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In the News

Expanded Ethanol Plant Boosts Production

March 17, 2018

By Noah Fish

The first bushels of corn were delivered to the new system at the Al-Corn Clean Fuel ethanol plant last week, signaling that completion of its $146 million expansion and modernization project is right around the corner.

Al-Corn CEO Randall Doyal said construction is slated to wrap up the first week of April, and the system should be functional later that week. Construction on the project began in December 2016 and was originally expected to end this July. Doyal attributed the swift work to good collaboration by personnel.

“To get done the first week in April, that’s phenomenal,” said Doyal, who credited McGough Construction for instituting a system that has subcontractors and plant staff working effectively together.

The expansion will increase annual ethanol production by the Claremont-based cooperative from 50 million gallons to 120 million gallons by early this year, making it one of the state’s top producers in the industry. The plant will also increase its annual throughput of corn from 17.5 million bushels to 47 million bushels. Doyal said the move is in line with the cooperative’s proactive history of trying to stay relevant in a wavering industry.

“In any business that’s commoditized, you want low-cost producers, because that’s how you weather the storms that come with all cycles of business,” said Doyal. “You want to be in that top tier, and the folks that continue to operate when others are forced to stop production because of financial circumstances.”

The farmer-owned ethanol production cooperative was formed in 1994 as a way for local farmers to add value to their corn crop. Annually, the plant turns out 132,000 tons of livestock feed, 12 million pounds of corn oil and 70,000 tons of beverage grade carbon dioxide, according to the cooperative’s website.

The expansion consists of new additions as well as the modification of some existing equipment at the plant. Additional fermenters have been added, and the fermentation scrubber has been expanded to operate at twice the water and gas flow rate of the previous unit.

Other updates include new distillation and vaporization vessels and a Combined Heat Power unit, which will be capable of generating up to 40 percent of Al-Corn’s power. The plant also expanded its rail capacity, which Doyal said will allow Al-Corn to reach new markets. The upgraded Al-Corn facility covers 200 acres altogether.

On March 7, three of the original Al-Corn board members — Lyle Kuhlmann, Lyle Borgschatz and Orlo Toquam took part in delivering the first bushels into the new machinery. All three were joined by their sons, who now serve on the board.

“That was really kind of cool,” Doyal said of the ceremonious testing. “And in one case, the person actually driving the truck was a grandson of an original board member. Really just a neat, multigenerational impact we got to see there.”

Read the original article: Expanded Ethanol Plant Boosts Production

Toyota Reveals World-First Flexible Fuel Hybrid Prototype in Brazil

Toyota

March 19, 2018

Press Release

A prototype of the world's first hybrid flexible-fuel vehicle (Hybrid FFV), debuted in an event Toyota held today in Sao Paulo, Brazil. Stakeholders including the state government, universities, and the sugarcane association (the Sugarcane Industry Union: UNICA) attended the event. The prototype is the combination of a flexible-fuel vehicle (FFV) that can be powered by both gasoline and alternative fuels such as ethanol, and Toyota's famous hybrid system which combines a combustion engine and an electrical powertrain.

Hybrid FFV is a new powertrain system that Toyota is developing with an aim to popularize Hybrid Electric Vehicles in Brazil and contribute to the environment through reduction of CO2 emissions. Hybrid FFV has the potential to drastically reduce total CO2 emissions as it is built on Toyota's hybrid system that has high energy efficiency and low emission levels and it also leverages the CO2 reabsorption capacity of ethanol, a plant-derived 100% renewable fuel. The prototype uses the Toyota Prius as a base model, which is currently sold and becoming popular in Brazil.

Toyota's initial studies indicate that Hybrid FFV has a great advantage in environmental performance compared to a standard FFV, when we estimate CO2 emissions starting with the extraction of the raw material, through its distribution at the fuel pumps to the ignition in the combustion process of the car. If it is fueled only by sugarcane-based ethanol (E100 fuel), the results are even better.

The development of Hybrid FFV represents one of Toyota's efforts to achieve its "Environmental Challenge 2050" where it challenges itself to reduce vehicle CO2 emissions by 90% in comparison with 2010 levels, by 2050. Another objective of the Environmental Challenge is to completely eliminate CO2 emissions from the vehicle lifecycle, including materials, parts and manufacturing. In line with that goal, Toyota also targets to have more than 5.5 million electrified vehicles in its global new vehicle sales by 2030.

"I am very proud of our Toyota do Brasil engineers that worked closely with our engineers in Japan to develop the world's cleanest hybrid vehicle that uses ethanol for our Brazilian customers. The invention demonstrates our journey in providing a new mobility society," said Steve St. Angelo, Senior Managing Officer of Toyota Motor Corporation serving as CEO of Toyota Latin America Region and Caribbean, as well as Chairman of Toyota do Brasil.

Toward the commercialization of Hybrid FFV in Brazil, Toyota will collect various data through real-world road testing in Brazil going forward and evaluate the system's reliability, durability, and powertrain performance.

Read the original press release: Toyota Reveals World-First Flexible Fuel Hybrid Prototype in Brazil

Sen. Tina Smith Stands up for Minnesota Jobs & American Energy Independence, Presses White House to Preserve Strong Renewable Fuel Standard

Senator Tina Smith

March 13, 2018

Press Release

U.S. Senator Tina Smith is calling on the White House to support Minnesota’s rural communities and American energy independence by maintaining a strong Renewable Fuel Standard (RFS), the federal program that sets the level of biofuels—like ethanol and biodiesel—that are blended into our nation’s fuel supply.

After a series of postponed meetings between the White House and U.S. biofuel producers—sparking fears that there may be an attempt to weaken the RFS—Sen. Smith is urging the Administration’s top energy officials to come together with renewable energy leaders and discuss how to preserve and protect the program.

“I fought for a spot on the Senate Agriculture Committee because I want to do my part to help Minnesota’s ag economy grow—and because I want to see our rural communities, farmers, clean energy producers, and agribusinesses thrive,” said Sen. Smith. “We can’t make that a reality without a strong Renewable Fuel Standard. The RFS supports thousands of local jobs and helps lead to billions of dollars in economic activity, it cuts our dependence on foreign oil, and it helps reduce the environmental impact of energy. I strongly urge the White House to get on board with championing the RFS—our family farmers and clean energy producers depend on this critical program.”

Read the original press release: Sen. Tina Smith Stands up for Minnesota Jobs & American Energy Independence, Presses White House to Preserve Strong Renewable Fuel Standard

Positive US Ethanol Margins are Driving Ethanol Production Growth

Ethanol Producer Magazine

March 7, 2018

By U.S. Energy Information Administration

Estimated ethanol production margins at U.S. corn ethanol plants averaged 22 cents per gallon (gal) in 2017. Last year was the fifth consecutive year that margins have averaged more than 20 cents/gal, which has helped drive consistent ethanol production growth over that period. U.S. ethanol production averaged an estimated 1,032 thousand barrels per day (b/d) in 2017, marking a fifth consecutive record level of annual production.

Increases in ethanol supply have outpaced increases in domestic demand in 2017, which have contributed to relatively low spot prices and margins that are about 20 cents/gal lower than the previous four-year average but still largely in line with levels in the previous two years.

Ethanol producer margins are estimated by EIA for a dry mill corn ethanol plant of average capacity located in the Midwest, a region that is home to more than 90 percent of domestic fuel ethanol production capacity. EIA estimates these margins by taking the sum of revenue generated from the sale of ethanol and co-products, such as distillers dried grains with solubles (DDGS) and corn oil, and subtracting variable and fixed costs. Variable costs include expenses such as the cost of corn and natural gas, along with a fixed operating cost of 35 cents/gal.

The price of corn is the largest variable cost associated with a dry mill corn ethanol plant, and profits are generally highest when corn supply is plentiful and demand for ethanol gasoline blending is high. U.S. corn production has been at record high levels in recent years, which has kept corn prices generally stable, ranging between $3.40 and $4.00 per bushel since 2015. A period of drought in 2012 and 2013 led to corn prices greater than $8.00 per bushel, resulting in one of the least profitable periods for ethanol operators.

In the United States, ethanol is primarily used as a blending component in the production of motor gasoline and mainly blended in volumes up to 10 percent ethanol, known as E10. Ethanol demand is highly dependent on motor gasoline consumption, and ethanol production has been driven higher in recent years because of the Renewable Fuel Standard, the program administered by the U.S. Environmental Protection Agency that mandates the blending of biofuels into the nation’s fuel supply. Although demand for higher ethanol blends such as E15 and E85 remains limited, low ethanol prices and increasing RFS targets have created favorable blending conditions for these higher ethanol blends.

For most of 2017 and the first two months of 2018, ethanol production, net inputs, and inventory levels have been near or above average levels in the previous five years (2012–2016). During December 2017, fuel ethanol production set a four-week record high, averaging 1.09 million b/d, while ethanol blending into gasoline, measured by net inputs, was nearly unchanged from the previous year. Despite record-high domestic gasoline demand and record-high ethanol exports in 2017, ethanol production exceeded consumption, which led to end-of-2017 inventories that were four million barrels higher than at the end of 2016.

In its latest Short-Term Energy Outlook, EIA forecasts that continued growth in ethanol production and limited export growth through 2019 will lead to increases in domestic consumption of ethanol by way of limited higher-level ethanol blend growth beyond E10. U.S. ethanol consumption, which increased by 1 percent in 2017, is expected to increase by an average of 1 percent through 2019, resulting in an estimated ethanol blend percentage of gasoline that increases from slightly more than 10.1 percent in 2017 to about 10.3 percent by 2019.

Read the original article: Positive US Ethanol Margins are Driving Ethanol Production Growth

University of Illinois Analysis: 10-Cent RIN Price Cap Would be ‘Catastrophic’ for Renewable Fuels

Renewable Fuels Association

March 1, 2018

By Emily Druckman

A new analysis issued by University of Illinois economist Scott Irwin finds that the impact of a 10-cent cap on RIN prices, as proposed by Texas Sen. Ted Cruz, would be “catastrophic” for the Renewable Fuel Standard (RFS) and “would have large impacts on biofuels in the U.S.” Specifically, such a price cap would serve as the mortar in the oil industry’s attempt to rebuild the “blend wall.” Irwin finds that “…the RINs price cap would remove all incentives for blending E15 and E85” and would be equivalent to “waiving…the conventional ethanol mandate down to the level of the E10 blend wall.”

Meanwhile, the analysis finds that if “…ethanol usage could be pushed up just a few hundred million gallons, …D6 [conventional biofuel RIN] prices would naturally fall to just a few cents. An RVP waiver for E15 might just do the trick.” Still, Irwin finds that the biofuel and agricultural industries would be the losers in any “deal” that exchanges an E15 RVP waiver for a 10-cent RIN price cap. “Agricultural and biofuels interests will find this tradeoff distinctly unappealing, while refining interests will tend to have just the opposite reaction,” he said.

Addressing the myth that RIN prices can somehow be capped without destroying the efficacy of the RFS program, Irwin writes, “…the RINs price and the mandate level are directly related–one cannot be changed without changing the other. Stated differently, reductions in the volume mandates will reduce the RINs price, or reductions in the RINs price will reduce the volume produced, effectively reducing the mandate.”

Reacting to the new analysis, Renewable Fuels Association (RFA) President and CEO Bob Dinneen said, “This study confirms that a demand-destroying 10-cent RIN price cap is absolutely the wrong policy for agriculture and consumers. We agree with Prof. Irwin that such a cap on RIN prices would be disastrous for the RFS and for jobs in the agricultural and manufacturing sectors. As we have stated repeatedly, and as this study underscores, the quickest way to lower RIN prices is to establish RVP parity for E15. That is the only ‘win-win’ solution that upholds the spirit and intent of the RFS and at the same time takes pressure off of RIN prices. We hope the administration closely examines this new analysis as it hosts ongoing discussions on this issue.”

The new analysis is available here.

Read the original release: University of Illinois Analysis: 10-Cent RIN Price Cap Would be ‘Catastrophic’ for Renewable Fuels

Third White House Biofuel Summit This Week Ends Without Deal

Bloomberg

March 1, 2018

By Jennifer A Dlouhy and Mario Parker

President Donald Trump found out how difficult it is to bridge the competing interests of ethanol producers and oil refiners as a third White House biofuel meeting in four days ended with no agreement on how to change U.S. policies.

Trump has been trying to address complaints from refiners who say the U.S. biofuel mandate -- the Renewable Fuel Standard -- is too costly, without alienating another key constituency: corn farmers and ethanol producers who helped elect him president.

Each side was represented in a one-hour discussion on Thursday, but they left with no breakthrough -- only a commitment to keep talking and the parameters of a potential solution, said three people familiar with the talks who asked not to be named to describe the meeting, which was closed to the press.

Participants discussed a possible policy change that would effectively cap the price of the compliance credits refiners use to prove they have fulfilled annual biofuel quotas, in exchange for an environmental waiver to allow year-round sales of E15 gasoline, containing 15 percent ethanol.

Waiver Credits

Compliance credits tracking 2018 ethanol targets plunged 13 percent to 55 cents each after the meeting, according to broker data compiled by Bloomberg.

Trump floated the idea of the Environmental Protection Agency selling ethanol waiver credits for two years at 10 cents in exchange for the E15 policy change that could expand the domestic market for ethanol.

Senator Chuck Grassley, a Republican from Iowa, the top U.S. corn growing and ethanol-producing state, tweeted after the meeting about what he called an “emerging solution.”

A “true win-win” is selling E15 year-round, a change that would lower refiners’ compliance costs while also helping farmers squeezed by low corn prices, Grassley said on Twitter.

Participants in Thursday’s gathering included the same Republican senators who met with Trump on the issue Tuesday: Ted Cruz of Texas, Pat Toomey of Pennsylvania, and Grassley and Joni Ernst of Iowa.

Economic Impacts Debated

But the focus was on 11 industry representatives who came to spell out the economic consequences of potential biofuel policy changes, including the chief executives of biofuel producers Poet, Green Plains Inc. and Renewable Energy Group Inc. and oil refiners Valero Energy Corp., PBF Energy Inc. and Delta Air Lines Inc.’s Monroe Energy LLC.

Bill Horan, a farmer with Western Iowa Energy LLC, and United Steelworkers President Ryan O’Callaghan also participated.

Tom Nimbley, chief executive of New Jersey-based refiner PBF Energy Inc., termed the conversation “productive.”

“We will continue to work with the president, senators and all stakeholders that can provide important reforms that are a win for farmers and a win for union refinery workers,” Nimbley said in an emailed statement.

But Jeff Broin, chief executive of ethanol producer Poet LLC, who also participated in Thursday’s gathering, said “nothing new was discussed.”

Jobs Imperiled?

“Removing accountability from oil companies would deprive millions of Americans the freedom to choose less expensive, homegrown biofuels and imperil countless jobs and family farms across America’s heartland,” Broin said in an emailed statement. “This issue will continue to play out. We will protect interests of this industry, farmers and consumers.”

Refiners’ concerns generally center around the compliance credits, known as renewable identification numbers, or RINs, that they use to prove they have satisfied annual biofuel quotas.

Administration officials have been considering a menu of possible changes the EPA could make without Congressional action to lower the cost of those RINs and expand the market for ethanol.

The conflict over the 13-year-old RFS that mandates biofuel use at a certain level began long before Trump moved into the White House, and it’s among the most intractable energy policy disputes in Washington. Federal law enshrines biofuel targets through 2022, but after that the EPA has more latitude to set annual quotas and shift its approach.

“Nothing will change until there is a sense of risk about what might happen after 2022,” said Mike McKenna, a Republican energy strategist. “For most on the Democratic side, this eventually becomes an electric vehicle mandate if they’re in charge. For most on the Republican side, the program should zero out in 2022.”

Trump asked for another meeting on the issue next week and told participants he wanted to see studies on the economic effects of potential policy changes.

Read the original story: Third White House Biofuel Summit This Week Ends Without Deal

EPA Unresponsive to Senators’ Letter on Agency Position on RIN Prices

Senator Chuck Grassley

March 1, 2018

Press Release

WASHINGTON – U.S. Sen. Chuck Grassley (R-Iowa) today issued the following statement on EPA’s official position, restated as recently as November 2017 that, “high RIN prices do not cause significant harm to refiners.” Grassley also commented on a previously unreleased letter that he, along with Sens. John Thune (R-S.D.), Roy Blunt (R-Mo.), Deb Fischer (R-Neb.) and Joni Ernst (R-Iowa), wrote in January 2018 asking EPA about its previous assessments that RIN prices do not affect the success of refiners. EPA has yet to respond to the senators’ letter, despite numerous staff follow-ups.

“We are told that action needs to be taken to lower RIN prices to help refiners. But under both Democratic and Republican administrations, EPA has found that RIN prices don’t affect whether refiners are successful or not,” Grassley said. “That was true of President Obama’s EPA and it’s true of President Trump’s EPA. Several of my colleagues and I asked EPA about this in light of calls to make changes to the RFS, but we’ve yet to receive a response. I’m always willing to engage in good faith discussions on any issue, but the facts need to be on the table. Changing the RFS based on misinformation and baseless arguments isn’t fair to the thousands of farmers and workers throughout rural America whose livelihoods would be harmed if the RFS were undermined.”

The EPA in November 2017 found (p. 198), “After reviewing the available data, EPA has concluded that refiners are generally able to recover the cost of RINs in the prices they receive for their refined products, and therefore high RIN prices do not cause significant harm to refiners.” In May 2015, EPA found (p. 22), “the obligated parties were generally able to recover this increase in the cost of meeting their RIN obligations in the price they received for their petroleum-based products in 2013.”

The full letter from the senators is available below and can also be found here.

January 11, 2018

The Honorable E. Scott Pruitt, Administrator

U.S. Environmental Protection Agency

William Jefferson Clinton Building
1200 Pennsylvania Avenue, N. W.
Washington, DC 20460

Dear Administrator Pruitt,

As you are aware, we have been asked to participate in discussions with our Senate colleagues regarding the Renewable Fuel Standard. Specifically, our colleagues are working to construct policy options that would lower RIN prices for certain fuel refiners. In an effort to fully understand the perceived problem that we are being asked to address, it would be useful to have clarification from the Environmental Protection Agency on a number of topics to better understand the issues being discussed. We would respectfully request your help in addressing the following questions.

-In November, EPA wrote “After reviewing the available data, EPA has concluded that refiners are generally able to recover the cost of RINs in the prices they receive for their refined products, and therefore high RIN prices do not cause significant harm to refiners.”[1] Has EPA’s view on this subject changed?

-EPA has also stated that “Merchant refiners, who largely purchase separated RINs to meet their RFS obligations, should not therefore be disadvantaged by higher RIN prices, as they are recovering these costs in the sale price of their products.”[2] Does EPA still maintain this view on the effect of RINs on merchant refiners? If not, what has changed?

-A November analysis by Wells Fargo concluded that “…bottom line performance appears positive for most of the Independent Refiners across our coverage universe as the vast majority of the cost of RINs is embedded in the crack spread.” The report also noted that RINs provide a “financial incentive to ‘build out’ wholesale infrastructure.” Does EPA agree with those conclusions?

-The RFS allows obligated parties to fulfill their volume obligations by either blending renewable fuel or purchasing RINs. Is it accurate that obligated parties have an alternative other than purchasing RIN credits? Could merchant refiners increase their ability to blend renewable fuels to comply with the RFS? Is EPA aware of any obstacles preventing any of the merchant refiners from blending physical gallons of biofuels to meet their obligation?

-Many obligated parties have made substantial, long-term investments in renewable fuel blending facilities to meet RFS obligations. Have the refiners who claim to be severely negatively impacted by RIN prices chosen to make similar investments? If so, in what way? If not, why not?

-Does EPA have any data that would demonstrate a relationship between RIN prices and quarterly operating income for these certain refiners?

-EPA determined that the RFS and RINs are not causing significant harm to refiners.[3] What are the market factors that primarily affect the financial performance of oil refiners?

-How do refining margins and financial performance differ geographically? What unique factors contribute to regional variations in refining margins in the Northeast, Gulf Coast, Midwest, Rocky Mountain region, and West Coast?

-EPA analysis revealed that “the discounting of renewable fuels enabled by the sale of the RINs, and the higher petroleum prices that result from the cost of purchasing RINs, are expected to offset each other, resulting in the RIN price having no net impact across the entire fuel pool.”[4] In other words, RINs have no impact on retail prices for standard E10 gasoline. Economists from Harvard University, MIT, Iowa State University, and other institutions have come to similar conclusions. Does EPA still maintain the view that RINs have no net impact on E10 gasoline retail prices? If not, what has changed?

-EPA analysis shows that “[h]igh RIN prices are expected to reduce the price of fuel blends that contain a higher percentage of renewable fuels, such as E85...” In turn, EPA found that consumption of E85 increases as RIN prices increase and E85 prices decrease relative to gasoline.[5] Would a price cap on RINs discourage increased renewable fuel consumption?

-Does EPA believe capping RIN prices would reduce or eliminate the economic incentive to expand consumption of fuel blends with higher renewable content, like E15, E85, and B20? Would a price cap on RINs make it more difficult for the marketplace to achieve the statutory renewable blending volumes?

Thank you for your assistance in clarifying these matters.

Sincerely,

Sen. Charles Grassley

Sen. John Thune

Sen. Roy Blunt

Sen. Deb Fischer

Sen. Joni Ernst

Read the original release: EPA Unresponsive to Senators’ Letter on Agency Position on RIN Prices

Grassley Statement on Northey Confirmation, RFS White House Meeting

Senator Chuck Grassley

February 27, 2018

Press Release

WASHINGTON – U.S. Sens. Chuck Grassley and Joni Ernst of Iowa today held a joint press conference call to discuss their meeting with President Trump and others at the White House, as well as the confirmation of Iowa Secretary of Agriculture Bill Northey to serve at USDA as Undersecretary for Farm Production and Conservation. Audio of the press call is available here. Grassley’s statement:

“Today Senator Ernst and I met with President Trump, Senator Cruz, Senator Toomey, EPA Administrator Pruitt, USDA Secretary Perdue and White House staff. I reminded President Trump of his commitment to maintaining 15 billion gallons a year of ethanol under the RFS, and his commitment to biofuels, agriculture and rural America.

“No deal on RFS reform was reached at the White House meeting. And no assurances or commitments were made to change the RFS ahead of the meeting. Senator Ernst and I attended the meeting because we are always willing to meet with our colleagues to engage in good faith discussions on any topic, especially when the President is involved.

“I understand the President is concerned any time an American’s job could be lost. I am too, which is why I strongly support the U.S. biofuels industry, which 50,000 Iowans depend on for their livelihoods. But ethanol isn’t just important to Iowa. It’s important to 14 other states in the Midwest, and to our national security.

“The potential loss of more than 1,000 jobs at PES would be devastating for the families affected. I’m glad we have a President who cares about these blue-collar workers. It’s important though that we are honest with ourselves when examining these issues. If we don’t look at the facts before reaching conclusions, it becomes harder to fix problems. Every independent study indicates that other factors, not RIN prices, led to the bankruptcy of PES. Notably, merchant refiners in Texas and elsewhere are recording record profits.

“Senator Ernst and I suggested specific policy changes that would be a win-win for biofuels and oil. But we’ve made it clear all along that a cap or waiver credit for RINs would not be a win-win. It would undercut demand for ethanol and undermine the integrity of the RFS. Farm jobs and blue-collar energy production jobs would be lost as a result. I appreciate that President Trump wants to look out for domestic energy production workers. That does not need to be at the expense of ethanol production. The RFS shouldn’t be gutted for interests seeking market advantage in disguise.

“I’m glad that the unrelated hold on Bill Northey was lifted, and he has been confirmed by voice vote. Bill Northey’s nomination to USDA has never had anything to do with a program administered by EPA. Secretary Northey is a highly qualified and honorable man. He and his family waited long enough. I’m looking forward to Secretary Northey’s swearing-in so he can get to work for American agriculture and farmers.”

Read the original release: Grassley Statement on Northey Confirmation, RFS White House Meeting

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Biofuels and Electric Vehicles Key to EU Decarbonisation, Report Claims

Biofuels International

February 20, 2018

A new report from the International Renewable Energy Agency (IRENA) says the EU could double the renewable share in its energy mix, cost effectively, from 17% in 2015 to 34% in 2030.

In order to reach long term decarbonisation goals, the report argues that all renewable transport options – both biofuels and electric vehicles, are necessary.

The report also argues that biomass will remain a key renewable energy source through to 2030 and beyond. Earlier this year, a Eurostat report argued that although wood biomass was the biggest contributor to the EU’s renewable energy supply, the mix was shifting. The Eurostat figures suggesting the rate of increase in wood biomass sources was not keeping pace with wind, solar and other renewables.

The IRENA report argues all EU countries have ‘cost-effective’ potential to use more renewables.

“Tapping the additional renewable energy potentials identified in the study would propel the EU further on a decarbonisation pathway compatible with the ‘well-below’ 2°C objective established in the Paris Agreement,” a statement announcing the report explains.

The new report comes as part of the Remap EU study, which is aiming to identify cost-effective renewable energy options across all Member States, sectors and technologies in a bid to meet and possibly exceed the proposed 27% renewables target for 2030.

2030 cost savings

According to IRENA, current plans for renewable energy deployment would result in a renewables share of 24% by 2030. The authors identify three categories of through which additional potential could be realised.

Significantly, the study notes that the first category – renewable power generation (wind, solar, hydro and thermal) could lead to strong cost savings compared to conventional technologies. The second category – which relates to the heat and transport sector and covers both electrification and biodiesel, delivers cost-neutrality to moderate savings. The third category, which involves different forms of biomass across sectors, would come at an additional cost.

However, it’s noted that full implementation of all the identified options would result in net cost savings of $25 billion (€20 billion) a year, with the savings from the cheapest options outweighing the costs of the most expensive.

Read the original article: Biofuels and Electric Vehicles Key to EU Decarbonisation, Report Claims

Analysis: RIN Prices of ‘Just a Few Cents’ are Coming—Without Changes to RFS

Renewable Fuels Association

February 16, 2018

By Emily Druckman

A new analysis from the University of Illinois shows that the conditions that caused high conventional biofuel (D6) RIN prices are changing rapidly and that “…it is not out of the realm of possibility for D6 RINs prices to fall back their pre-2013 level of just a few cents without making any changes to the RFS.”

The authors argue that high D6 RIN prices have been driven by the “gap” that exists between domestic ethanol consumption (estimated at 14.5 billion gallons in 2017) and the 15-billion-gallon statutory requirement for conventional renewable fuels. The size of that “gap” continues to shrink rapidly as E10, E15, and E85 blending has expanded. Thus, as that expansion continues at a rapid pace, the “gap” will be fully closed and RIN prices will fall dramatically. As the Renewable Fuels Association has pointed out, this is exactly how the RFS was intended to work. Establishing RVP parity for E15 would certainly help accelerate the closing of that gap. Specific findings from the University of Illinois report include:

“What seems to have gotten lost in all the noise surrounding the political war over the RFS is how rapidly the conditions are changing that created the high ethanol RINs prices in the first place. The key is the “gap” between the ethanol blend wall and the conventional ethanol mandate.”

“With the statutory conventional ethanol mandate fixed at 15 billion gallons, the growth in ethanol use has led to a sharp decline in the magnitude of the conventional gap. In particular, the latest ethanol use estimate from the EIA for 2019 implies a conventional gap of a little less than 300 million gallons. This gap is so small that an increase in projected ethanol use for 2019 of just two percent would erase the gap completely.”

The bottom-line from this analysis is that the conventional ethanol gap is well on its way to being eliminated in the next few years, even without a large expansion in the use of higher ethanol blends such as E15 and E85. If this does occur, the impact on D6 ethanol RINs prices could be almost as profound as what we witnessed in 2013, but in exactly the opposite direction.

“It is not out of the realm of possibility for the price of D6 RINs to go back to their pre-2013 level of just a few cents. Of course, this assumes that the conditions that have been driving ethanol consumption upward do not change. Even if conditions do change, the size of the conventional gap is much more manageable than just a few years ago and opens the door for very modest increases in E15 and/or E85 to close the conventional gap. For example, a 300 million gallon conventional gap could be eliminated with an increase in E15 consumption of just 2 billion gallons, or about 1.3 percent of total gasoline consumption.”

“This means it is not out of the realm of possibility for D6 RINs prices to fall back their pre-2013 level of just a few cents without making any changes to the RFS.”

“The first supposed ‘blend wall’ was the 10% ethanol blend level. Well, we crashed through that last year and are now blending above 10.0% nationally,” said Renewable Fuels Association President and CEO Bob Dinneen. “But the next blend wall is the 15-billion-gallon allotment for conventional ethanol. With increased E15 and E85 blending, we are careening toward smashing that wall as well. It seems, however, that the closer we come to that wall, the more intent some refiners become in hitting the brakes, insisting upon RFS demand destruction as the only safe course. This analysis lays waste to that false premise, and demonstrates, as we have insisted for years, that increased ethanol use will also break the 15-billion-gallon wall and lead to lower RIN prices. And RVP parity for E15 would lower RIN prices even more quickly while leaving the RFS intact. Now that’s a win-win,” he added.

Read the original analysis: Analysis: RIN Prices of ‘Just a Few Cents’ are Coming—Without Changes to RFS

Ethanol to Aid Engine Efficiency Improvements, Emission Reduction

Ethanol Producer Magazine

February 15, 2018

by Renewable Fuels Association

The Renewable Fuels Association today hailed the release of two studies by the Department of Energy that find ethanol-based high octane fuels can deliver substantial fuel economy improvements and emissions reductions when paired with optimized internal combustion engines.

The studies are part of the DOE’s Co-Optimization of Engines & Fuels initiative (Co-Optima), which is focused on identifying coordinated fuel and engine technology pathways that can improve passenger vehicle performance and reduce greenhouse gas emissions.

DOE started by analyzing the properties of dozens of potential liquid fuel components to determine which blendstocks offer the greatest potential to provide efficieny and emissions benefits in internal combustion engines. In the end, the study narrowed the pallet of fuel options down to the eight most promising high-octane blendstocks that could be blended into gasoline for better performance. These blendstocks, co-optimized with advanced gasoline engines, show potential to improve passenger vehicle fuel economy by 10 percent.

The study found that alcohol fuels, including ethanol, offer many desirable properties that will help achieve the goals of greater fuel economy and lower emissions. “Alcohols generally impart high Research Octane Number (RON), octane sensitivity, and heat of vaporization when blended into representative gasoline blendstocks,” the study found.

DOE scored the various fuel components using “merit function” criteria that focuses on the fuel’s: ability to improve engine efficiency; ability to meet current critical fuel-quality requirements; and whether there were any “showstopper” barriers to introducing these blendstocks commercially by scale by 2025-2030. Ethanol was among the blendstocks having the highest merit function values, according to DOE.

“As this new DOE research shows, ethanol is a phenomenal source of octane for high-octane fuel blends. Ethanol’s unique attributes—including high octane sensitivity and heat of vaporization—make it a highly attractive component for the high-octane fuel blends of the future,” said RFA President and CEO Bob Dinneen. “We strongly encourage the Environmental Protection Agency to take note of this research as it completes the Final Determination of the Midterm Review for the 2022-2025 fuel economy and GHG standards. Pairing advanced internal combustion engine technologies with high-octane, low-carbon fuels like E25 or E30 would be the lowest cost means of complying with increasingly stringent GHG and fuel economy requirements through 2025 and beyond.”

Read the original article: Ethanol to Aid Engine Efficiency Improvements, Emission Reduction

Nissan Considering Hybrid, Fuel-cell and Biofuel Utes and Vans

CarsGuide

February 13, 2018

by Tim Nicholson & Justin Hilliard

Nissan has confirmed it is looking at range-extender hybrid, hydrogen fuel-cell and biofuel powertrain options for its future line-up of light-commercial vehicles, including the Titan large pick-up.

When questioned about possible future LCV powertrains at the Nissan Futures event in Singapore last week, Renault-Nissan-Mitsubishi Alliance global director and Nissan Research Centre general manager Kazuhiro Doi suggested three substitutes for internal combustion engines.

“I think one of the possible solutions is e-Power-type of electrification,” he said. “We can improve the efficiency of the gasoline engine or diesel engine more by supporting the electrified technologies.”

'e-Power' is Nissan's version of a hybrid system that employs an electric motor to drive the wheels while a small-capacity petrol engine and regenerative braking charge its battery pack – similar to the Holden Volt.

This technology is currently available with the Serena people-mover and Note light hatch that are offered overseas, but Nissan has announced it will introduce more 'e-Power models' soon.

“The other is maybe fuel-cell type of technologies,” Mr Doi added. “It is okay to use biofuel or it is okay also to use hydrogen. Because in the case of hydrogen, the issue is the distribution. But if that is fleet use, we can have … a hydrogen station for fleet business use.

“Another issue is the hydrogen tank. In case of the hydrogen tank, we just increase the capacity. And even though we increase the capacity of the hydrogen tank, the weight itself has not changed, it is just carrying the hydrogen. But in the case of the battery, if we double the battery, the weight is going to be doubled. That is the critical difference.”

He also proposed the use of biofuel as a different green option for LCVs, adding that the cost of hydrogen technology is still too high to implement now.

“In the case of biofuel, the availability of energy is much, much easier than hydrogen. Maybe in that sense, it may be more practical. And I believe, technology-wise, both of them (biofuel and hydrogen fuel-cell) are possible.

“The question is how we can commercialise it. To commercialise it, we still need to have a breakthrough about the cost. Not only the technology but also the distribution.”

Specifically, biofuels are developed from liquids that have been extracted from other materials like plant and animal waste.

Nissan lobbed the e-Bio Fuel-Cell Prototype in 2016, which employed a special fuel-cell that was created with solid oxide electrolytes instead of noble metals, allowing the conversion of gaseous hydrogen into electricity to top up a 24kWh battery that motivated an electric motor.

Currently, there are several Nissan LCVs sold globally, including the mid-size Navara and large Titan pick-ups, the NV200/300/400 and fully electric e-NV200 vans, and the NT400 light truck.

Mr Doi said he did not think heavy-duty trucks should be powered by pure-electric powertrains due to their significant weight.

“Electric vehicles cannot cover everything. Usually a heavy-duty truck puts lots of load and the vehicle itself is heavy. I think it is not a good idea to put tonnes of battery on the heavy truck.

“Is that good idea to put more and more heavy stuff on the vehicle? It’s something strange. Also heavy trucks run long mileage. It is better to have some other alternative solutions.”

Nevertheless, Tesla revealed its electrified Semi truck in November last year, providing a claimed driving range of 483 to 805km on a single charge thanks to its four electric motors.

Nissan Motor Asia Pacific regional vice-president of marketing and sales for Asia and Oceania, Vincent Wijnen, confirmed that the company was considering an expansion of its electrified LCV models.

“We are selling a lot of LCVs globally, but it’s very different per region,” he said. “In this region, including Australia, I don’t think it has been necessarily the focus, with the exception of utes or pick-ups. But if you discount that and look at vans or small trucks, compared to other regions we have not really been focusing on it.”

Mr Wijnen added that looking at other offerings and technologies from Nissan’s alliance partners was another possibility.

“That doesn’t mean we shouldn’t. Because we have the products in our line-up,” he said.

“We are part of an alliance now, so accessibility to assets or complete products or sharing components is much easier when you are that size.

“So I think it is one of the things we need to, we are looking at going forward to make sure. Because it is an opportunity that we are not today necessarily exploiting fully.”

Nissan Australia managing director and CEO Stephen Lester said he was willing to assess electrified LCVs locally – like the aforementioned e-NV200 – but committing to these products would have to be justified economically.

“As I have told the product team numerous times, there is not a product that we should not be considering at least looking at,” he said. “It all comes back to commercial viability, the ability to meet the regulations of the local government for homologation and to bring a product in that meets the safety and performance expectations, and the fit for purpose expectations of Australian consumers.”

Mr Lester added that he had no update on the Titan large pick-up's Australian business case, but said he thought such a model could be a success.

“There is no secret that I think that there is opportunity in Australia for the car. This is one of the largest ute markets in the world. But there are no major players there from a significant volume perspective, and right now anyway I know there has been speculation, but the reality is I think Titan could be a vehicle that, if we can get it here to Australia, then it will work.”

Read the original article: Nissan Considering Hybrid, Fuel-cell and Biofuel Utes and Vans

Biofuels Feedstock Study Supports Billion-Ton Estimate

Ethanol Producer Magazine

February 9, 2018

By South Dakota State University

Can farmers produce at least 1 billion tons of biomass per year that can be used as biofuels feedstock?

That’s the question that researchers are trying to answer, according to North Central Regional Sun Grant Center Director Vance Owens. The goal is to replace 30 percent of the petroleum consumed in the United States with biofuels.

Analysis of up to seven years of production data gathered through the Regional Feedstock Partnership, established by the U.S. Department of Energy and the Sun Grant Initiative supports the U.S. Department of Energy billon-ton estimate. That amount could be available annually by 2030.

“Regional field trials were conducted for the most promising bioenergy feedstocks,” explained Owens, who worked on switchgrass production before becoming Sun Grant director. “Based on these numbers and other research we’ve done, we would still see over a billion tons available per year as the bioeconomy continues to develop.”

South Dakota State University was the lead institution for the more than $20 million project which began in 2007. The partnership was funded by the U.S. Department of Energy Bioenergy Technologies Office. The project involved researchers from the U.S. Departments of Energy and Agriculture, 35 land-grant universities, Heidelberg University and several industry partners, as well as Idaho National Laboratory, Oak Ridge National Laboratory, and Argonne National Laboratory.

This project helps fill an important information gap in the quest to produce biofuels from nonfood crops. South Dakota farmers could play a role in producing these bioenergy crops and the biorefineries that convert the biomass into biofuel would be built near where those crops are raised.

Results published, data available online

Field trial results and yield projections for herbaceous crops, including switchgrass, energycane, mixed perennial grasses on Conservation Reserve Program land, giant miscanthus and sorghum, as well as the woody feedstocks poplar and shrub willow, are available online in the January issue of GCB Bioenergy. An article on environmental mapping of biomass resources in the continental United States will also be published in that issue.

This partnership came about as a direct result of the efforts of SDSU Vice President Emeritus for Research and Economic Development Kevin Kephart and others in Sun Grant, Owens explained. More than 130 peer-reviewed papers, including field trial results and yield projects related to corn stover, have been published through this project.

The raw data from the field trials will be available for public use and can be accessed at Knowledge Discovery Framework at the U.S. Department of Energy website. “The ramifications of this research will be much greater due to free data access,” he said.

Study duration, collaboration increase value of data, modeling

The duration of this study is unique, Owens pointed out. “Typically these projects last two to three years, but having trials in place for up to seven years is really important in terms of long-term yield potential.” For example, researchers were able to gather data about how potential biofuels crops reacted to the 2012 national drought and how they recovered in subsequent years in some instances. “Though annual crops suffer, perennials can manage through a one-year drought,” Owens explained. “Being able to see this was a tremendous advantage—and something we wouldn’t likely see with only a two-year study.”

Among the herbaceous energy crops, field-scale trials using traditional agricultural equipment were conducted for switchgrass and mixed perennial grasses suitable for use on CRP land, while smaller individual plots were utilized for energycane and giant miscanthus due to a lack of vegetative planting materials for these species.

Crop potential varies by region,” Owens explained. “There’s not one that makes sense everywhere; it’s more of a localized environment.” The nationwide yield potential maps track which crops are best suited to a particular area.

“For example, switchgrass is more productive than miscanthus in some of the northern regions because miscanthus is not as winter hardy. On the other hand, energycane is well adapted and highly productive in the Deep South” he said. In the future, the researchers would like to do side-by-side comparisons of different species across multiple environments to better understand their yield potential.

The model used to estimate yield potential, known as PRISM-ELM, included yield-limiting factors, such as water availability, low-winter and high-summer temperature response, soil pH, salinity, and drainage. Modelers and agronomists from each species group met periodically to exchange information and review yield potential maps.

“This is unique to have input from all the parties involved, which then helps makes the models more reliable,” Owens said. The model for perennial grasses, for instance, had to be adjusted based on the plants’ ability to develop roots deep in the soil profile.

Read the original article: Biofuels Feedstock Study Supports Billion-Ton Estimate

EIA Maintains 2018, 2019 Ethanol Production Forecasts

Ethanol Producer Magazine

February 8, 2018

By Erin Voegele

The U.S. Energy Information Administration has published the February edition of its Short-Term Energy Outlook, maintaining its January forecast that ethanol production will average 1.03 million barrels per day in both 2018 and 2019. This level is consistent with the 1.03 million barrel per day production average realized in 2017.

On a quarterly basis, the EIA currently predicts that ethanol production will average 1.02 million barrels per day during the first quarter of this year, increasing to 1.04 million barrels per day during the second, third and fourth quarters. In 2019, production is expected to fall to 1.02 million barrels per day during the first quarter, increasing to 1.04 million barrels per day for the final three quarters of the year.

The volume of ethanol blended into motor gasoline is expected to reach 960,000 barrels per day this year, up from 950,000 barrels per day in 2017. In 2019, the volume of ethanol blended is expected to increase, reaching 970,000 barrels per day.

The EIA’s most recently weekly ethanol production data shows the U.S. produced 1.057 million barrels per day of ethanol the week ending Feb. 2, up from 1.04 million barrels per day the previous week.

The EIA’s most recent monthly import data shows the U.S. imported 496,000 barrels of ethanol in in November, all from Brazil. During the same month, the U.S. exported 2.648 million barrels of ethanol, primarily to Brazil, Canada, and India.

Read the original article: EIA Maintains 2018, 2019 Ethanol Production Forecasts

New RFA Report Confirms Record Ethanol Exports of 1.37 Billion Gallons in 2017

Renewable Fuels Association

February 7, 2018

By Emily Druckman

Government data released today confirms that U.S. ethanol exports set a new record in 2017, with an astonishing 1.37 billion gallons shipped to more than 60 countries around the world. The 2017 export total was up 17% from 2016 and beat the previous record set in 2011 by some 174 million gallons (mg). In conjunction with today’s data release, the Renewable Fuels Association (RFA) released a detailed summary of 2017 U.S. ethanol export and import statistics.

Brazil was the leading destination for U.S. ethanol exports, receiving 446 mg, or 33% of total shipments. Canada imported 328 mg from the United States, while India took in 173 mg. The Philippines and South Korea rounded out the top five destinations in 2017. Export volumes to nine of the top 10 destinations saw increases over 2016 volumes, with Brazil, India, the Netherlands, Singapore, and United Arab Emirates showing the largest gains. Meanwhile, after serving as the third-leading ethanol export market in 2016, China finished just out of the top 10 in 2017, as exports to that nation plunged nearly 90% in the wake of new tariffs being implemented.

The value of U.S. ethanol exports was $2.4 billion in 2017, up 16% from 2016’s value and the second-highest on record. Undenatured fuel ethanol accounted for 60% of total exports, while denatured fuel ethanol was 36%. Denatured and undenatured ethanol for non-fuel industrial uses made up the remaining 4% of exports.

U.S. ethanol imports remained scarce in 2017, with just 77 mg entering the country. Nearly all of the imported product entered through California ports and was used to meet the state’s Low Carbon Fuel Standard requirements.

Reflecting on the record year, RFA President and CEO Bob Dinneen stated, “Even when facing massive trade policy headwinds in 2017, the U.S. ethanol industry rose to the challenge by delivering record volumes of low-cost, high-octane fuel to the world market. One out of every 11 gallons of ethanol produced in the United States ended up being exported to more than 60 countries, offering a cleaner fuel at a lower price to consumers around the globe. The U.S. ethanol industry is proud of this accomplishment, and looks forward to continuing to grow the global market for ethanol and other renewable fuels. RFA will continue to work with its partners to break down artificial trade barriers, expand export opportunities for U.S. producers, and educate the world’s consumers on the benefits of low-carbon renewable fuels.”

Read the original release: New RFA Report Confirms Record Ethanol Exports of 1.37 Billion Gallons in 2017

Memo : Grassley Analysis Finds RFS Has Minimal Impact On Success Of Refineries

Feb 6, 2018.

Sen. Chuck Grassley

WASHINGTON – Sen. Chuck Grassley of Iowa released the following internal memorandum produced by his energy policy staff who analyzed recent claims made by opponents of the Renewable Fuel Standard (RFS), including Philadelphia Energy Solutions (PES), which attributed its recent bankruptcy filing in part to the RFS. The analysis finds that the biofuels blending requirement and the cost of Renewable Identification Number credits (RINs), a compliance mechanism designed for flexibility, have little to do with the success of refineries and were not significant factors in the PES bankruptcy. The Grassley analysis reached similar conclusions as those of multiple recent studies, including multiple by the University of Pennsylvania’s Kleinman Center for Energy Policy (1, 2, 3, 4). The Grassley staff analysis can be found here.

“I’m concerned any time an American’s job could be lost,” Grassley said. “After I heard that the Renewable Fuel Standard was being blamed for the financial troubles of some refineries, I wanted to know more. So I asked my staff to get to the bottom of the situation. After reviewing the facts, I’m confident that the Renewable Fuel Standard isn’t harming refineries, that other factors are at work, and that the RFS law is working as Congress intended. Once these facts are known, there ought to be an end to the misleading rhetoric blaming the RFS. I’ve always said that I’m for an all-of-the-above national energy strategy. Biofuels are responsible for thousands of jobs across the country. There’s no reason biofuels and other renewables can’t exist alongside conventional fuels. I’m thankful President Trump continues to support biofuels and rural America. The President should be applauded for his ongoing commitment to the RFS, which makes our air cleaner, energy cheaper and country stronger with more domestic energy production.”

The Grassley staff analysis found that, “The publicly available evidence points to the fact that PES finds itself in financial difficulty due primarily to changes in its available feedstocks and other management decisions. It does face a problem of having to acquire RINs to meet the looming RFS compliance deadline, but that is due in large measure to its reported decision last fall to sell off the RINs it had acquired, presumably in hopes of being able to buy them back at lower cost before the compliance deadline. Moreover, if PES had taken the sensible approach of other merchant refiners and invested in ethanol blending infrastructure or partnered with a blender, it appears it would have no need to purchase RINs at all.”

Grassley has said that it’s worth exploring ways to lower RIN prices without undermining the integrity of the RFS. Grassley has suggested making E15 available year-round and that EPA could do more to provide transparency to the RIN market.

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