The U.S. agribusinesses have joined Brazilian companies that are expanding facilities in a bet the government will double to 10 percent the amount of biofuel that must be blended into petroleum-based diesel, driving up demand overnight.

With oil above $100 a barrel, President Dilma Rousseff is looking for alternative fuels to fill trucks’ tanks and keep a lid on inflation. Expanding production would also boost the economy of Brazil’s impoverished center-west region, where most of the industry is based. The risk is the country will be awash in unneeded biofuel, said Roberto Rodriguez Labastida, an analyst at Bloomberg New Energy Finance.

“There’s far more biodiesel refineries online than are necessary,” Rodriguez Labastida said from the research group’s office in London. “I wouldn’t say it’s smart to invest” in any more facilities to process soybeans into fuel.

Brazil demands that diesel sold at the pump contain 5 percent biofuel. It’s the third-largest market by capacity after the U.S. and Germany. Executives at four refiners said they expect the government to double that to 10 percent within three years, giving Brazil the world’s highest biodiesel blending rate.

Edison Lobao, Brazil’s Minister of Mines and Energy, is considering a higher blend rate as long as there’s enough vegetable-oil that can be processed into fuel, according to a statement posted on the ministry’s website May 4. He did not say how much it may be increased.

A Cargill spokesman declined to discuss the company’s biodiesel plans. ADM and Bunge Ltd. (BG), another U.S. agribusiness approved to build in Brazil, did not respond to inquiries.

Europe, U.S. Overcapacity

Overcapacity is also an issue in Europe, where plants are operating at about 40 percent of potential, and in the U.S., which according to some measurements is running at about 24 percent, according to Claus Keller, senior analyst of Ratzeburg, Germany-based biofuel consulting company F.O. Licht.

Doubling the concentration would rocket demand for the fuel and would cut imports of petroleum-based diesel, easing Brazil’s balance of trade.

“Brazil is bound to increase the biodiesel blend to 7 percent in the next 5 months,” said Paulo Jose Fuga, a manager at Fuga Couros SA. The Marau, Brazil-based leather maker and meat processor is spending 22 million reais ($13.6 million) on a biodiesel plant that will process as much as 108 million liters (29 million gallons) a year beginning in February. He forecast the requirement reaching 10 percent by 2014.

21 Projects

The Fuga project is one of 21 in Brazil, either new plants or expansions of existing ones, that received permits in the last year to begin construction from fuel regulator Agencia Nacional do Petroleo, Gas Natural e Biocombustiveis.

Developers include Decatur, Illinois-based Archer-Daniels- Midland’s local unit, ADM do Brazil Ltda.; Minneapolis-based Cargill; and Bunge, based in White Plains, New York. Together they are set to add slightly more than 2.2 billion liters of annual capacity, increasing the production base by about 38 percent, according to the regulator.

New biodiesel units in Brazil cost about $0.25 a liter to build, according to data compiled by London-based New Energy Finance. Rodriguez Labastida estimates that refiners are investing more than $560 million to boost their capacity, based on construction permits they have received.

Refiners, which make the fuel by treating vegetable oils or animal fats with alcohol in a chemical reaction, say they need more capacity to keep pace with rising demand for the standard diesel with which it’s mixed.

Rising Consumption

Even without the blending increase, national consumption of the fuel is expected to rise by 6 percent a year over the next decade, according to a Ministry of Mines and Energy projection.

The producers are overly optimistic about their sales outlook because national output capacity is growing faster than demand, according to F.O. Licht’s Keller.

There’s “already strong competition for volumes,” in the government’s quarterly auctions for the fuel, he said. “That’s only going to increase as more plants start operations.”

Only biodiesel projects with access to cheap raw materials, like soybean and animal fats, or “at minimum, ownership over a seed crushing plant,” make economic sense, Keller said. “I’d only build a project if I had access to the feedstock for the next 10 years.”

More Refineries

There are about 60 biodiesel refineries selling fuel in Brazil with production capacity of 5.9 billion liters a year, according to fuel regulator ANP. That’s up from 47 at the start of 2010.

The average price of biodiesel in a government-organized auction in February was 2.05 reais a liter, down 11 percent from the previous auction in November, according to ANP. Soybean oil was selling for 2.14 reais a liter on April 28 in Sao Paulo, according to information compiled by Bloomberg.

Brazil imported 9 billion liters of diesel last year, according to the Secretary of External Commerce. Increasing the percentage of biodiesel in the fuel sold at retail would decrease the amount of standard diesel in drivers’ tanks and would have saved the country about $2.2 billion in the first half of 2010 on imports, according to Brazil’s biodiesel trade group Uniao Brasileira do Biodiesel.

Vegetable Oil Supplies

Keller questioned the impact of a higher blend rate on Brazil’s farmers. A 10 percent requirement may require an additional 2.4 billion liters of vegetable oil to produce, double the current level, he said.

That new blend obligation may consume as much as 69 percent of the 7.4 billion liters of soyoil that the Brazilian vegetable oil trade group Associacao Brasileira das Industrias de Oleos Vegetais predicts will be produced in the 2011 to 2012 harvest season. About 84 percent of Brazilian biodiesel was derived from soy in February, according to ANP.

That would drive up prices for soy, raising production costs for refineries, Keller said. “Some producers may not be able to deliver” their product “under those conditions.”BLOOMBERG.

Soybean, one of the most important global sources of protein and oil, is now the first legume species with a published complete draft genome sequence. The sequence and its analysis appear in the January 14 edition of the journal Nature.

The research team comprised 18 institutions, including the U.S. Department of Energy Joint Genome Institute (DOE JGI), the U.S. Department of Agriculture-Agricultural Research Service (USDA-ARS), Purdue University and the University of North Carolina at Charlotte. The DOE, National Science Foundation, USDA and United Soybean Board supported the research.

“The soybean genome’s billion-plus nucleotides afford us a better understanding of the plant’s capacity to turn sunlight, carbon dioxide, nitrogen and water, into concentrated energy, protein, and nutrients for human and animal use,” said Anna Palmisano, DOE Associate Director of Science for Biological and Environmental Research. “This opens the door to crop improvements that are sorely needed for energy production, sustainable human and animal food production, and a healthy environmental balance in agriculture worldwide.”

With the soybean genetic code now determined, the research community has access to a key reference for more than 20,000 legume species and can explore the extraordinary evolutionary innovation of nitrogen-fixing symbiosis that is so critically important to successful agricultural crop rotation strategies.

Jeremy Schmutz, the study’s first author and a DOE JGI scientist at the HudsonAlpha Institute for Biotechnology in Alabama, said that the soybean sequencing was the largest plant project done to date at the DOE Joint Genome Institute. “It also happens to be the largest plant that’s ever been sequenced by the whole genome shotgun strategy—where we break it apart and reassemble it like a huge puzzle,” he said. Of the more than 20 other plant genomes taken on by the DOE JGI, those already sequenced include the black cottonwood (poplar) tree and the grain sorghum, both targeted because of their promise as biomass feedstocks for biofuels production.

“This is a milestone for soybean research and promises to usher in a new era in soybean agronomic improvement,” said co-author Gary Stacey, Director, Center for Sustainable Energy and Associate Director and National Center for Soybean Biotechnology, University of Missouri. “The genome provides a parts list of what it takes to make a soybean plant and, more importantly, helps to identify those genes that are essential for such important agronomic traits as protein and oil content.”

Soybean, one of the most important global sources of protein and oil, is now the first legume species with a published complete draft genome sequence.

From the sequence analysis, Stacey said that he and his colleagues have identified more than 46,000 genes of which 1,110 are involved in lipid metabolism. “These genes and their associated pathways are the building blocks for soybean oil content and represent targets that can be modified to bolster output and lead to the increase of the use of soybean oil for biodiesel production.”

While biodiesel from soybean oil represents a cleaner, renewable alternative to fossil fuels with desirable properties as a liquid transportation fuel, there simply is not enough oil produced by the plant to be a competitive gasoline on a gallons-of-fuel yield per acre. The availability of the soybean genome may provide some key solutions. “We can now zero in on the control points governing carbon flow towards protein and oil,” said Tom Clemente, Professor, Center for Biotechnology, Center for Plant Science Innovation at the University of Nebraska, Lincoln. “With the combination of informatics, biochemistry and genetics we can target the development of a soybean with greater than 40 percent oil content.”

The availability of the soybean genome sequence has accelerated other soybean trait discovery efforts as well. For example, researchers have used the sequence to zero in on a mutation that can be used to select for a line that has lower levels of the sugar stachyose, which will improve the ability of animals and humans to digest soybeans.

In another effort, by comparing the genomes of soybean and corn, a single-base pair mutation was found that causes a reduction in phytate production in soybean. Phytate is the form in which phosphorous is stored in plant tissue. Because phytate is not absorbed by the animals that eat the feed, the unabsorbed phytate passes through the gastrointestinal tract, elevating the amount of phosphorus in the manure. Limiting phytate production in the soybean could reduce a major environmental runoff contaminant from swine and poultry waste.

Of additional importance for soybean farmers is that the genome sequence has provided access to the first resistance gene for the devastating disease Asian Soybean Rust (ASR). In countries where ASR is well established, soybean yield losses due to the disease can be as high as 80 percent.

Provided by DOE/Joint Genome Institute

Source: Physorg

The high specialization and professionalism of Expobioenergía has transformed it into the  sector´s annual appointment and so is it shown by the numbers that have been mentioned during its third edition. Â

Expobioenergía.08 reached the foreseen objectives and it attracted a total of 13.186 visitors, 40% more than in the previous edition. This fact, next to the high grade of satisfaction shown by the exhibitors makes Expobioenergía become again the obliged appointment of the bioenergy sectorduring 2009. Â

Expobioenergía in its third edition has been able to consolidate and has become the biggest European encounter in the sector of the bioenergy, being able to highlight regarding to other events of similar characteristic by its high specialization level, the high number of exhibitors and represented trademarks (a total of 424), the number of professional visitors and the numerous complementary activities that are developed around this fair.Â

The companies of the sector that are interested in participating in Expobioenergía.09 can already reserve space and profit from the different discounts if they do their inscription before December 19th.Â

Cesefor and Avebiom, organizers of Expobioenergía, will maintain during 2009 the objective, that since its first edition was set: to promote the bioenergy and to generate an outline of experiences exchange among companies and professionals of the sector.Â

Source: Expobioenergía/ María Castañeda

IT WILL TURN THEM INTO THE MAYOR LOCAL PRODUCERS.

The cereal companies, that the Renova company conformed, will duplicate their present capacity in July, when they inaugurate new works. Thus, they will surpass AGD and Bunge, and Dreyfus.

Biodiesel plant/Photo: Fernando López King

The local cereal Vicentín and the multinational Glencore are building a second biodiesel plant elaborated from soya in San Lorenzo, Santa Fe, that will be ready between June and July of this year. This way, they hope to duplicate the production capacity of this biofuel that they have from last October, when they inaugurated in that point of the santafesino agro-industrial cord, one of the two majors factories in the country, with a production capacity of 240,000 annual tons.

Managers of both companies confirmed the project, although they preferred not to give more precisions. The plant that is operative, according to what was announced at the time, counts with a unit of crude soya oil refining with a capacity for 330,000 annual tons, that demanded an investment of u$s 40 million.

Renova, the company under which they merged in this business, is one of the two mayor biofuel exporting companies of the country. In fact, along with Ecofuel (the company of the other national-multinational cereal pair, Bunge and Aceitera General Deheza (AGD), that has the same present  production capacity and technology that Renova), were responsible for more of 90% of the exports of that product last year. According to the Secretary of Agriculture, in 2007, the sales of the exported biodiesel reached u$s 268 million, that came from 319,093 dispatched tons (equivalent to a value of u$s 841 per ton). Of those shipments, almost three quarters (73%) were destined to the United States, whereas the rest went to countries of Europe.

Interest of several

In the country there are eight qualified companies to export these vegetal fuels. Besides Renova and Ecofuel, the other plant that has certain weight in the export is the one that has Vicentín in its place of origin, Avellaneda, in the north of Santa Fe, with a capacity of 47,500 tons. The others are Biomadero, with a capacity for 72,000 tons, located in the Buenosairean locality of Villa Madero; Soy Energy, in the Buenosairean locality of Pilar, with a capacity for 32,400 tons; Energía Sanluiseña Refinería Argentina, in the city of Villa Mercedes, with a capacity for 30,000 tons; Advanced Organic Materials (AOM), also in the Buenosairean Pilar, with a capacity for 15,800 tons, and Biodiesel, in the santafesina Sancti Spiritu, with a capacity for 6,480 tons.

There are another five projects under construction, all in Santa Fe. Unitec Bio, of the media entrepreneur Eduardo Eurnekian, of 220,000 annual tons. Mills, food company of the Perez Companc family, began to construct a plant in Rosario, with a capacity for 100,000 tons. The French Trader Louis Dreyfus is building a greater plant, of 300,000 tons, in its General Lagos complex. Explora will produce 120,000 tons in Puerto San Martin, and Patagonia Bioenergía, 250,000 in San Lorenzo. Mean while, ACA just announced their association with two European companies to build a mega-plants of 250,000 tons of biodiesel in Puerto San Martin.

Alejandra Groba Buenos Aires

Source: Cronista.com