During the CNEX – Talking Points forum held at the Philippine Information Agency, PCA public relations officer Thelma Tolentino said government is considering to increase the current minimum two percent blend of coco-diesel due to its many benefits.

Although Tolentino did not mention a definite date of implementation, the Department of Energy earlier issued a policy that aims to increase to five percent the current mixture, to around 10 percent by 2015.

She said the potential of coco-biodiesel goes beyond its financial rewards to the millions of coconut farmers in the country.

We must also take into consideration its benefits to the economy and the environment, she said.

A recent study showed that coconut farmers stand to earn more than P2 billion per year in the sale of coconut oil, a primary ingredient of the coco-biodiesel.

Likewise, coco-biodiesel enhances the combustion performance of diesel engines for better effeciency and less pollution produced.

It said that the inherent oxygen content of coco-biodiesel promotes better combustion in the engine which translates to an increase in mileage by as much as 10 percent.PIA.

The South American country is one of the biggest global exporters of biodiesel, made using soyoil. Argentina is also the world’s No.1 soyoil and soymeal supplier.

The new plant will have capacity to produce 300,000 tonnes of biodiesel per year, matching what Dreyfus produces at a similar facility near Rosario, a company official told Reuters on condition of anonymity. (Reporting by Nicolas Misculin; Writing by Hilary Burke; Editing by Marguerita Choy)REUTERS.

Argentina is expected to produce 2.3 million metric tons of biodiesel, made from soybeans, this year, up 27 percent from 2010, Oil World said in a report today. Exports may total 1.5 million tons, according to the report. In Brazil, biodiesel output may gain 14 percent, Oil World said.

“The available global supplies of vegetable oils and animal fats are insufficient to satisfy all the requirements of the energy sector without jeopardizing satisfaction of demand for food,” Oil World said. “This is going to be a supportive factor for oils and fats prices.”

Argentina’s soybean oil exports rose 100,000 tons to 1.2 million tons from January through April, partly because of rising requirements for biodiesel production, Oil World said. Indonesian production of the biofuel may rise to at least 800,000 tons by the end of 2011, most of which will be exported to the European Union, according to the report.

“Accelerating usage of vegetable oils for biodiesel could create scarcity and appreciating food oil prices later this year, unless policy-makers start fine-tuning their policies of biofuel-usage mandates,” Oil World said.

China will buy more vegetable oils after domestic stocks fell 800,000 tons in the past 12 months, Oil World said. Chinese imports may increase 20 percent to 3 million tons from July through September as palm oil and soy oil purchases rise, according to the report.

“There are several indications that world production will not rise sufficiently during the remainder of this year to satisfy global demand for food and for oleochemical usage as well as for the energy sector,” Oil World said.BLOOMBERG

“First there was a big debate between EBB’s Rafaello Garraffolo and CADER’s Alfredo Langesfeld.  It was short and sweet. Freddie asked EBB – you don’t have enough land for biodiesel, why not use ours from Argentina?  Rafaello ducked, dodged, deflected, and blamed splash n dash and overcapacity (same as Jobe on overcapacity). Amusing.

“The UNICA presentation was excellent, and they noted Brazil has a $28 Billion ethanol industry, with 465 mills and 70,000 sugar cane farms. UNICA said Sugar cane fields represent only 3% of Brazil’s arable land, and is grown 2,000 miles from the rainforest a misconception. In 2011, the country is expanding into biobutanol, biojet & renewable diesel fuels.

“GRFA’s Bliss Baker talked about his alliance with Rob Verhiout of Ebio (now Epure), RFA’s Dinneen, Canada Renewable Fuel Association, CADER, Australia, and working on getting Unica. I shared a panel with the President of Fedepalma, and the soy crowd didn’t know what to think of the palm and algae advocates, were a bit stunned but polite.”

SOURCE: BIOFUELS DIGEST

The global market is expected to record a CAGR of 7.8% from 2009 to 2014.

Increasing environmental concerns and the need for energy independence have led to the biodiesel market. Despite the economic recession, global biodiesel production totaled 5.1 billion gallons in 2009, representing a 17.9pc increase over 2008 levels.

The biodiesel market is expected to grow from $8.6 billion in 2009 to $12.6 billion in 2014. Market growth is primarily dependent on the availability, quality, and yield of feedstock, as it accounts for 65pc to 70pc of the cost of biodiesel production.

Biodiesel derived from rapeseed oil forms the largest segment of the overall market. Germany is the single largest producer of biodiesel with 2.8 million tonnes produced in 2008.

The biodiesel market also offers immense opportunities to countries such as the UK, India, and China, as these regions have high diesel fuel prices and a large number of diesel-fuelled vehicles.

While growth may be affected by feedstock availability issues and the food versus fuel debate, the market is expected to witness a paradigm shift with the increasing conversion efficiency of existing feedstock, and the development of newer feedstock sources such as algae, the report notes.

Transportation forms the main application market for biodiesel, with automotives accounting for 70% of the global biodiesel production.

As the use of conventional fuel for transport purposes is increasing greenhouse gas emissions at an alarming rate, governments across the globe have begun providing incentives for green energy.

Europe is currently the world’s largest biodiesel market; and is expected to be worth $7.0 billion by 2014 with a CAGR of 8.4% from 2009 to 2014. The growth of the European biodiesel market is driven mainly by governmental initiatives.

Source:  farmonline

As Indonesia is today the world’s largest producer of crude palm oil (CPO) — a desirable feedstock for biodiesel production — it has the potential to grow into a world biodiesel leader and a model for plantation sustainability.

Biodiesel has the potential to become a significant industry sector in Indonesia, supported by two of its most valuable assets: its oil palm plantations, and more importantly, its people. Indonesia currently produces approximately 20 million tons of CPO per year from 7 million hectares of oil palm plantation, of which approximately 80 percent  is exported. 

In terms of revenue, CPO exports provide Indonesia with its biggest non-petroleum source of export income, and this is expected to grow in the future. 

Beyond revenue generation, oil palm plantations also currently provide a livelihood for more than three million Indonesian families.  This, too, is also expected to grow in the future.

By 2015, the area of Indonesian oil palm is expected to increase to 10 million hectares, of which three million hectares have already been approved. 

Studies have shown that the total amount of land that is suitable for growing oil palms, but which has not yet been approved, may be as high as 44 million hectares. 

Using conservative yield estimates, this area of oil palm plantation would produce 145 billion litres per year of biodiesel, or 10 percent  of current fossil diesel demand.  Beyond this significant biodiesel potential is the possibility of providing income to an additional 19 million Indonesian families. 

While these 44 million hectares are considered suitable for oil palm plantations, it is imperative to consider the long-term environmental consequences — including the overall, or life-cycle carbon dioxide emissions — before pursuing any development.

Conscious of the potential environmental impact of oil palm plantation development, new crops which grow on marginal land are being investigated. This greatly reduces the required land-clearing and concomitant “carbon dioxide debt” from the forest destruction. 

One example of such a crop is Jatropha, which has been studied extensively by the Indonesian Center for Estate Crops Research and Development.  Recent estimates from the Indonesian National Team for Biofuel Development suggest that as much as 15 million hectares of land in Indonesia are suitable for Jatropha plantations. 

With conservative yield estimates, this land would produce 40 billion litres per year of biodiesel.

From a feedstock perspective, Indonesia certainly has the potential to become a world biodiesel hub, but there are two additional elements that need to be in place — sufficient biodiesel processing capacity and adequate demand, either domestically or internationally.

As with any other investment, biodiesel processing capacity will only develop if it results in a profitable business.  With the spot price of CPO close to US$700 /t, it is not currently economical to produce biodiesel, explaining the large proportion of idle capacity in Indonesia’s current biodiesel production capacity of nearly 3 billion litres per year.

Feedstock cost represents the majority of biodiesel production costs and is the only lever for affecting significantly the profitability of biodiesel production. Securing feedstock supply contracts is an option to lower feedstock cost but prices will still be subject to market volatility, and will also include some margin for the plantation.

Even with a profitable biodiesel business in place, sufficient demand must exist for any biodiesel that is produced. Current demand is driven largely by government biofuel blending mandates, which are currently set at 2.5 percent.  This demand will increase only if the government accelerates the biodiesel blending mandate, or if crude oil prices increase relative to CPO prices, which is unlikely given the recent high correlation between the two.

A third way to accelerate domestic short- to mid-term biodiesel demand while also increasing biodiesel export demand, however, does exist.  Recent advances in biodiesel processing technology have made it possible to use CPO to produce so-called “green diesel” which has superior fuel properties compared to both biodiesel and fossil diesel.  This technology uses a hydrogenation process, similar to that found in modern oil refineries, to upgrade vegetable oil to green diesel.

The superior fuel properties of green diesel means that it can be used as a blending agent to upgrade the quality of the fossil diesel pool at a traditional refinery, and this allows for the possibility of increasing the overall refinery margins in some cases.  Domestically, this means that green diesel can be used in large quantities in place of fossil diesel, thus reducing Indonesia’s dependence on fossil diesel imports.  The implementation of increasingly stringent Euro IV and Euro V fuel specifications in Europe also increases the possibility for the export of green diesel as a blending agent.

While Indonesia has great potential to become a major world player in biodiesel, it is unlikely to be fulfilled unless sustainable plantation practices are followed.  The location where palm plantations are established and the manner in which new palm plantation land is cleared, have a large effect on life-cycle carbon dioxide emissions.

Indonesia is in a strong position to further develop its already significant CPO production into a much larger and more profitable biodiesel industry.

The combination of a rich natural resource base, a dedicated and knowledgeable people and recent advances in biodiesel technology, combine to form a strong base on which to develop Indonesia as a major world player in biodiesel. 

Dr. Bernd Waltermann is a BCG senior partner and managing director and Dr. Henning Streubel is a BCG partner and managing director. Both are based in Southeast Asia.

Source: The Jakarta Post

Growing imports of cheap Argentine biodiesel into Europe are replacing U.S. imports hit by European Union anti-dumping duties in March, Swiss-German biodiesel producer Biopetrol said on Thursday.

“Increasing amounts of indirectly-subsidized biodiesel have been coming to Europe from Argentina since the second quarter,” Biopetrol said in a statement in a statement on its first half 2009 results.

“The EU and the German government are once again called upon to act quickly to give European biodiesel producers the same protection against subsidized imports as in the case of B99 (biodiesel) from the U.S.”

In March, the EU said it would impose punitive duties on imports of biodiesel from the U.S. while an investigation is held into allegations the U.S. green fuel is sold cheaply in Europe with the help of subsidies.

“Biodiesel prices continued to be under heavy pressure, because large inventories of highly subsidized American B99 that had been established in Europe were still being sold on the market,” Biopetrol said.

The company, which in April underwent major financial restructuring, on Thursday posted a dramatic fall in first half 2009 turnover of about 50 percent to 69.7 million euros from 139.8 million euros in the first half of 2008.

Losses before interest and tax (Ebit) rose to 13.7 million euros from a loss of 3.1 million euros in the same time in 2008.

Increased taxes on biodiesel imposed by the German government had brought a “collapse” in petrol station sales of the green fuel in the first half, Biopetrol said.

This could not even be remotely compensated for by Germany increasing maximum-permitted blending of biodiesel in conventional diesel from five percent biofuel content to seven percent, it said.

Germany’s biofuels industry association said on Monday the country’s biodiesel industry is only working at 20 percent of capacity largely because of high taxes.

But Biopetrol said it was “well positioned for the future” after its financial restructuring in April.

(Reporting by Michael Hogan; Editing by Peter Blackburn)

Source: Reuters