts to develop a broader range of sustainable biofuels for aviation. To date, the tests of the biojet blend have been successful and future tests are planned.

“We have a strong and longstanding commitment to developing efficient and environmentally responsible products,” said Mauro Kern, Embraer Executive Vice President of Engineering and Technology. “This series of tests, and their very positive results, gives us a lot of new information to continue our sustainability program as it relates to future products. Supporting the development and deployment of sustainable aviation biofuels is one of the industry’s top priorities, and we are firmly engaged in that effort.”

Next steps for the two partners include testing other feedstocks and production pathways for production of the biofuels.

“This could encompass a broad range of pursuits, from testing of additional fuel production pathways and feedstocks, to potentially increasing HEFA blend levels,” added Laurent Rouaud, Chief Marketing Office, GE Aviation. “These flights have also demonstrated that the aircraft and engine manufacturers are also interested in limiting net carbon emissions from their ongoing product development activities, and in working with producers to establish early production demand for the benefit of the entire aviation enterprise.”

The biofuel industry was invited to tour OriginOil’s algae technology during the recent Algae World Australia conference. The end-to-end algae production project is located in North Queensland, Australia. Riggs Eckelberry, company CEO, spoke during the conference and joined the visitors touring the facility, which is operated by their partner MBD Energy on the James Cook University campus (JCU) in Townsville.

“We were incredibly impressed with the professionalism that the joint MBD and JCU team showed in putting on this site visit,” said Eckelberry. “Next-generation algae production has been integrated into an end-to-end system for the first time, and we’re proud to be part of this effort.”

The tour also included the Tarong Power Station, near Brisbane, where visited were able to check out a new industrial demonstration site that MBD is building to capture flue-gas CO2 produced by the coal-fired power plant. MBD plans to use the large-scale OriginOil Single Step Extraction systems to harvest algae at the one hectare site.

According to the Worldwatch Institute, despite a struggling global economy, biofuel use continues to climb. In 2010, global biofuel production increased 17 percent and reached an all-time high of 105 billion liters, up from 90 billion litres in 2009. The increase in biofuel production has been driven by several factors including high oil prices, a global economic rebound and new laws and mandates in several countries including Canada, China, the U.S., Brazil, and Argentina.

The research was conducted by Worldwatch’s Climate and Energy Program for the website Vital Signs Online. It also found that U.S. and Brazil remain the two largest producers of biofuels with the U.S. producing 49 billion litres or 57 percent of global output and Brazil producing 28 billion litres or 33 percent of the total. For both the U.S, and Brazil, high oil prices were a major factor for production.

“In the United States, the record production of biofuels is attributed in part to high oil prices, which encouraged several large fuel companies, including Sunoco, Valero, Flint Hills, and Murphy Oil, to enter the ethanol industry,” said Alexander Ochs, Director of Worldwatch’s Climate and Energy Program.

Ochs continued, “Although the U.S. and Brazil are the world leaders in ethanol, the largest producer of biodiesel is the European Union, which generated 53 percent of all biodiesel in 2010. However, we may see some European countries switch from biodiesel to ethanol because a recent report from the European Commission states that ethanol crops have a higher energy content than biodiesel crops, making them more efficient sources of fuel.”

Vital Signs authors Sam Shrank, a Worldwatch MAP Sustainable Energy Fellow, and Farhad Farahmand, a Climate and Energy research intern, also explored how new mandates in Argentina, Brazil, Canada, and China have altered the biofuel industries in these countries. “In Argentina, the biodiesel industry grew not only because of favorable conditions for growing soybeans, but also in response to a new B7 blending mandate, which requires the fuel to be 7 percent biodiesel and 93 percent diesel.”

You can click here to learn more about the study.

If you are an advanced biofuels company based in Canada that needs funds, then you might not have to look any further than the NextGen Biofuels Fund. The fund was created by the Government of Canada to support development of advanced biofuels. Currently, Sustainable Development Technology Canada (SDTC) is issuing a Call for Applications.

“By helping to create biorefineries, the NextGen Biofuels Fund also aims to add value to renewable fuel production while diversifying the economy in rural and agricultural areas and supporting market and technology transitions in the forestry sector,” said SDTC President and CEO Vicky Sharpe. “This will be crucial in helping Canada to transition to a bio-based, sustainable economy.”

The NextGen Biofuels Fund is able to support up to 40 percent of eligible project costs and the funds are repayable based on free cash flow over a period of 10 years after the project is completed.

To be eligible, a project must:

• • Be a First-of-Kind facility that primarily produces a next-generation renewable fuel at large demonstration-scale.
• • Be located in Canada.
• • Use feedstocks that are or could be representative of Canadian biomass.
• • Have demonstrated its technology at pre-commercial scale.

For more information on how to apply, visit www.sdtc.ca.