So what is the value proposition of doing this? Profits, as Mark Fashian, president of Ethanol Analytical Solutions (EAS) and Biodiesel Analytical Solutions (BAS) explained to me during a Skype interview following the Fuel Ethanol Workshop recently held in Indianapolis, Indiana. For example, Fashian said a 100 million gallon per year ethanol plant will sell 100 million RINS. By adding a 3 million gallon biodiesel plant you’ll make your plant more valuable because each of these gallons is worth 1.5 RINS, or an additional 4.5 million in total.

With demand for biodiesel increasing and the need for more gallons (the biodiesel industry is still ramping up after the one year loss of the $1 per gallon tax credit in 2009), Fashian said this is the perfect storm for the ethanol industry.

You can listen to my full interview with Mark Fashian here: Diversifying the Ethanol Industry with Biodiesel0:00 / 0:00DownloadRight-click and save as to download.

He also noted that one drawback to using corn oil for biodiesel is that it has a high acidic content, around 27.5 percent, and because of this it is hard to convert. Most plants use a two-step process to achieve this.

“It’s a lot of redo a batch, do a batch again because we didn’t get it just right, and that’s not what the ethanol industry is looking for,” said Fashian. “They’re looking for the silver bullet where you can take that corn oil right from the extractor and put it right in to another process to make biodiesel without having to mess with a second or third run to get the biodiesel to make ASTM grade. And that’s exactly what the McGyan process does. It’s patented for the corn oil process and with their everlasting catalyst you just pump the sample in with either ethanol or methanol and out the other end comes beautiful biodiesel.”

If a plant doesn’t have extraction technology, when all expenses are factored in, the return on investment (ROI) is less than one year, and this includes the lab. I should note that Fashian is also a director of Mcgyan and both EAS/BAS represent the technology. So their team would not only work with the ethanol plant on the biodiesel installation, but also help them update the lab for all the extra tests required for biodiesel and the proper equipment to achieve specs. For those plants who already have extraction technology, the ROI is less than 2 years.

It takes between 12-18 months to get the Mcgyan technology up and running and its already designed to be a perfect fit for an ethanol plant. Oh, and if you decide to sell your corn oil on the market rather than produce biodiesel, you can still produce biodiesel with other feedstocks.DOMESTIC FUEL.

“Thailand is committed to the low-carbon pathway,” said Twarath Sutabutr, deputy director of the Department of Alternative Energy Development and Efficiency within Thailand’s Ministry of Energy. Sutabutr is leading the list of speakers for this week’s event.

The Clean Power Asia conference focuses on several elements of Thailand’s energy future, including renewable energy sources and cleaner fossil fuel-based power. The event aims to give Thailand the opportunity to showcase its green track record while highlighting the investment opportunities offered by its renewable energy industry. According to information released by the event’s organizers, approximately 300 delegates present at the conference will hear from energy experts representing more than 14 countries, including Thailand, Singapore, Korea, China, the Philippines, India, Australia, Indonesia, Cambodia, Vietnam, Laos, Malaysia, Pakistan and Iran.

Regarding the potential for biodiesel investment, Clean Power Asia’s team notes that the government of Thailand has established a goal to produce and use 4.25 million liters (1.12 million gallons) of biodiesel per day. This equates to a usage goal of approximately B7 in 2011. 

One of the goals of Thailand’s Energy Policy and Development Plan is to promote the use of biodiesel and other alternative transportation fuels. To help achieve that goal, the country has aimed to educate members of the public about alternative transportation fuels in order to build consumer confidence. The government has also been promoting the use of palm oil production within Thailand, with the goal of having 400,000 hectares (nearly 990,000 acres) of the feedstock in cultivation by 2012.

While the Clean Power Asia event focuses on investment opportunities, a training program in India will focus on the development of jatropha and other non-food  feedstocks for biodiesel production, including algae, castor, pongamia, moringa, simarouba, and jojoba. The 5-day event will address both feedstock development issues and oil extraction and process technology developments.

Nearly 10 sessions at the training event will focus exclusively on jatropha. According to CJP, these sessions will address genetics, agronomics and horticulture practices. “[The speakers] shall also discuss the need for universally-accepted industry standards for the development of this crop as well as the efforts to develop such activities in developing jatropha varieties with improved oil yield per hectare to achieve [a] three-fold goal of addressing energy, economics and execution with clear focus on critical issues facing [jatropha’s] role as a viable feedstock,” said the CJP in a statement.BIODIESEL MAGAZINE.

The U.S. Environmental Protection Agency announced it now will allow up to 15% ethanol to be blended with gasoline in motor fuel — but only for use in cars and trucks built since 2007.

Engine valve damaged by carbon buildup from fuel with 20% ethanol. The blend created resin in a fiberglass boat fuel tank and the resulting gunk coated the valve.

The current allowable limit is 10%, and remains so for older vehicles, all motorcycles, heavy-duty vehicles and non-road engines (everything from leaf blowers to motorboats).

That sets up potential confusion at the gas pump. Buyers could have to choose not only among octane ratings but also between E-10 and E-15. And while E-10 now is fairly common, stations are not required to offer it or the new E-15 — and some already say they are going to sit out E-15 for now.

The move does not affect special E-85 fuel — an 85% ethanol/gas blend not considered gasoline at all — already allowed by the EPA. E-85, sold mostly in the Midwest, only can be used in vehicles designed as “flex fuel” machines, to take the higher concentration of more-corrosive ethanol without damage.

EPA says thorough testing has shown E-15 won’t cause problems in the newer vehicles.

Even though the E-15 blend is intended for cars and trucks — indeed, it’s technically illegal to use it in other engines — the small-engine lobby figures it’ll nevertheless wind up in the hundreds of millions of chainsaws, leaf blowers, law mowing equipment, boats, all-terrain vehicles and the like.

It’s unlikely that a station would sell both E-10 and E-15, and even more unlikely that a motorist would fill up the car at at E-15 station (where the higher blend of ethanol will make the fuel a little cheaper), then search out an E-10 or straight-gasoline station to fill the lawn mower gas can, says Kris Kiser, executive vice president of the Outdoor Power Equipment Institute.

E-15 “will get into products it shouldn’t, and there’ll be lawsuits,” he predicts.

“The new ethanol blends, known as E-15, come with serious risks for our engines, wildlife, water, and the air we all breathe,” warns Nathanael Greene at the Natural Resources Defense Council, an environmental activist group.

“A broad coalition of environmentalists, public health advocates, livestock ranchers, and automakers have long opposed EPA’s move,” he says. “Burning ethanol can cause toxic air pollutants to be emitted from vehicle tailpipes, especially at higher blend levels like E-15. The chemistry is fairly straightforward: ethanol burns hotter than gasoline, causing catalytic converters to break down faster.”

The government hinted that the E-15 rule will be broadened. EPA Administrator Lisa Jackson said Wednesday’s action was “the first of a number of actions that are needed from federal, state and industry toward commercialization of E-15 gasoline blends.” She noted that “a decision on the use of E-15 in model year 2001 to 2006 vehicles will be made after EPA receives the results of additional DOE testing, which is expected to be completed in November.”

Kiser, of the Outdoor Equipment group, says it won’t stop there: “We’ll have the same conversation six months from now about E-20. E-15 doesn’t get you anywhere near the flex-fuel mandate set by Congress; E-15 only buys you a little time.”

EPA is under a rural-state-promoted congressional mandate to increase ethanol use. Congress required fuel refiners to blend 36 billion gallons of biofuels, mostly ethanol, into auto fuel by 2022 and the EPA says it can’t be done without allowing at least an E-15 blend.

Most ethanol is made from corn in this country, and farm states have strongly pushed for the government to promote more use of it. 

Beyond possible damage to engines, opponents say E-15 is a bad idea because: 

– Growing more corn and using it for ethanol instead of animal feed will make feed (and thus meat) costly and inflate supermarket prices for the wide range of foods containing corn products.

– It can be seen as bad use of land and a promotion of wasteful, energy-intensive agriculture.

Roland Hwang of the NRDC says: “We strongly support ethanol, as long as it comes from sustainable feedstock and it’s used in a manner that doesn’t undermine air quality. Unfortunately, corn ethanol used as E-15 fails on both counts.

“Corn ethanol is clearly not sustainable and the E-15 (rule) will increase air pollution due to misfueling.”

Ethanol industry group Growth Energy petitioned the EPA earlier this year to allow E-15. The decision has been delayed twice as the EPA and Energy Department did more testing.

The Obama administration’s decision to allow E-15 is a win for the ethanol industry as it faces losing its generous government subsidies. A key tax credit is to expire Dec. 31 and there’s been opposition in Congress to renewing it.

– Fred Meier/Drive On

SOURCE: USA TODAY

The agreement includes the construction of a plant within 14 months in the province Azua (south) to use oil from native varieties of brush such as jatrofa and higuereta, which haven’t any use so far since the oil they produce is toxic.

The agreement includes the Surfuturo Foundation, which will promote the establishment of plantations in the country’s poorest region, with the guarantee for farmers who raise the crops to be bought by the future plant.

Globasol executive Jose Vicente Galindo said the plant’s maximum production of 100,000 tons per year would require plantations totaling 60,000 hectares.

Attending the signing ceremony were Spain ambassador Diego Bermejo and Asturias region president Vicente Alvarez Areces, who concludes his first official visit to the country today.

 SOURCE: DOMINICAN TODAY

Braskem expects to become the first commercial-scale producer of polyethylene made from a renewable source when a plant in Brazil begins producing the building block resin used in plastics at the Triunfo plant, said Leonora Novaes, Braskem’s commercial head for green polyethylene.

A second plant is likely to follow, if manufacturers show sufficient interest in the plastic, which will have the same characteristics as petroleum-based polyethylene but help reduce greenhouse gasses and meet consumer demand for more environmentally friendly products.

A new plant would take about three years to build.

The firm is studying possible locations for a second plant, including real estate in the center-south’s sugar cane heartland to have ready access to ethanol, the plastic’s raw material.

Ethanol will have to be transported over a long distance to reach the Triunfo plant in Rio Grande do Sul, Brazil’s southernmost state.

“Cane (ethanol) brings many advantages. Cane is very efficient at capturing CO2 in the growth process,” Novaes said in a presentation on the product at the opening of the three-day FO Licht Sugar and Ethanol Conference in Sao Paulo.

The firm has committed to selling 50,000 tonnes of the green plastic to Toyota (8015.T), a quarter of the 200,000 tonnes the Triunfo plant will produce initially.

Novaes said European firms had shown keen interest in the product and Braskem expected to export to the United States.

Demand appeared limited on the domestic market so far.

“It’s still a niche,” said Novaes, who said the 200,000 tonnes was less than 1 percent of total global polyethylene consumption. (Reporting by Peter Murphy; Writing by Reese Ewing; Editing by Walter Bagley)

Source: Reuters

SAO PAULO (Reuters) – Royal Dutch Shell plans to form an ethanol and fuel distribution joint venture worth up to $12 billion with Brazilian sugar and biofuel giant Cosan, becoming the latest global energy company to buy into one of Brazil’s fastest-growing industries.

The deal, announced on Monday, marks Shell’s first foray into ethanol production and follows moves by British oil company BP, which in 2008 took a stake in a big Brazilian biofuel project and unveiled $1 billion in investments.

Cosan shares jumped 12 percent in Sao Paulo, compared with a 1.1 percent gain by the benchmark Bovespa index. Shell shares rose 1.1 percent in London, outperforming a 0.3 percent rise in the Dow Jones European oil and gas index.

“It’s a vote of confidence from an oil major for the Brazilian ethanol industry,” said Jonathan Kingsman, managing director of the Lausanne-based Kingsman SA ethanol and sugar consultancy. “I expect more interest from the oil companies in Brazilian ethanol, both in production and distribution.”

The 50-50 joint venture will be the third-largest fuel distributor in Latin America’s largest country, with almost 4,500 filling stations nationwide. By joining forces, Cosan and Shell will be better positioned to compete with the two top players in the market, state oil giant Petrobras and Ipiranga, a unit of Brazil’s Grupo Ultra.

Cosan first branched out into the fuel distribution business in 2008 when it acquired U.S.-based Exxon Mobil Corp’s Esso chain of service stations for nearly $1 billion. Cosan also agreed in December to buy a local chain of filling stations called Petrosul for an undisclosed sum.

While the deal will not immediately add to Cosan’s existing cane crushing capacity of about 60 million tonnes a year, it will give it a deep-pocketed partner at a time when some of its smaller rivals are vulnerable to takeovers.

The companies hope to more than double ethanol output to up to 5 billion liters a year from about 2 billion now, Shell’s downstream director, Mark Williams, said in London, without giving a time frame. The increase would come from takeovers and organic growth, he added.

The deal is another feather in the cap of Cosan Chairman Rubens Ometto, whose family has been in the sugar business since 1936. On Ometto’s watch, Cosan went on an acquisition spree and expanded into fuel distribution and port terminals.

Ometto hopes to capitalize on Shell’s global clout to make ethanol a widely traded commodity.

“Brazil’s aim is to become an ethanol exporter. Shell has distribution facilities throughout the world that we could use in a much more integrated way,” Ometto said in Sao Paulo.

“This step will be very important to consolidate ethanol as a clean and renewable fuel … and help it become a global commodity.”

Oil companies and major global investors have been searching for partnerships in Brazil’s promising ethanol sector, which is still largely dominated by family companies with complex ownership structures.

Shell has been looking for opportunities in Brazil’s ethanol industry for years. About 90 percent of all new cars in Brazil are flex-fuel, running on any mix of ethanol and gasoline, making the country a huge market for biofuels.

Other foreign companies have also been delving into Brazil. U.S. agribusiness giant Bunge Ltd struck a deal in December to buy sugar and ethanol producer Moema for $452 million, while French commodities company Louis Dreyfus said in October it would take over the Santelisa Vale mill for an undisclosed sum.

COSAN EYES OVERSEAS MARKETS, TECHNOLOGY

The combined entity will have about 40 billion reais ($21.4 billion) in annual sales, Cosan Chief Financial Officer Marcelo Martins said on a conference call with analysts and investors.

For Cosan, the world’s largest sugar and ethanol producer, teaming up with Shell could give it access to a vast overseas distribution network and new technologies in ethanol production, an area where Shell has been investing. Shell’s network may help Cosan export more ethanol as output grows.

“We’ll have a partner with an absolutely huge international presence in fuels sales,” Martins said.

The so-called second-generation in ethanol production has yet to reach commercial scale, but some companies are betting on the use of cellulosic material such as bagasse or cane stalks and grasses to make biofuels, in part to move away from making fuel from foodstuffs.

Cosan, which recently obtained a court injunction to remove its name from a government black list of companies with workers in slave-like conditions, said it had 180 days to discuss the nonbinding memorandum of understanding exclusively with Shell International Petroleum Co Ltd.

As part of the transaction, Cosan will transfer its sugar, ethanol, fuel distribution and energy generation business to the merged entity, with assets valued at $4.93 billion and debt of $2.52 billion.

Shell will contribute its retail fuel and aviation distribution business, valued at up to $3 billion, and inject $1.63 billion into the merged company in up to two years.

Brazilian investment bank BTG Pactual advised Cosan on the transaction, while JPMorgan Chase advised Shell.

Cosan and Shell will have the option of buying each other’s stake in the venture after 10 years, with the price to be determined at the time of purchase.

Earlier on Monday, Cosan released its quarterly earnings for the three months ended December 31. It posted net income of 167.1 million reais, up sharply from 5.2 million reais a year earlier. ($1=1.87 reais)

Reporting by Elzio Barreto and Inae Riveras; additional reporting by Reese Ewing in Sao Paulo and David Brough, Nigel Hunt and Tom Bergin in London; editing by Todd Benson, Dave Zimmerman and John Wallace.

Source:  Reuters

State-run oil giant Petrobras (PETR4.SA)(PBR.N) and General Electric Co (GE.N), which helped design the plant, are betting that increased use of ethanol generation by green-conscious countries will boost demand for the product.

Brazil, the top global ethanol exporter, is already in talks with Japan to develop biofuels power generation there.

“We have great expectations to show the viability and economy of generating electricity from … an alternative feedstock to fossil fuels,” Maria das Gracas Foster, head of Petrobras’ natural gas division, said.

Petrobras with the help of GE upgraded the 87-megawatt power plant to switch between running on natural gas or ethanol instantaneously. Brazil primarily relies on hydroelectric power but needs backup thermoelectric generation during the dry season.

John Ingham, Latin America Products Director for GE, said tests showed switching the plant to ethanol reduced carbon dioxide emissions without lowering energy output.

GE has around 770 turbines like those used in the Juiz de Fora plant, including many in Japan, that could be converted to run on ethanol, he said.

“A plant like that consumes a lot of ethanol, so it has to be in a place that makes sense (such as) places that have no access to gas, like Japan, some islands, or places that depend heavily on diesel like the Amazon region,” he said.

Brazil is expected to produce a record 27.8 billion liters of ethanol in the 2009/2010 season. It began its biofuels program 30 years ago and now mandates a minimum 20 percent of ethanol in gasoline.

Petrobras itself is only starting to enter the ethanol market. Brazil’s ethanol production comes from sugar cane milled by companies such as Cosan (CZZ.N) or commodities giants including Cargill Inc [CARG.UL], Bunge (BG.N) and ADM Co (ADM.N).

Domestic demand for ethanol is being driven by the popularity of the flex-fuel car technology that was launched in 2003 and now makes up around 90 percent of new vehicle sales. (Writing by Brian Ellsworth; Editing by Marguerita Choy).

By Denise Luna

Source: Reuters

Moema Par is a holding company that owns one sugarcane mill and has ownership in five others. Together the six mills, known as the Moema Group, have the capacity to crush 15.4 metric tons. This agreement, which is structured as a share exchange worth approximately $896 million, gives Bunge 60 percent effective share of the total capacity.

“This transaction fulfills Bunge’s strategic goal of building a large-scale, fully integrated business in sugar and bioenergy,” stated Alberto Weisser, Chairman and CEO of Bunge Limited. “It adds significant scale to our current milling operations and enables us to vary production among multiple sugar and ethanol products, according to market conditions. The Moema Group cluster is also strategically located near large domestic markets in Brazil and has excellent access to export logistics systems. All of these strengths make it a perfect fit with our global trading and marketing operations.”

The Moema Group cluster is located on the border of São Paulo and Minas Gerais states, the two largest domestic ethanol markets in Brazil. According to Bunge, the mills benefit from cost savings due to their cluster configuration, and have favorable road and rail access to three of Brazil’s largest export ports (Santos, Paranagua and Vitoria). The mills can produce both raw and crystal sugar, as well as hydrous and anhydrous ethanol. In addition, the mills have co-generation facilities, are self-sustaining in terms of energy requirements and sell excess power to the grid. The majority of the cluster’s sugarcane is harvested mechanically, which is now law in São Paulo.

According to Bunge, they may enter into agreements to secure some of all of the remaining interests in the mills that comprise the Moema Group in the next few weeks.

Source: Domestic Fuel

Update incorporates feedback from five regional consultations and addresses concerns regarding food security, indigenous peoples and biodiversity preservation.

The Inter-American Development Bank has released a new version of its Biofuels Sustainability Scorecard, which will enable users to better anticipate the impacts of potential biofuel projects on sensitive issues such as indigenous rights, carbon emissions from land use change, and food security. 

The first version of the Scorecard, an interactive, web-based tool that was released a year ago, addressed 23 key variables including greenhouse gas emissions, water management, biodiversity and poverty reduction. The IDB subsequently held five regional meetings to solicit feedback on the Scorecard and began collecting and reviewing hundreds of comments and suggestions submitted by outside experts.

As a result, the updated version of the Scorecard includes new categories to more thoroughly capture the environmental and social dimensions of biofuels investments. Specifically, there are six new social categories that address issues relating to indigenous people, local grower arrangements and impacts on food security, among others.

“This new version of the Biofuels Sustainability Scorecard reflects the wisdom and experience of a wide spectrum of experts in academia, NGOs, multilateral institutions and the investment community,” said IDB President Luis Alberto Moreno. “Biofuels continue to be a compelling energy alternative for many Latin American and Caribbean countries, but it is essential to understand the full lifecycle impacts of a project first. This Scorecard now offers an even more effective way to ensure that proposed biofuel projects are truly sustainable.”

The new version of the Scorecard includes a spatial analysis tool that enables users to quickly access existing Geographic Information System (GIS) data regarding areas for biodiversity preservation. Future versions will add data layers to show the spatial dimensions of categories including water scarcity, cultural sites and high carbon sequestration areas, among others.

User feedback. The new Scorecard also benefitted from the criticisms and suggestions of investors who used the original version. These included the financial backers of Biobahia Oil, a large biofuel complex planned for Northeastern Brazil.

Euroventures, the company behind the project, was finding it difficult to determine the full social and environmental impacts of this ambitious project, which aims to cultivate some 30,000 hectares of land and produce 200,000 tons of biodiesel per year. So Adrian Calvert, in charge of investors’ relations at the company, sought technical assistance for a feasibility study from the IDB’s Sustainable Energy and Climate Change Initiative.

In agreeing to help, IDB experts urged the Biobahia team to run their project through the Scorecard.

“In an increasingly competitive biofuels industry, sustainability has become the key issue in ensuring access to global markets,” said Guillaume Sagez, managing partner of Euroventures. “The IDB Biofuels Sustainability Scorecard has helped us to think through our project plans and find out how we can adopt certain practices to achieve a higher degree of environmental and social sustainability.”

Among other things, Sagez said the Scorecard showed his project team that they would need to look more closely at the carbon emissions that would result from proposed land use changes in the project, along with nitrogen oxide emissions that can be expected from cultivation and fertilizer application.

After using the Scorecard, the Biobahia team suggested improvements to the tool that have now made their way into a new version. Going forward, the IDB plans to continue soliciting input on ways to strengthen the Scorecard. The Bank is part of the Global Bioenergy Partnership and the Roundtable on Sustainable Biofuels, both global efforts to develop sustainability criteria for biofuels, and IDB specialists will coordinate with the Food and Agriculture Organization to improve the Scorecard over the next year.

Source: Iadb

As they informed from the brazilian government the reedbeds sowed to obtain ethanol, would not be dangerous. Agency APÂ

The expansion of the reedbeds in Brazil to satisfy the growing demand of ethanol in the world won’t damage the Amazonas rainforest, said on Monday a high employee of the government. Â

In declarations at the beginning of a five days international conference on biofuels, the government’s general secretary, Dilma Rousseff, said that the country will announce a plan of agricultural areas very soon to specify where the cane can be cultivated, both for sugar or energy generating. Â

The Amazonia and other well-known regions for their wide range of animal species and of plants would be excluded. But Brazil will encourage the expansion of the ethanol production to other parts and in poor countries of the world in wich the climate is favorable for the cultivation.Â

“It is a socioeconomic reality”, Rousseff said. “It generates works and revenues, mostly in tropical countries.”Â

Rousseff also said that the expansion of the ethanol won’t compete with the production of foods in Brazil, and that space exists for other crops, including soya and corn.Â
Although the reedbeds cover 4,2 million hectares of Brazilian lands now, the minister said that that represents less than 1% of the national territory and that abundant available land exists outside of the protected areas.Â

Rousseff said that Brazil should “put an end to the myth that the cane fields are invading the Amazonia”, but the critics say that there are already cane plantations in the region and that some plan to expand. They also denounce that the conversion of grass lands and soya fields to reedbeds are displacing soya farmers and cattlemen that in turn settle down in deforested areas of the forest.Â

Rousseff said that the government of Brazil is prepared to help to the big ethanol producers that suffer because of the global credit crisis.Â

The ethanol producers were among those that could receive help when the government announced thousands of millions of dollars recently in lines of emergency credit for the companies affected by the crisis.Â

Source: La Voz