Category Archives: Biofuel legislation

Senators propose biofuel shake up with end to ethanol subsidies

May 04, 2011   Karl   No comments
US Senators

End of US ethanol subsidies?

The US, and by extension global, biofuel market could be on the verge of a major shake up, after a bi-partisan group of senators yesterday tabled a new bill that would end the generous subsidies provided to US ethanol producers and axe the tariff imposed on ethanol imports.

The group, led by Democrat senator Dianne Feinstein and Oklahoma Republican Tom Coburn, argued that the 45c per gallon tax credit provided to oil refiners for each gallon of ethanol they blend with gasoline was no longer justified given the scale of the US deficit.

The tax break is expected to expire this year, but the senators argue that repealing the necessary legislation before 1 July would save the US government about $3bn.

The new bill would also repeal the 54c per gallon tariff imposed on ethanol imports – a move that could open up the fast-expanding US biofuel market to imports from Colombia and Brazil. Supporters of the bill claim that the tariff makes the US more reliant on fossil fuel imports as it stops imports of cheaper ethanol.

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Europe’s biofuel dispute splits the industry

May 04, 2011   Karl   No comments
Eu Flag

Europe's biofuel dispute splits the industry

A divisive European debate over the green credentials of biofuels has stalled investment and threatens the future of some producers, but could also create lucrative opportunities, companies said on Tuesday.

After a two-year investigation, the European Commission has decided that the complex issue of “indirect land use change” (ILUC) can lessen carbon savings from biofuels. In July it may announce moves to curb the least sustainable — possibly by raising an EU-wide sustainability benchmark.

“Such a factor would render the European biofuel industry no longer viable,” the European Renewable Ethanol Association and the European farmers’ body Copa-Cogeca said on Tuesday. “ILUC is far too complex an issue for any quick policy fix.”

The battle over ILUC has thrown into doubt EU plans to create a $17 billion annual market for biofuels from producers such as France, Germany, Brazil, Malaysia and Indonesia.

“It has sent a lot of signals to investors that the policy environment is uncertain,” Kare Riis Nielsen, head of EU affairs at Danish enzymes producers Novozymes, told Reuters. “The whole industry is suffering from that.”

But the very greenest of biofuels, such as the next-generation biofuels Novozymes is involved in creating, could also benefit from the EU’s review of biofuels strategy.

“What’s most important now is that we come out of this with crisp, clear signals to the investment community and consumers,” said Nielsen. “ILUC could create a window of opportunity.”

WHAT IS ILUC?

The concept of “indirect land-use change” is relatively new, and still being developed, so it is not surprising that industry is reluctant to accept it.

In essence, it means that if you take a field of grain and switch the crop to biofuel, somebody somewhere will go hungry unless those missing tonnes of grain are grown elsewhere.

The crops to make up the shortfall could come from anywhere, and economics often dictate that will be in tropical zones, encouraging farmers to cut out new land from forests.

Burning forests to clear that land can pump vast quantities of climate-warming emissions into the atmosphere, enough in theory to cancel out any of the climate benefits the biofuels were meant to bring.

The Commission has run 15 studies on different biofuel crops, which on average conclude that over the next decade Europe’s biofuels policies might have an indirect impact equal to 4.5 million hectares of land — an area the size of Denmark.

Some in the biofuels industry argue that the science is flawed and that the issue could be tackled by a major overhaul of agricultural strategy to improve productivity or by pressing abandoned farmland back into action.

Waste products from biofuels production can also be fed to animals, reducing the pressure on land resources.

EU sources say July’s announcement by the European Commission will broadly endorse the green credentials of bioethanol but raise questions about some sources of biodiesel.

It will also create pressure to speed up the adoption of next-generation biofuels from agricultural residues such as straw, which do not create ILUC and are no longer just a dream, says Novozymes. “It’s not yet cost-competitive, but it will be,” said Nielsen. “The volatility of oil prices makes it a tough guess, but probably by 2020 it can compete with gasoline.”

However, the EU biofuels strategy has so far failed to help next-generation fuels take off and needs tweaking, he added.

“There is no longer a technical barrier. It is a political barrier. We need to incentivise the best performing biofuels. We need support for those that take the first-mover disadvantage.”

 

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China Set to Increase Use of Biofuels, reduce CO2 emmissions

May 03, 2011   Karl   1 Comment
biofuel model china

A model of a biofuel plant at a new-energy exhibition in Beijing

China can become a leader in the production of second-generation (2G) biofuels, made from agricultural waste instead of foodstuffs, such as sugar, starch and vegetable oils said a senior executive from one of the industries’ leading companies.

That’s as the nation attempts to improve energy efficiency and reduce reliance on fossil fuels.

“The United States is the biggest producer of first-generation (1G) biofuels. Regarding 2G production, no other country has shown leadership, so maybe China will move faster on this because it has been put on the political agenda,” said Michael Christiansen, president of Novozymes (China) Investment Co Ltd, referring to the nation’s 12th Five-Year Plan (2011-2015).

Christiansen made the remarks in an exclusive interview with China Daily on April 15 at Boao, a small town on the east coast of Hainan province, where he was attending the annual “Forum for Asia” conference.

The Denmark-based Novozymes is the largest provider of industrial enzymes and market leader in enzyme technology for biofuels.

Christiansen said Novozymes has a market share of about 50 percent in China in 1G biofuel production, but more opportunities will be created as the nation’s new Five-Year Plan places a heavy focus on 2G production, although detailed plans are not yet available.

Global biofuel consumption will increase from the current level of 55 million tons of oil equivalent – the amount of energy obtained by burning one standard barrel of oil – to 750 million tons in 2050. Meanwhile, over the same period, the proportion of biofuel used in the transportation-fuel market will rise from 2 percent to 26 percent, with 2G biofuels accounting for roughly 90 percent of all biofuels used, according to a report by the International Energy Agency.

By developing 2G technology, China can reduce the import volume of crude oil, and reduce CO2 emissions by 90 percent from current levels, he said. “It fits perfectly with China’s next Five-Year Plan to reduce inefficiency.”

The nation has announced plans to reduce CO2 emissions by 40 to 45 percent by 2020. It’s expected that energy consumption of non-fossil fuels could account for more than 11 percent of the country’s total energy consumption by 2015.

Christiansen suggested that between 2.4 and 2.8 percent of China’s total energy consumption could be produced from biomass (organic material) by that date. “That’s a big increase compared with the existing situation – five, seven or even 10 times more.”

Currently, Chinese annual biofuel production stands at 2 million tons, he estimated.

In addition, 2G biofuel production could benefit the economy with less effect on food supply and prices.

“1G biofuel has become very popular, but we worry that if it becomes too popular, too much food goes into the production of biofuels. Production of the fuel from agricultural waste will have a lower effect on food prices.”

Food security concerns have led the government to restrict grain-based ethanol production and to promote non-grain-based fuel ethanol production instead, according to a report by the World Economic Forum (WEF) in June 2010.

In May 2010, Novozymes, China National Cereals, Oils and Foodstuffs Corporation, and China Petrochemical Corporation announced the construction of a 10,000 ton-capacity demonstration plant for commercial-scale production of advanced biofuels from corn stover – the leaves and stalks of maize plants – which will begin this year.

“By the end of 2011, we plan to take the next step moving from a pilot scale, which is 20 times bigger than what we have today. Then by 2013, we will move to a commercial size, which will be somewhere between 50,000 and 100,000 tons,” said Christiansen.

In common with other companies in the industry, Novozymes is also eyeing China’s biochemical market, he said.

In April 2010, Novozymes and Dacheng Group, a leading corn processer located in Jilin province, made an agreement to make plastics from agricultural waste.

The companies have agreed to expand their cooperation in developing biochemicals derived from biomass and to promote production of plant-based glycol. Now the two are evaluating different production methods.

Christiansen predicted the company will maintain an annual growth rate of around 20 percent in the biofuel and biochemical business in China over the next five years.

“That’s a lot of fantastic benefits in this. We are in the starting phase of creating a new industry. The new ways of producing chemical and fuels will take time. In five years, we will see a more mature industry.”

According to the WEF report, the conversion of biomass into fuel, energy and chemicals has the potential to generate upwards of $230 billion for the global economy by 2020.

China’s use of biofuel ethanol will reach 12.7 billion liters by 2020, while automotive ethanol gasoline usage will be 100 percent, and annual consumption of biodiesel will reach 2.3 billion liters, according to the targets set by the National Development and Reform Commission.

 

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Relax biofuel laws to help ease the food crisis, World Bank says

April 15, 2011   Karl   No comments
world bank biofuel

Relax biofuel laws to help ease the food crisis, World Bank says

The World Bank has called for the relaxation of laws requiring crops to be blended into petrol, saying that they are contributing to the global food price crisis.

Robert Zoellick, the President of the Bank, said that a “toxic brew” of higher food and fuel costs was heightening popular unrest in regions such as the Middle East and North Africa and condemning millions more people to poverty.

Among the many causes of high food prices are rules in countries, such as the United States, that require a certain percentage of petrol to come from corn-based ethanol.

Some 31 per cent of the corn produced in the US in 2008 was turned into ethanol, and government forecasts show that this will hit 40 per cent this year.

Biofuels have been a cornerstone of American attempts to reduce its dependency on imports of oil from the Middle East and elsewhere.

Hassan Zaman, a World Bank economist, said that although the Bank was not advocating the abolition of these laws, it believes that they should be relaxed when food prices surge beyond certain thresholds.

The World Bank also urged governments to spurn restrictions on exports of grains, bolster supplies of information on food stocks and build on the $US7 billion ($6.6bn) a year that the Bank is investing in agricultural production and irrigation.

An increase of only 10 per cent in the World Bank’s food prices index could propel another ten million people into “extreme poverty”, where they live on less than $US1.25 a day, Mr Zoellick said as he opened at the latest meetings of the Bank and the International Monetary Fund.

He added: “Mix in price gyrations and then stir in higher fuel costs, and you get a toxic brew causing real pain and contributing to social unrest.”

Luc Lampriere, of Oxfam, said: “Immediate action must be taken to address underlying factors driving food prices and volatility, which are excessive speculation and demand for biofuels.”

 

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Obama seeks to cut oil imports by one-third, increases biofuel development

March 30, 2011   Karl   No comments

Obama seeks to cut oil imports by one-third

President Obama says more domestic drilling, biofuel development and greater vehicle fuel efficiency can reduce petroleum imports. The plan is an apparent response to criticism over high gas prices by Republicans.

President Obama outlined a plan to reduce oil imports to the United States by one-third over the next 10 years by relying on further oil and gas drilling at home, development of biofuels and greater fuel efficiency in new cars and trucks.

With gas prices climbing because of unrest in the Middle East, the White House seemed to be responding to Republicans who have been complaining loudly for two months about the pain high fuel prices are bringing average Americans.

The GOP has focused on opening more domestic territory to oil and gas drilling, projects that would only begin delivering fossil fuels several years from now. In his speech before students at Georgetown University, Obama agreed that more domestic oil and gas production was a must, though he said that companies needed to develop the millions of acres they’ve already purchased in federal lease sales over the years before any new territories would be opened.

Obama sketched a picture of future imports that would rely more on producers — and allies — in the Western hemisphere, like Canada, Mexico and Brazil. Canada and Mexico are already major exporters to the United States. Brazil, which the president visited recently, is on the verge of developing major new oil and gas reserves.

Implicit in the speech was the U.S. desire to lessen its dependence on the autocracies of the Middle East, which account for a major share of global oil production and some of which are facing pressure from their citizens for more democratic reforms.

Successive administrations since President Nixon’s have issued similar calls for energy independence — or at least reduced dependence. But as Obama himself acknowledged, those plans have gone nowhere, and the U.S. imports a greater percentage of its daily oil consumption now than it did 40 years ago.

Moreover, the president faces a toxic political climate where the chances of bipartisan cooperation remain terribly remote. As a result, the administration may have to rely on executive orders to carry out some of its plans. In one realm, increased fuel efficiency, the federal government has worked with car companies and California to boost gas mileage in new cars after decades of congressional inaction on the issue.

Thanks and source LA Times

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Boeing moves to fast-track jet biofuel certification

March 27, 2011   Karl   No comments

Boeing to test China biofuel

Boeing moves to fast-track jet biofuel certification

As fossil fuel prices continue to soar, Boeing is looking to accelerate the aviation industry’s transition towards alternative biofuels, taking the reins of an effort to simplify certification standards for biofuels.

The aircraft giant yesterday announced it has teamed up with the Ecole Polytechnique Federale de Lausanne (EPFL) to launch the Sustainable Biomass Consortium (Sustainable Biomass Consortium ), a group that will aim to make it cheaper for airlines and other users of biofuels to develop and adhere to effective standards.

The organisations will work together with environmental groups and governments to “help align regional and regulatory requirements”, Boeing said in a statement, adding that it would also aim to make it easier for biofuel sources to be independently verified as sustainable.

“With increasing environmental, regulatory and social pressures on aviation, having harmonised standards for sustainable biofuel development is crucial,” said Billy Glover, vice president of environmental and aviation policy at Boeing Commercial Airplanes.

“Our industry needs these fuel sources and this consortium will help ensure we have a transparent way to collaborate among certification processes that guide us towards a more sustainable future.”

The move comes as a number of regional biofuel certification schemes are beginning to emerge.

For example, last June the EU’s Renewable Energy Directive issued guidelines on how biofuel certification should be implemented under that act. It called for guarantees that biofuels should not come from forests, wetlands and nature protection areas, while also demanding that biofuels offer significant greenhouse gas savings.

In addition, EPFL’s Energy Centre had already established the Roundtable on Sustainable Biofuels, which focuses on creating global standards for biofuels production.

The unrest in the Middle East has contributed to an alarming rise in fuel prices, making it more important for already low-margin airlines to buy fuel from other sources. According to the International Air Transport Association, jet fuel prices are up 11 per cent this month compared to last month, and 47 per cent compared to a year ago.

The SBC will begin work next month, and will conduct projects over the next two years in China, Africa, the EU, Latin America, North America and Australasia, Boeing said.

The aircraft company is one of a number of firms in the aviation sector currently conducting biofuel trials, including airlines Virgin Atlantic, Air New Zealand, Quantas and Lufthansa.

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BAFA: Germany consumed 780 million gallons of biodiesel in 2010

March 16, 2011   Karl   No comments
biodiesel pump

Ethiopia gets geared up for biodiesel

Germany’s Federal Office for Economy and Export Control (BAFA) released figures recently on the nation’s total biodiesel sales in 2010. BAFA reports that approximately 2.6 million metric tons (780.5 million gallons) of biodiesel was sold into the German fuel market last year. A majority of that, about 2.3 million tons, was sold for blending into the 32.1 million ton German diesel fuel market, which comes to slightly more than 7 percent.

The German oilseed council UFOP commented on the numbers, stating, “Biodiesel will remain an alternative fuel of great importance in the future … the consumption of diesel will continue to rise due to the constantly higher quantities of goods transported by road.”

The council then said, “Besides, so-called second-generation fuels replacing diesel will not be available for a foreseeable time, UFOP is convinced. So UFOP confirms the necessity that biodiesel should be conceded a future both as pure fuel and as admixture in motor fuel. There is no other way of meeting the climate targets in the transport sector.”

While Germany consumed more than 780 million gallons of biodiesel last year, the U.S. only produced 315 million gallons of biodiesel in 2010, according to preliminary data released by the U.S. Census Bureau.

Thanks and Source biodieselmagazine.com

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EU bioethanol group weighs U.S. subsidy lawsuit

March 15, 2011   Karl   No comments
Eu Flag

EU bioethanol group weighs U.S. subsidy lawsuit

European bioethanol producers will decide by the end of March whether to file a legal complaint with the European Commission over U.S. subsidies, the EU’s main bioethanol lobby said.

Producers such as Germany’s CropEnergies and Spain’s Abengoa are gathering data on tax credits granted by the U.S. government to U.S. firms that blend ethanol with gasoline. They say the tax break squeezes the margins of competing European producers when the resulting blend is exported to the EU.

“By the end of the month we should know where we stand and whether we have a case that’s strong enough to take to the Commission,” Rob Vierhout, secretary-general of ePURE, an industry group representing firms that make up 80 percent of European bioethanol production, told Reuters.

“European producers are struggling with these imports that put pressure on prices.”

The group’s efforts reflect the global race to secure a slice of Europe’s lucrative renewable energy market, where demand is boosted by official targets designed to fight climate change and wean the bloc off higher-polluting fossil fuels. Europe used about 5 billion litres of bioethanol in 2010, with about 12 percent imported from the United States and Brazil, according to industry estimates.

If a complaint by producers is filed and proves successful, it could lead to higher import tariffs against U.S. bioethanol.

In a similar case in 2008, the bloc raised tariffs against U.S. biodiesel after it found Washington had given illegal payments to blenders and determined that exporters were dumping biodiesel on the EU market.

U.S. producers defend the so-called Volumetric Ethanol Excise Tax Credit, which provides a 45-cent-a-gallon tax credit to ethanol blenders, as essential to propping up a fledgling industry. Last year, Congress decided to extend the tax credit until the end of 2011.

“While the complaints of the European ethanol industry are understandable, their angst is misguided at U.S. ethanol tax policy,” said Matt Hartwig, spokesman for the U.S.-based Renewable Fuels Association.

“It remains unclear if any additional volumes of ethanol are flowing into Europe under this particular tariff schedule. EU nations have yet to provide any data and we have not seen any to date that suggests this is happening at above normal levels.”

COMPLICATIONS AT CUSTOMS

Producers are separately lobbying the European Commission to streamline the bloc’s customs codes, a move that could classify bioethanol blends as high-taxed agricultural imports, Vierhout said. Currently EU states can import the fuel labelled as a chemical, qualifying for lower import duties.

That initiative has created a standoff within the executive, Vierhout said, pitting the Commission’s tax and agriculture departments — which are sympathetic to proposing such a change — against its trade negotiators, who are opposed.

Trade officials fear changing customs codes could prompt Brazil and the United States to demand compensation under world trade rules, he said.

Unlike a subsidy complaint — which would, if launched, target only the United States — classifying bioethanol blends as an agricultural could increase the tariffs on imports from all countries by about 40 percent, Vierhout said.

EU trade officials were not immediately available to comment on the issue.

Thanks and Source Reuters

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USDA announces $573 million in bioenergy funding opportunities

March 15, 2011   Karl   No comments

In Washington, Agriculture Secretary Tom Vilsack today announced that USDA is seeking applications for loan guarantees under the Biorefinery Assistance Program, and payments to producers under the Repowering Assistance Program, and the Bioenergy Program for Advanced Biofuels.

This funding round includes: $463 million in loan guarantees under the USDA’s Biorefinery Assistance Program;   $25 million under the Repowering Assistance Program to encourage the use of renewable biomass as a replacement fuel source for fossil fuels used to process heat or power in the operation of eligible biorefineries; and up to $85 million under the Bioenergy Program for Advanced Biofuels, for advanced biofuel production from renewable biomass excluding corn kernel starch.

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Ethiopia to Increase Ethanol Content in Petrol to 10% E10

March 13, 2011   Karl   1 Comment
bioethanol fuel pump

Ethiopia to Increase Ethanol Content in Petrol to 10%

In response to skyrocketing oil price at the global market, the Ethiopian government on Friday unveiled that it will increases the volume of Ethanol content in gasoline to 10% as of March 15.

Since 2009, the country has been provided a 5% ethanol and 95% benzene blended (technically known as E5) for the market in which a Sudanese owned oil company, Nile Petrol, was a sole agent that was carrying out the blending process and distributing for all local oil station.

But now the Ministry of Water and Energy (MoWE) declared that Oil Libya is awarded the task of blending the 10% ethanol-Benzene blend.

According to the Ministry of Water and Energy, the country has a plan to top up an ethanol blended oil to the local market to reach E25 (a 25% ethanol content blended in Benzene and biodiesel).

The State Minister of MoWE, Wondimu Tekle, said that the consumption of oil that is imported to the country is increasing with the booming of economy in the country.

According to him, Ethiopia spends more than 8.6 billion Birr every year to import fuel oil with hard currency.

“We want to increase the ethanol content from E5 to E10 to help lower the foreign exchange we spend on oil. This is also important measurement to stabilize the market by reducing the burden of the entire consumers,” he said.

“Since we import oil with huge amount of hard currency, the only solution we have is to develop alternative energy sources like bio-fuel,” he added.

He pointed that due to the introduction of this project, mostly in Addis Ababa and its surrounding areas, the country was able to blend over 13 million liters of ethanol blended oil (E5) and as a result saved over USD10 million in two years.

According to a document obtained from MoWE, from 2009 to the end of 2010, about 2.9 million liters of ethanol has been so far blended with over 245 million liter of Benzene.

In his briefing, the state minister confirmed that, while designing this massive plan of developing bio-fuels projects, the government had hoped that private investors would contribute a lot; however, most of them failed to so.

He also explained that his office has identified those investors and sent their name to the Ethiopian Investment Agency and other pertinent government organizations to take action against these companies who didn’t live up with their commitment. But the state Minister declined to mention the names of those companies.

Ethiopia has three state owned sugar factories which have been operational for long time, including Fincha, Metahara and Wonji.

However, the country produces ethanol from byproduct of sugar factory solely from Fincha which has been so far producing Eight million liters every year since 2009. Similarly, Metahara Sugar Factory is currently set to start producing Ethanol that amounts to 10 million liters per year as of this month.

The fourth factory which is under construction is the Tendaho Sugar Factory which was also said to be the biggest and most promising factory expected to produce huge amount of ethanol upon its completion.

According to the state minister, upon the completion of all sugar factories including the private factories, the country will be able to produce over 180 liters of ethanol after five years.

Of course, Ethiopia has been producing ethanol only for benzene consuming automobiles. But the state minister indicated that still another project is on the pipeline to produce biodiesel for diesel consuming motors.

According to MoWE, the bio-fuel is set to be produced from jatropha, caster seeds and palm trees in which the planting of these trees is being undertaken by the Ministry of Agriculture and Regional Development in Amhara, Tigray and Southern regions.

 

Nadew Tadele, Director of Bio-fuel Development Coordination Directorate within MoWE told Ezega.com thatthe Organization of the Amhara Rehabilitation and Development Association (OARDA) is the first local company that will build biodiesel processing factory in Bati Woreda of Amhara Regional state.

The organization is also seeking the technological assistance from the MoWE. However, Nadew did not indicate the investment amount the organization has proposed.

OARDA has so far planted over 165 million seedlings of Jatropha in 50 woredas in degraded areas as part of preparation for the would be built biodiesel processing factory, according to Nadew.

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