Another blow for Germany
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This month saw the return of the 2nd annual Biofuels International expo & conference in Amsterdam in the stunning venue of the Beurs van Berlage, the city’s former stock exchange. And despite the overall doom and gloom in the European biofuels industry at the moment, most delegates remained upbeat and positive for the future. The state of the German market – as always – featured prominently, and...
those producers speaking, such as EOP Biodiesel and 3B Biofuels, were even hinting that the industry was settling down and starting to look up again. Most were unsurprisingly pleased by the EU’s decision in early March to impose duties on imports of US biodiesel. And Karl Giersberg, chief financial officer at EOP Biodiesel, was even making noises about biodiesel production becoming profitable again in Germany, following the rise in crude oil prices and only a moderate rise in costs for rapeseed oil, the main raw material.
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RFS-2 dedate rages on
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Manning Feraci, VP of Federal Affairs for the National Biodiesel Board (NBB), has again outlined his fears this month regarding the Environmental Protection Agency’s (EPA) proposed Renewable Fuel Standard (RFS2) rules. ‘We recognise that statute requires the EPA to consider significant indirect emissions when calculating a renewable fuel’s emission profile,’ he explained to the hearing. ‘But this...
does not require the EPA to rely on faulty data and to fabricate unrealistic scenarios that punish the US biodiesel industry for wholly unrelated land use decisions in South America. ‘Make no doubt about it – this is what the EPA’s proposed rule does. Biodiesel produced from domestically produced vegetable oils is disqualified from the biomass-based diesel programme, making it all but impossible to meet the volume goals established by statute.
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US biodiesel producers in strife with market realities
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Spot prices for FAME biodiesel – now the dominant biodiesel type traded – have outpaced the advance by the index setting heating oil contract, which is used as the benchmark price for diesel fuel sold in the US. The upsurge is holding the premium for FAME-derived biodiesel above the $1 (€0.72) gallon blender’s tax credit, diminishing the incentive to mix biodiesel into diesel. This highlights the...
limited market demand for biodiesel in the US, with blending consumption not only inhibited by its higher price point, but also because of a supply surplus for diesel fuel. Price assessments are frequently notional as a result. Interesting too is that trading for compliance credits to meet the Renewable Fuels Standard (RFS) in the US is often more active than trading for physical biodiesel supply. Called Renewable Identification Numbers, biodiesel RINs are actively discussed and frequently traded even though implementation of the biodiesel mandate in RFS2 was delayed from this year to 2010. RINs are to be reported to the US Environmental Protection Agency (EPA) quarterly and annually by oil refiners and importers to show that they are in compliance in meeting their share of the RFS, which is 11.1 billion gallons of renewable fuel in 2009.
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Pond powered ethanol
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Producing biodiesel from algae is the latest craze in the US, brought to the forefront again this month by the high profile demise of Massachusettsbased Greenfuel. The company, which struggled for eight years to commercialise its algae production system, shut down completely in May and is now selling off its assets. Although Greenfuel did not make it, there are around 50 other algaebased...
biodiesel companies in the US still persisting. But there are very few looking at using algae to produce the other major biofuel, bioethanol. Florida-headquartered Algenol believes it is taking a fresh, innovative approach to producing biofuels, using direct to ethanol technology, and has chosen Mexico for the location of its first industrialscale ethanol facility. Algenol signed a deal with BioFields nearly two years ago now, and has committed $850 million (€600 million) to build the facility near the Pacific coast close to Cabo San Lucas. Although the company ideally wants a plant on US soil, land in Mexico is half the price, and by locating here Algenol has secured a 1km corridor next to the ocean. Back in 2007 ethanol in Mexico was extremely unpopular as many believed using corn to make biofuels was the cause of rising tortilla prices.
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Soyabean Eldorado
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Soyabean has been a key part of the recent economic miracle in Argentina, the world’s largest exporter of soya oil and the third biggest global producer. With its enormous feedstock cost advantage over biodiesel producers anywhere else in the world, biodiesel production has become an attractive investment opportunity for the integrated crushing industry in recent years. In addition to a strong...
experience as a leader in exporting vegetable oils (around 90% of production is exported), modern facilities for grain storage and conditioning in shipment ports, three other key resources have turned the country into an Eldorado for biodiesel production: huge and inexpensive available land, low labour costs since the Peso’s devaluation and flexibility in the implementation and the growth of various oilseed crops. With no domestic mandate before 2010, the focus has been exclusively on large-scale production for the export market. In 2008, Argentina produced around 5% of the world’s total biodiesel production, becoming the fifth largest biodiesel producer after Germany, the US, France and Brazil, as well as the second largest exporter. However, in the last few months, low diesel prices have affected global demand for biodiesel, and several Argentinean plants were forced to halt production for the first time ever. In addition, the spread between SME (Soyabean Oil Methyl Ester) and soyabean oil FOB Rosario prices closed at the beginning of 2009. Projections of growth in the industry are now delayed, with new plants and several expansions postponed due to the lack of funding resulting from the financial crisis.
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Cocaine or sugarcane?
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Crime, drugs and violence are usually the first things to spring to mind when someone mentions Colombia, but the situation is changing. The country is now emerging as a safe and vibrant travel destination, and at the same time, a sound investment opportunity for emerging markets like biofuels. The country’s economy is experiencing a period of sustained growth, and Merrill Lynch has even rated...
Colombia as the fourth country with the least risk of financial crisis. As an example of this transition, when looking just at the number of murders per 100,000 inhabitants in 2006, Bogata is now, on paper, safer than Washington D.C. This is also reflected in the increasing numbers of visitors to the country, which have doubled since 2005.
Colombia is the world’s fifth largest palm oil producer and has the highest sugar productivity in the world, so it is no surprise that it is now one of the biggest producers in South America, after Brazil. But it is still lacking the foreign investment it needs to make the most of its potential. The government is promoting the development of the sector because it believes that biofuels are an effective way of increasing living standards for agricultural producers and reducing poverty in the country - Colombia’s fuel ethanol industry alone employs around 89,000 people. As an incentive companies which invest in building biofuel capacity in Colombia benefit from a low tax rate of 15%, as long as the investment is for at least $16.4 million (€12 million) or involves creating 500 or more jobs. And this seems to be working. Foreign companies that have already invested in ethanol projects in Colombia include London-based soft commodity merchant ED&F Man, which invested with a Latin American partner in a $240 million project being developed to make ethanol in the central Boyaca region.
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One answer to the ethanol crisis?
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Producing biobutanol from traditional ethanol feedstocks may not seem that far off, but when you hear what Richard Branson is planning to do with it, it does start becoming a little far-fetched. Virgin Galactic, a subsidiary of the Virgin Group, is constructing a mothership space tourist vessel capable of running in part on biobutanol. Back on earth, renewable fuel players are eyeing-up...
biobutanol as a fuel with many synergies with ethanol, which could enhance, rather than supplant the current industry. Striving for the ultimate biofuel Corn-based ethanol does not match the qualities and performance of petrol, so the ultimate goal would be a fuel that is as close to petrol as possible without the environmental drawbacks that using fossil fuels bring. Ethanol contains approximately 34% less energy per unit volume than petrol, meaning in theory burning pure ethanol in a vehicle will result in a 34% reduction in miles per US gallon, given the same fuel economy, compared to burning pure petrol.1 Tests conclude that the energy content of biobutanol is 95-98% that of petrol. Biobutanol, as a fuel, has several other advantages over ethanol. Unlike ethanol, it can be a direct replacement for petrol in an unmodified internal combustion engine with only a 10% or less loss in energy density. It also has lower vapour pressure (biobutanol 5.6 hPa, ethanol 58.5 hPa) and a higher flashpoint (biobutanol 36?C, ethanol 12?C).
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2nd Biofuels International expo & conference: a resounding success
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Biofuels International magazine’s twoday conference and exhibition in Amsterdam attracted over 200 delegates from around the globe, and sparked discussions on new EU policies, the effects of splash ‘n’ dash and the future of second generation biofuels. Educational streams throughout the event focused on future feedstocks, cellulosic ethanol, BTL, storage and handling and improving fuel...
performance and quality. Highlights from the event included Lionel Clarke from Shell Global Solutions who kicked off the second day by giving the oil major’s perspective on where it believes the industry is heading. Shell recently announced that it favours biofuels over other forms of renewable energy such as wind and solar power, and beyond this the company believes feedstocks such as algae show more promise than the likes of jatropha. Oliver Hancock, MD of 3B Biofuels in Germany, spoke about the ever-topical changing European biodiesel market dynamics. Hancock believes that the market is in transition and will now enter a sustained period of consolidation. He notes that at least, operationally, the industry is settling down, but hopes that EU Governments will align Biofuels International expo & conference review biofuels ???????????????????????????????????????????????????????????????????????????????????????? ???????????????????????????????????????? ???????????????????????????????????????????????? ???????????????????????????????????????????????????????????????????????????????? ???????????????????????????????????????? ???????????????????????????????????????????????? ????????????????????????"???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? themselves and give the business a chance to thrive. The Renewable Energy and Fuel Quality Directive, Hancock notes, would certainly help, but that for the time-being, the fundamentals are so weak that producers across the EU continue to struggle. He sees the recent rally in commodity prices as a ‘bear market bounce’ and that a correction is likely in the coming weeks. At the end of the day he predicts the biodiesel game will continue to be a balance between price, quality and profi le. Although the general tone of the event was that the biofuels industry is experiencing a current lull in Europe, the timely launch of Neste Oil’s renewable plant in Rotterdam shows the market is still moving forward in order to meet sustainability and production targets. Neste Oil has now laid the foundation stone for its new renewable diesel plant in Rotterdam, which will have an annual production capacity of 800,000 tonnes. From other producers the outlook also remains very positive, although most are still holding out for second generation production, which many believe will have a dramatic impact on the sector. Karl Giersberg, chief fi nancial offi cer at EOP Biodiesel, for example, was able to encourage delegates by giving his experiences as one of the few producers in Germany that is coping in the current climate. And Keeley Bignal, carbon and sustainability offi cer from the Renewable Fuels Agency, was able to share the effectiveness of the UK’s RTFO reporting scheme for driving the sourcing of sustainable biofuels. Looking beyond the sustainability concerns of today, tomorrow’s world looks to be full of next generation promises. Denmark-based Inbicon’s wheat strawbased demonstration plant is scheduled for start-up in December this year with an annual production of 5.4 million litres. Michael Persson, VP for fi nance and corporate affairs of Inbicon, says that a demo plant, however, is not enough and the company is now pursuing an opportunity to design and build a 20 mgy standalone second generation plant in collaboration with companies in the US. Wheat straw is one of a handful of feedstocks being discussed for second generation; others include the grasses, namely switchgrass and miscanthus. Miscanthus is currently co-fi red with coal in power plants for electricity generation. Once planted the crop produces annually for 15 years or longer. UKbased Developer Bical has identifi ed miscanthus as the leading crop for the US, a 40 million acre market. Before this gets off the ground that all-important initial step of pre-treatment must be carefully considered. Johan van Groenestijn, project leader at the Netherlands-based research organisation TNO, pointed out the pretreatment methods under development, leaning towards enzymatic hydrolysis, with a move to ammonia fi bre and steam explosion this year. While ammonia has obvious storage and environmental concerns, allocating an ethanol plant near a power plant and using steam generation has a world of clean advantages. If you missed the conference you are still able to purchase the presentations at a cost of €320 for both days. Please email Margaret@biofuels-news. com for more information. The dates for the 3rd annual Biofuels International expo & conference have yet to be announced so continue to check www. biofuelsinternationalexpo. com for further details.
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Hub production: the cost-effective choice for enzymes
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While the amount of enzymes needed to produce ethanol from starch-based substrates is very low, relative to the amount of feedstock used, the complexity of cellulosic-based feedstocks can require as much as 100 times the amount of enzymes needed for starch conversion. The enzyme production discussion revolves around the cost of the enzymes. ‘Some believe it is cheaper to run small enzyme...
fermentation tanks at individual biorefineries,’ says Per Olesen VP of development and optimisation management at Novozymes. ‘There are the obvious benefits regarding reduced raw material, transportation, and refining costs, but there are other influences that point us towards hub production. In the long run, we feel that hub production is definitely the most cost-effective solution.’ He continues: ‘Although transportation costs can be significant when having to ship large amounts of enzymes to biorefineries, other costs are reduced by using a centralised production system. Economies of scale, constant high use of production capacity, optimal plant management, and process as well as product implementation set-up are important when considering the big picture. And all of these considerations are more efficient in a hub model.’
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Waste not, want not
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The use of waste vegetable and animal oils and fats to make fuel is not to everyone’s tastes. Animal hides, skins and tendons, used chip fat and waste frying oil full of takeaway food remnants do not make a pretty sight, nor do they have a pleasant odour. But a number of companies has been attracted by the smell of money made from what would otherwise be incinerator fodder or poured down the...
drain. Neste Oil in Finland is one of them and has set itself a target of growing its clean fuels activities to become the world’s largest producer of renewable diesel. The company devised its Next Generation Biomass to Liquid (NExBTL) technology to switch fl exibly between vegetable oil and waste animal fat, or a mix of the two, inaugurating its application at its fi rst such plant, with a capacity of 170,000 tonnes a year, at Porvoo, Finland in 2007. The company is, in the words of its communications manager Hanna Maula, ‘buying up every single scrap of animal it can’. Neste’s move into renewable biodiesel followed extensive research into the manufacturing of renewable fuels using the older esterifi cation technology, common in other parts of western Europe including Germany, France and Italy. This technology has predominantly used oilseed rape as a feedstock and has not always been consistent in results. ‘The quality of RME, or rape methyl ester, biodiesel is not all that great and this was one of the reasons why we decided to develop a more advanced technology,’ Neste quotes Ari Juva, its VP of product development, as saying. NExBTL is produced from a mix of palm oil, rapeseed oil and waste fat from the food industry, and Neste says it is wholly transparent about its sourcing of palm oil, a sensitive subject.
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Profit product, not by-product
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In his ethanol industry address on 24 February 2009 Renewable Fuels Association CEO Bob Dinneen summed up the state of the industry – 23 plants were idled and more may well follow. Prevailing low oil prices have deepened the gloom, making ethanol profi t margins narrower resulting in a drop in national output, most notably seen in the US. Ethanol producers, however, have a backup plan for...
survival in switching attention to the all important co-products. In the early years of the industry the target for plants worldwide was to make ethanol as quickly as possible, discarding the co-products, but the current struggling primary market has changed all this. However, DDGs present their own set of challenges for producers including nutritional quality and production costs, which vary greatly depending on the ethanol plant and technologies used. Improving the drying process Dried distillers grains are an easier product to market than wet grains. The latter is mostly produced in small, usually non-fuel alcohol plants with daily capacities of 30-60,000 litres a day. These plants either have an animal feed lot on their doorstep getting rid of product directly or they treat the whole stillage just as waste, often being the case in eastern Europe. Therefore the essential component for ensuring profi table DDGs is arguably the dryer. But at a time of fi nancial crisis, producers might seem hesitant to cough up the extra costs to dry the wet grains. Especially because depending on what the investment is, the drying process could be 25-30% of the total cost of a plant. Another fallback is that dryers are one of the main users for energy in a plant and a main source of emissions. As a result, companies such as GEA Barr- Rosin, Bühler Group, Anhydro and Swiss Combi are looking at ways to improve the quality as well as economics of the drying process. The types of dryers used include disc, ring fl ash, fl uid bed boilers and rotary drum dryers. The drying process encompasses a number of interrelated variables, including process air temperature, process air humidity, recirculation rate, evaporative rate, air velocity, air volume, product retention time, product temperature and product characteristics. The ring dryer is a pneumatic type dryer. As the product is pneumaticallyconveyed with a short residence time in the dryer, the process is gentle to the product and brings about the highest product quality. Rotary dryers are generally more rugged systems which mechanically and pneumatically convey the product which leads to longer residence time and consequently reduced product quality.
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Five key strategies for algae commercialisation
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A new study Algae 2020 (June 2009), has identified five key strategies: fatter, faster, cheaper, easier, and fractionation marketing approaches to help producers to reduce costs and accelerate the commercialisation of algae biodiesel, biocrude, and drop in fuels
Reboilers: performance analysis
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Biofuel critics often complain about the energy consumed during bioethanol production. Indeed, the distillation process accounts for a significant percentage of the energy consumed. Fortunately, installation of a reboiler in a bioethanol plant can reduce steam consumption with significant cost savings by comparison with direct steam heating. There are numerous varieties of distillation systems....
All begin separation of ethanol from the fermented mash in one column, then separate water from a different distillation column (or columns). Columns are heated by steam or process vapour. Some versions inject direct heated steam into the column which mixes with the product. This approach is simple and well established but costly in terms of energy consumption. The reboiler generates vapour to heat and partly evaporates the product without mixing with the heating media, as the two streams flow in independent closed loops. There are several types of reboiler including plate, shell-andtube, stab-ins, plate-fins, spiral-plate and kettle reboilers. Shell-and-tube reboilers are most common and are still used in most bioethanol plants. Direct steam injection is simple to operate, requires low investment and maintenance costs, but the high temperature can decrease by-product quality, lose steam condensate for the boiler system, and dilute the vinasses/waste water stillage, which increases the energy consumption substantially. Disposal of unconcentrated stillage is banned in many countries. The vinasses are concentrated using mechanical separation then evaporation. Direct steam injection dilutes the vinasses in the mash column. Using a surface reboiler avoids dilution, so valuable energy can be saved. The external reboiler can also recycle the steam condensate whereas with direct steam injection the lost steam condensate must be replaced at the boiler. The closed loop steam system also means there is less need to preheat the boiler feed water. Many factors influence reboiler selection, as no onesize fits all. These include: the plot space available, total duty/lifecycle, the fraction of tower liquid traffic to be vaporised, the process heat requirement, operability, fluid velocity, the source of fouling, periods between shutdown and other cost implications. There is also no single dominant approach to generating vapour for distillation columns. Configurations include: forced versus natural circulation; tube-side versus shell-side vaporisation; once-through versus process recirculation; single-shell versus multipleshell systems; vertical versus horizontal orientation; stab-in bundles; and other types.
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