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The US biodiesel industry is staging a recovery, with markets, driven by mandate, opening up for the short and longer term. After a slow start this year, biodiesel production ramped up sharply in the second quarter and market observers expect there to be enough output captured in generated compliance credits to satisfy this year’s federal demand obligation. After six months, the... USEnvironmental ProtectionAgency’s (EPA’s) moderatedtracking system, or EMTS,shows nearly 73% of 2011’smandated compliance creditsfor biomass-based diesel havebeen generated. That is onvolume of 391.9 million gallons,or 49%, of the 800 milliongallon mandate under the USRenewable Fuel Standard(RFS2). Meanwhile, output atmany large plants is sold outthrough the fourth quarter. This is in stark contrast to where the industry was a year ago, when production only reached 315 million gallons for all of 2010. A tax credit lapse was primarily responsible for the near halt in US biodiesel production in 2010, which slumped to 15% of installed capacity at one point. Another lifeline – a federal demand mandate for biodiesel – was challenged by the oil industry, nullifying compliance obligations until a court decision upholding the mandate was eventually reached in December 2010. The federal mandate under RFS2, established by the Energy Independence and Security Act (EISA) passed in December 2007, requires 36 billion gallons of renewable fuel to be used in US markets by 2022, with mandate levels graduating higher each year until the goal is attained. Most of the mandate will be satisfied by ethanol, but biodiesel has a demand carve-out that can be adjusted higher. [read more]

Since December 2010, economic operators in Europe have needed to comply with the requirements of the Renewable Energy Directive (RED). For biofuels, the sustainability criteria is doubtlessly at the heart of this legislation. In theory, there are three ways of showing compliance with the criteria: through national schemes, voluntary schemes or bilateral agreements. Spoilt for choice? Not quite... because at a second glance it becomesclear the choice so far has been rather limited – or even non-existent. National schemes are still under development in most of the member states, bilateral agreements do not apply to domestic production anyhow and the approval of voluntary schemes by the European Commission (EC) was heavily delayed. [read more]

Canadian oil companies have a dilemma. They need to find around 650 million litres of biodiesel to meet the federal government’s Canadian Renewable Fuels regulations that require a minimum average volume of 2% renewable content in diesel fuel and heating oil, and 5% in regular petrol by 31 December 2012. There is currently less than 180 million litres of domestic production with most of the... supply being imported from the US and Europe. In 2008, the Canadian government set up the C$1.5 billion (€1 billion) ecoENERGY seed money programme to change these import figures and has 31 signed agreements with an additional nine being processed with new or existing producers. But some projects have been put on hold because they did not get the necessary funding to proceed and there appears to be a bit of a backlash against the programme. Biostreet Canada, for example, was planning to build a 237 million litre per year (mly) plant in Vegreville, Alberta, using oilseed as feedstock. The project, costing C$221 million and anticipated to be the second-largest in North America, was to include the construction and operation of a large-scale oilseed crusher using technology provided by DeSmet Ballestra and refining technology from BDI Biodiesel which process yields up to 99% biodiesel, even when using low-grade, high FFA seed. The plant was expected to be completed next year, but a shovel has yet to be put in the ground. The company is also working on a new technology called The Meal to BioOil project which involves the testing of camelina and canola meal for potential use in fast pyrolysis technologies to create a secondary high value energy product and biochar. [read more]

Airlines around the world have begun signing deals to delve into renewable jet fuels, wanting to reduce their carbon footprint and potentially cut fuel costs in the long term. In 2009, Air Canada announced it was entering into a Memorandum of Understanding with 14 other major airlines from the US, Mexico, Canada and Germany, to purchase 750 million gallons of renewable jet fuel and diesel derived... from camelina by producer AltAir Fuels. In May this year, albeit on the other side of the world, a similar scheme was launched between Australia and New Zealand’s main aviation players after they consulted with the Commonwealth Scientific and Industrial Research Organisation (CSIRO). Airlines Air New Zealand, Qantas and Virgin Australia partnered with oil major Caltex and aeroplane manufacturers Boeing and Airbus, as well as other main players from the biofuels and aeronautical industries, to create this sustainable aviation roadmap. The plan suggests there is a strong market for the bioderived jet fuel industry which could generate more than 12,000 jobs in the region alone. [read more]