In the News
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
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
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
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.
February 5, 2018
Press Release
Novozymes today revealed its new yeast platform for starch-based ethanol, while also introducing the first product, Innova Drive. A completely new yeast strain, the product can reduce fermentation time by up to two hours compared to current yeasts.
The new yeast is also tougher, continuing to ferment in adverse conditions such as higher organic acids and temperatures. This stress resistance increases ethanol output and reduces operational costs.
“The first product from our yeast platform, Innova Drive is a completely new ride for the ethanol industry. It puts plant operators in the driver’s seat to run fermentations the way they need to,” says Brian Brazeau, Novozymes’ Vice President for Biofuels Commercial. “Yeast is a major bottleneck that requires constant care and attention. Innova Drive is a response to the needs of the ethanol industry, and resets expectations for how tough a yeast can be.”
Recent surveys show that more than half of all ethanol plants face operational upsets, many related to yeast. High heat, infections, organic acids, and throughput limitations are stressors that plague current yeasts, requiring plant personnel to increase antibiotics, reduce inputs such as corn solids, and add more yeast – all contributing to process complexity. This leads to a double-impact of increased costs and lost revenue.
Leveraging unique synergies
Novozymes has used its expertise in enzymes to develop a perfectly matched yeast that delivers higher ethanol yields and reliable performance. The result is a game-changing solution for the industry that sets a new standard for fermentation performance.
During fermentation, Innova Drive produces a novel, higher-performing glucoamylase enzyme. The enzyme is twice as effective as glucoamylases produced by other yeast products in converting sugar into ethanol. And, when ethanol producers pair a specially designed, complementary Novozymes fermentation enzyme with Drive, the combined performance allows producers to maximize ethanol conversion and starch conversion efficiency.
“We are leveraging the synergies of our best-in-class enzymes and new yeast. The enzymes expressed by the yeast, in combination with carefully tailored companion enzyme products, give you a cocktail of enzyme activities that will feed the yeast in an optimal manner throughout fermentation,” says Brazeau. “For an ethanol producer, this means increased efficiency in starch conversion, greater starch conversion, lower residual starch – and, at the end of the day, more ethanol.”
Innova yeast platform
Yeast strains used in the starch-based ethanol industry have remained largely unchanged for decades. The Innova platform uses a completely new yeast strain not seen before in the ethanol industry and brings novel characteristics, which ethanol producers are asking for. Novozymes can further build upon and tailor these characteristics to meet the specific needs of an ethanol producer.
Innova Drive is Novozymes’ first yeast product, with more to come. The company continues to focus on developing integrated solutions to help ethanol producers improve plant performance with dedicated support and technical service.
Why is yeast vital for ethanol production?
Yeast converts raw materials into ethanol. Corn goes into the plant and is broken down by enzymes to prepare it for fermentation. During fermentation, yeast is added. The yeast consumes the raw materials and releases ethanol and carbon dioxide. Ethanol producers spend a lot of time and energy ensuring that the right conditions exist for yeast to thrive. The stronger and more efficient the yeast, the better able it is to tolerate production stresses and generate ethanol – improving productivity and profitability.
Innova Drive: Key numbers
Innova Drive allows ethanol producers to operate their plants at higher temperatures year-round, to achieve higher production levels. Using a yeast bred to power through heat excursions up to 98°F/~37°C, operators can diminish plant downtime, increase efficiency and output in any season, and potentially decrease cooling costs.
Innova Drive is tolerant to high organic acids, and fermentations will finish even when acid levels rise as high as 0.6 percent. This significantly reduces the risk of process upsets and ethanol loss due to lost fermenters – enabling operators to power through infection events.
Innova Drive excels with high dry solids – up to 37 percent – with proven resistance to high ethanol levels and during periods of temperature stress.
Ultimately, Innova Drive’s improved stress tolerance leads to more consistent fermentations and more ethanol being produced.
Read the original release: Novozymes Adds Yeast to Bioenergy Business
January 30, 2018
By Tim Albrecht
Cargill recently announced plans to expand its portfolio at its starches and sweeteners plant in Krefeld, Germany, with advanced biofuels, vegetable wheat protein and industrial wheat starches. The expansion to a wheat processing facility allows Cargill to help customers address changing consumer needs involving nutrition, packaging and sustainable fuel.
The transformation, expected to be completed by 2020, is a part of Cargill’s long-term strategy to broaden its product portfolio and address evolving consumer needs. “Diversifying Krefeld's product portfolio will allow Cargill to address changing market trends like the increasing demand for vegetable proteins driven by a growing world population and the rising need for industrial starches used in packaging paper,” says Alain Dufait, Cargill Starches & Sweeteners Europe Managing Director. “This will enable us as well to explore the opportunity to manufacture advanced ethanol, produced from low-value streams.
“In order to diversify the portfolio, we will need to transform our Krefeld site from a corn processing facility to a wheat processing facility. We believe such a transformation will help to improve Cargill Starches & Sweeteners Europe's competitiveness, position the business for future growth and allow it to sustain its market leadership.”
European institutions are defining the future legislative framework post-2020 of the renewable energy market across the country. Cargill is looking to stay ahead of the trend and provide ethanol for Europe’s evolving market, says Dufait. “In particular, regarding the decarbonization of the transport sector, there is an overall support of the deployment of advanced biofuels, waste-based fuels and renewable electricity. In this context, Cargill is exploring the opportunity to manufacture and offer our customers advanced biofuels produced from low-value streams.”
Cargill Starches & Sweeteners Europe processes corn and wheat to manufacture a comprehensive collection of value-added products dedicated to the food and beverage, papermaking, corrugating, BioIndustrial, pharmaceutical, personal care and animal nutrition industries.
Read the original story: Cargill to Produce Ethanol at Germany Plant
January 24, 2018
By U.S. Grains Council
Considerable concern surrounded the export potential for U.S. distillers dried grains with solubles (DDGS) following an adverse trade policy decision by Vietnam, a historic top buyer, in December 2016. Instead, other countries in the region increased DDGS purchasing, the Vietnamese market re-opened and the region set a new record at 2.3 million metric tons in DDGS imports in 2016/2017.
“Offsetting the decline in sales to Vietnam, the market for U.S. DDGS in Southeast Asia diversified significantly,” said Manuel Sanchez, U.S. Grains Council regional director for Southeast Asia. “We lost the largest DDGS market in the region for eight months and still reached a record import volume overall.”
Following the detection of quarantine pests, the Vietnamese Plant Protection Department issued a decision in October 2016 to temporarily suspend DDGS importation. As a result, Vietnam purchased 50 percent less U.S. DDGS in 2016/2017 at nearly 495,000 tons, compared to almost 986,000 tons the year prior.
The Vietnamese government lifted its suspension of U.S. DDGS imports in September 2017, following an intense effort by the council, the USDA’s Animal and Plant Health Inspection Service and the Office of the U.S. Trade Representative. Thus far in the 2017/2018 marketing year (September-November 2017), Vietnam has purchased more than 213,000 tons of U.S. DDGS, a steady uptick in the market.
Elsewhere in the region, the council continued to expand DDGS sales by providing technical expertise and support as well as connecting grain buyers and end-users with U.S. suppliers. Programs in Vietnam are targeting aquaculture and swine programs whereas activities in Indonesia and Malaysia focus on boiler and layer sectors. In the Philippines, the council is providing information on storing and handling.
This work throughout the region is helping end-users determine how best to incorporate U.S. DDGS into their rations. Combined with one of the lowest per unit of protein cost compared to other feed ingredients in the market, the council saw notable increases in demand for U.S. DDGS from buyers in Southeast Asia in 2016/2017.
“We saw notable year-over-year growth in both Thailand and Indonesia,” said Sanchez. “New buyers like New Zealand, Cambodia and Myanmar also made a big splash this past marketing year.”
Thailand was the fourth largest buyer of U.S. DDGS in 2016/2017, purchasing 791,000 tons. Already in the new marketing year, Thailand has purchased more than 206,000 tons, bolstered by the council’s trade servicing and technical assistance to the country’s feed manufacturers for swine, broilers and layers sectors, among the largest in the world.
“Thailand’s growth can be directly attributed to the council’s programs in country,” Sanchez said. Indonesia has also steadily increased imports of U.S. DDGS over the three marketing years, importing about 512,000 tons in 2016/2017. Indonesia has already purchased more than 251,000 tons of U.S. DDGS in 2017/2018.
Smaller buyers are also substantially increasing their purchases of U.S. DDGS. New Zealand more than quadrupled purchases of U.S. DDGS with 151,000 tons in 2016/2017, compared to 32,600 tons the previous marketing year. New Zealand has already purchased 50,000 tons of U.S. DDGS in 2017/2018.
“Market potential for DDGS exports to the region remains optimistic in 2017/2018,” Sanchez said. “We expect demand for U.S. DDGS strengthen as industries in these countries continue to grow and incorporate more co-products into their rations.”
Learn more about the Council’s work in Southeast Asia here.
Read the original article: USGC: DDGS Exports Set New Record to Southeast Asia
January 29, 2018
By Bob Dineen
Philadelphia Energy Solutions (PES) filed for bankruptcy last week, pointing fingers and laying blame squarely on the Renewable Fuel Standard (RFS), a federal program that requires refiners to blend increasing amounts of ethanol and other biofuels. That may make for a provocative headline, but the public and PES’ 1,100 employees deserve to know the truth: PES has no one else to blame but itself.
PES operates one of the nation’s oldest refineries, which is handicapped by hopelessly antiquated technology. This is not the first time the refinery has found itself in a precarious financial position.
In 2012, the Carlyle Group and Sunoco rescued the refinery from bankruptcy, thanks to a taxpayer-funded rescue package. The following year, PES invested in new infrastructure to allow the importation of cheap oil from North Dakota. While PES was able to capitalize on that investment in 2014 and 2015, the collapse in oil prices and the end of the U.S. crude export ban in late 2015 hit the refiner hard and left it hostage to the higher-priced Brent crude index. Since that time, PES has been dealing with a substantial debt burden.
The RFS, which helps to provide consumer choice at the pump, assures refiners flexibility by offering credits, called Renewable Identification Numbers (RIN), to aid in compliance with the program. Wall Street analysts, academic researchers, EPA officials, and even some other oil refiners have said repeatedly that RINs don’t negatively affect refining margins. Like other refiners, PES could have eliminated its RINs-related costs by making investments in blending more renewable fuels. Instead, PES is blaming RINS for its financial woes. Last week, PES CEO Greg Gatta told Bloomberg, “Absent RINs, we’re competitive with anyone in the world.” If that were true, why is PES seeking unilateral amnesty from an obligation that impacts every refiner equally?
PES is really seeking a unique and unnecessary subsidy. The company says it will ignore its RFS obligation, while at the same time acknowledging it will sell the RIN credits it has accumulated. PES wants their cake and to sell it too!
The RFS, which began in 2005, is helping to break the oil industry’s near-monopoly at the pump, while cleaning the air, providing greater energy independence, boosting local economies and lowering consumer prices at the pump. PES’ actions are an insult to those in the industry that have complied with this very successful and important policy, as well as to consumers across the country who are demanding greater access to U.S.-produced, cleaner, cheaper renewable fuels. PES needs to stop obfuscating and take responsibility for the unfortunate mess it finds itself in today.
Read the original article: Philadelphia Energy Solutions Wrong to Blame Renewable Fuel Standard for Bankruptcy
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January 23, 2018
By U.S. Grains Council
The government of Algeria has lifted a value-added tax (VAT) on U.S. distillers dried grains with solubles (DDGS) and corn gluten feed (CGF) for 2018, affording new opportunities this marketing year.
"The U.S. Grains Council (USGC) has been demonstrating the clear advantages of using DDGS and CGF in feed rations through activities in Algeria,” said Ramy Hadj Taieb, USGC regional director for the Middle East and North Africa. “This success was made possible thanks to efforts deployed by the council and our various partners in Algeria.”
Algeria is the second largest corn market in North Africa, second only to Egypt. The poultry and dairy sectors are growing industries where U.S. coproducts fit well into rations. However, a complex environment and government influence on the economy complicates market development efforts.
For the last two years, the Algerian government has imposed regulations and made decisions to restrict imports in order to offset the persistent drop in international oil and gas prices. That included a 17 percent VAT on both U.S. DDGS and CGF. Combined with existing import duties of 30 percent, imports of these products were simply uncompetitive with other feed ingredients.
However, thanks to work by the council and partners in country to push for a reduction in tariffs, the Algerian government released a list of feed ingredients benefiting from an exoneration of a value-added tax until Dec. 31, 2018. The list notably includes corn, barley, DDGS and CGF, a particular success in this economical context.
“The difference of cumulated import and value-added tax tariffs has considerably narrowed, especially when compared to competing feed ingredients,” Taieb said. “This situation offers new and interesting import perspectives for U.S. co-products in Algeria as the council continues to promote the value of U.S. DDGS and CGF in improving feed conversion rates.”
While the exemption from the value-added tax is a success, U.S. DDGS and CGF are still subject to import duties of 30 percent, compared to 5 percent for both corn and soybean meal. As a result, the council will continue efforts to bring these import duties in line with other feed ingredients as well as to demonstrate the value of utilizing U.S. DDGS and CGF in poultry and dairy feed rations to Algerian producers.
Learn more about the council’s work in North Africa here.
Read the original article: Algeria Removes Value-Added Tax on US DDGS, Corn Gluten Feed
January 19, 2018
By Bliss Baker
In the years since the international community began taking the human contribution to global climate change seriously, the ethanol industry has experienced several ups and downs. National mandates created markets that enabled the development of domestic biofuel industries in a number of countries, but these government commitments wavered when oil prices dropped to historic lows after the 2008 economic collapse.
Encouragingly, despite an extended period of uncertainty and less-than-ideal market circumstances, free trade has enabled global biofuel production to continue its incremental growth year after year. This resilience has been supported by real-world data becoming available to replace unreliable projections, illustrating the lifecycle greenhouse gas (GHG) benefits of ethanol use compared to conventional fossil fuels in transport.
There are clear signs that a growing number of countries are recognizing biofuels not just for their GHG emission and economic benefits, but also for their contribution to improved air quality in high-density urban centers and their ability to reduce reliance on crude imports.
Most significant for the global biofuels industry are the recent signals from the governments of India and China—two of the world’s largest economies and auto markets—of their intention to significantly scale up the use of biofuels in their countries’ transport sectors. These signals are particularly noteworthy because they focused on the economic opportunities biofuels production presents for farmers, as well as ethanol’s ability to reduce harmful particulate matter emissions from transportation fuels.
At the 2015 U.N. Climate Conference (COP21) where the historic Paris Agreement was signed, dozens of countries highlighted policies promoting or mandating the use of biofuels for domestic transport in their Nationally Determined Contribution plans.
It has been encouraging to see an increasing number of countries introducing or enhancing biofuel mandates for transport fuels in their revised plans submitted at COP23 in November.
At that conference, parties to the 2015 Paris Agreement established terms for full implementation of the agreement, including their NDCs. This sets the stage for the development of clear policy commitments in the next year, specifically designed to achieve national emission-reduction targets in the short and near term.
These efforts will have to consider the additional challenges presented by the fact that in the time since the 2015 commitments were made, multiple nongovernmental organizations have reported that governments will have to increase the ambitiousness of the NDC plans submitted in 2015 if the global community is to achieve the targets laid out in the Paris Agreement.
This was recognized by 19 countries at COP23, including Brazil, China and India, who complemented their overall NDC plans by committing to development of biofuels targets and an action plan to achieve them.
This agreement is significant for the countries participating and the potential for trade, but also because the decisions included in the declaration were informed by modeling from the International Energy Agency and the International Renewable Energy Agency, which concluded that the temperature goals adopted in the Paris Agreement cannot be reached without a major increase in the production and use of sustainable biofuels.
Because structural economic and infrastructure reforms require a significant amount of planning and budgeting, governments have a limited number of policy pathways to choose from if they are to achieve short-term emission reductions.
Ethanol’s value as a cost-competitive and immediately dispatchable alternative to fossil fuels, using existing transport fuel infrastructure and auto fleets, represents a unique policy solution to the challenges faced by governments.
Establishing domestic biofuel industries takes time, but a focus on free trade will enable countries to satisfy their demand for biofuels as they develop their capacity.
The Global Renewable Fuels Alliance looks forward to working with countries as they increasingly turn to biofuels to support their efforts to cut GHG emissions, and to facilitate longer-term transitions to a low carbon future.
Read the original article: More Countries Adopting Ethanol Policies
January 22, 2018
By Erin Voegele
The U.S. EPA has released renewable identification number (RIN) data for December, reporting that nearly 1.68 billion RINs were generated during the month, including more than 27.08 million cellulosic RINs. For the full year 2017, a net total of 19.29 billion RINs were generated.
Approximately 26.76 million D3 cellulosic biofuel RINs were generated in December, bringing the net total for 2017 to 227.38 million. Approximately 10.05 million D3 RINs were generated for ethanol, with 141.24 million generated for renewable compressed natural gas and 76.14 million generated for renewable liquefied natural gas. More than 139.78 million D3 RINs were generated domestically, with 33.65 million generated by importers.
According to the EPA, 327,467 D7 cellulosic diesel RINs were generated in December, bringing the net total for 2017 to nearly 1.67 million. Approximately 1.74 million D7 RINs were generated for cellulosic heating oil, with 459 generated for cellulosic diesel. According to the EPA, 459 RINs were generated domestically, with 1.74 million generated by importers.
Nearly 6.85 million D5 advanced biofuel RINs were generated in December, bringing the net total for last year to 143.35 million. More than 99.34 million D5 RINs were generated for ethanol, with 31.53 million generated for naptha, 1.96 million generated for heating oil, 8.75 million generated for nonester renewable diesel, and 1.87 million generated for renewable compressed natural gas. Nearly 69.56 million D5 RINs were generated domestically, with 73.89 million generated by importers.
Nearly 1.28 billion D6 renewable fuel RINs were generated in December, bringing the net total for 2017 to nearly 15.09 billion. Most, 14.86 billion, were generated for ethanol, with 244.98 million generated for nonester renewable diesel. Nearly 14.85 billion D6 RINs were generated domestically, with 11.32 million generated by importers and 244.98 million generated by foreign entities.
More than 363.58 million D4 biomass-based diesel RINs were generated in December, bringing the net total for last year to 3.83 billion. The majority, 3.07 billion, were generated for biodiesel, with 770.39 million generated for nonester renewable diesel and 2.74 million generated for renewable jet fuel. More than 2.81 billion D4 RINs were generated domestically, with 694.13 million generated by importers and 39.18 million generated by foreign entities.
As of the close of 2017, the EPA estimates a total of 19.55 billion RINs were generated last year, with 716.61 million retired, 594.1 million locked and available and 18.24 billion unlocked and available.
Read the original article: EPA: Nearly 230 Million Cellulosic RINs Generated in 2017
January 16, 2018
A new multi-institution report provides practical agronomic data for five cellulosic feedstocks, which could improve adoption and increase production across the country.
According to a recent ruling by the United States Environmental Protection Agency, 288 million gallons of cellulosic biofuel must be blended into the U.S. gasoline supply in 2018. Although this figure is down slightly from last year, the industry is still growing at a modest pace. However, until now, producers have had to rely on incomplete information and unrealistic, small-scale studies in guiding their decisions about which feedstocks to grow, and where. A new multi-institution report provides practical agronomic data for five cellulosic feedstocks, which could improve adoption and increase production across the country.
“Early yield estimates were based on data from small research plots, but they weren’t realistic. Our main goal with this project was to determine whether these species could be viable crops when grown on the farm scale,” says D.K. Lee, associate professor in the Department of Crop Sciences at the University of Illinois and leader of the prairie mixture portion of the study.
The project, backed by the U.S. Department of Energy and the Sun Grant Initiative, began in 2008 and includes researchers from 26 institutions. Together, they evaluated the bioenergy potential of switchgrass, Miscanthus, sorghum, energycane, and prairie mixtures in long-term trials spanning a wide geographical area. Due to shortages in plant materials, Miscanthus and energycane were grown on smaller plots than the other crops, but researchers say the new results are still valuable for producers.
“Although making real-world decisions and recommendations based on performance data from small plots is less desirable than from field-scale plots, we feel comfortable with the Miscanthus results since they were based on 33 data sets collected from five sites over seven years,” says Tom Voigt, professor in the crop sciences department at U of I and leader of the Miscanthus portion of the study.
Crops were grown for five to seven years in multiple locations and with varying levels of nitrogen fertilizer. Although most of the crops are known to tolerate poor soil quality, the researchers found that they all benefitted from at least some nitrogen. For example, Miscanthus did best with an application of 53.5 pounds per acre.
“When we didn’t fertilize with any nitrogen, yields dropped over time. But if we used too much, 107 pounds per acre, we were increasing nitrous oxide emissions and nitrate leaching,” says Voigt. “There is some need for fertilization, but it should be tailored to specific locations.”
Prairie mixtures, which were grown on land enrolled in the Conservation Reserve Program (CRP), also benefitted from added nitrogen. Yield kept increasing with the addition of up to 100 pounds per acre, but Lee says producers would have to weigh the yield benefit against the cost of the fertilizer.
“Even though it increased yield, it is economically not profitable to use more than 50 pounds of nitrogen per acre.”
And although most of the crops are somewhat drought-tolerant, precipitation made a difference.
“Miscanthus production was directly related to precipitation,” Voigt says. “In areas where precipitation was down, yields generally dropped. However, it did depend on timing. If there was a good amount of water in the winter, plants could get going pretty well in the spring. But if we had little rainfall after that, that hurt yields.”
Lee says prairie mixtures, which are normally made up of hardy grasses, suffered from the severe droughts in 2012 and 2013 in some locations. “In one year in our Oklahoma location, they didn’t even try to harvest. Yield was too low.”
No one feedstock “won” across the board. “It depends so much on location, nitrogen application rate, and year variability,” Voigt says. Instead of highlighting specific yields obtained in good years or locations, a group of statisticians within the research team used field-based yield and environmental data to create maps of yield potential for the five crops across the U.S. Dark green swaths on the maps represent areas of highest yield potential, between 8 and 10 tons per acre per year.
According to the new results, the greatest yield potentials for lowland switchgrass varieties are in the lower Mississippi valley and the Gulf coast states, whereas Miscanthus and prairie mixture yields are likely to be greatest in the upper Midwest.
Lee says the prairie mixtures, which are typically grown on CRP land to conserve soil, didn’t live up to their potential in the study. “We know that there are higher-yielding switchgrass varieties today than were included in the CRP mixtures in the study. If we really want to use CRP for biomass production, we need to plant highly productive species. That will bump yield up a lot higher.
“One of the biggest concerns now is that CRP enrollment is shrinking. When we started, we had 36 million acres nationwide. Now we’re down to 26 million. Farmers feel they could make more money by using that land for row crops. We need to find some solution if we want to save the soil. Biomass could provide revenue for farmers, if they were allowed to harvest it,” Lee says.
Energycane could reach very high yields, but in a relatively limited portion of the country. However, the crop that shows the highest potential yields in the greatest number of locations is sorghum. The annual crop is highly adaptable to various conditions and might be easier for farmers to work with.
“It fits well in the traditional annual row-crop system; better than perennial crops. It may not be environmentally as desirable as perennial crops, but people could borrow money in winter to buy seed and supplies, then plant, and sell in the fall to pay back their loans. It’s the annual cycle that corn and beans are in,” Voigt says.
Lee adds, “In terms of management, sorghum is almost the same as corn. It germinates and grows so quickly, weed control is not a big issue. If you plant by early June, it will be 15-20 feet tall by September. It also has good drought tolerance.”
Downsides to the biomass champ? It’s wet at harvest and can’t be stored. It also requires nitrogen and can lodge, or collapse, prior to harvest in wet or windy conditions. “Still, it’s a really spectacular plant,” Voigt says.
The researchers made all the raw data from the study available online for anyone to access. Lee says it can be useful for everyone: scientists, policymakers, and producers. “It should be helpful for number of different stakeholders,” he says.
The article, “Biomass production of herbaceous energy crops in the United States: Field trial results and yield potential maps from the multiyear regional feedstock partnership,” is published in a special issue of GCB Bioenergy. The project was funded through the U.S. Department of Energy [award number DE-FC36-05GO85041] and the North Central Regional Sun Grant Center at South Dakota State University.
Read the original article: New Study Shows Producers Where and How to Grow Cellulosic Biofuel Crops
Jan 11, 2018
The Bolivian government announced its intention to establish an ethanol blend mandate during a December seminar conducted by the U.S. Grains Council (USGC).
Bolivian Vice President Garcia Linera made the announcement during closing remarks at the event, reporting the government’s decision to implement an ethanol blend mandate starting at 10 percent in 2018 with goals of mid-level blends in coming years.
Bolivia did not previously have an ethanol blending mandate, though the country has seven sugarcane milling facilities already producing ethanol domestically. Linera emphasized the mandate would help increase domestic gross domestic product (GDP) in Bolivia by supporting local industry, while maintaining a role for trade to help consistently meet the E10 blend level.
“The Bolivian announcement is an exciting development for ethanol policy in the Americas,” said Mike Dwyer, USGC chief economist. “This success of the Council’s work to promote biofuels policies with a role for trade is directly attributable to the efforts to increase knowledge sharing and collaboration like at the Ethanol Summit of the Americas last fall.”
Linera’s comments followed a seminar organized by the Council to provide information on the economic and environmental benefits of biofuels. In addition to Dwyer, speakers from Mexico, Paraguay and Argentina provided information on the movement towards using ethanol and discussed the main constraints to developing biofuels policies in their respective countries.
“The seminar helped start the discussion between the public and the private sector in Bolivia for establishing an ethanol mandate,” Dwyer said. “Additionally, we offered knowledge and expertise from the U.S. perspective in growing an ethanol industry to help make it happen.”
During the same mission, the Council traveled to Ecuador to continue a similar dialogue on biofuels. Ecuador does have an E5 mandate in place, but a reliance on sugarcane to produce ethanol results in difficulty guaranteeing the blend rate during heavy rainy seasons that disrupt local production.
In contrast, an ethanol mandate with a role for trade would support the Ecuadorian domestic industry while ensuring the blending rate is met throughout the year, no matter the local weather disruptions. The blend mandate also contributes to Ecuador’s commitments under the Paris climate agreement to implement effective strategies to reduce greenhouse gas emissions.
“The Council expects this open dialogue between the private sector and government officials to result in future cooperative efforts to increase ethanol consumption,” Dwyer said. “The Council helped this effort by providing firsthand information about ethanol’s environmental benefits and market opportunities for the local industry in Ecuador.”
The Council arranged the meetings in Ecuador and Bolivia as a direct follow-up to the Ethanol Summit of the Americas in October 2017, after which representatives from both countries expressed additional interest in developing ethanol policies and requested further discussions. The Council plans to continue this dialogue and encourage the generation of biofuels policies throughout the world.
“U.S. ethanol has a competitive advantage in Latin America driven by cost of production, efficiencies and reduced transportation costs,” Dwyer said. “We aim to expand the use of ethanol in the region - including in Bolivia and Ecuador - through continuing to facilitate discussions on establishing pathways for its use.”
Learn more about the Council’s work to promote biofuels policies with a role for trade here.
January 16, 2018
By Jake Spring, Mateus Maia
Brazil is studying the removal of a 20-percent tariff on ethanol imports from the United States, Agriculture Minister Blairo Maggi said on Wednesday, in a decision that could depend on Washington lifting a ban on fresh beef exports from Brazil.
Last year, Brazil imposed a 20-percent tax on ethanol imported from the U.S. that exceeds a 600 million liter annual quota to protect local producers as imports spiked.
Also in 2017, the U.S. banned shipments of fresh beef from Brazil following on a food safety scandal involving bribes paid to inspectors that led to heightened inspections by the U.S. and in turn uncovered potential health risks.
Speaking to reporters on Tuesday, Maggi implied that a decision on removing the ethanol import tariff could depend on resolving the dispute on beef exports.
“There is on the part of the United States a big demand to withdraw this (ethanol tariff) and we also have this problem with beef,” Maggi said. “Obviously one thing influences and contaminates the other.”
The ban on fresh beef exports could be lifted by April, Maggi said, when he is expected to step down in order to meet a deadline to run for elected office in October.
Brazil has already submitted all of the material requested by the United States to address concerns over beef exports and is awaiting for the United States to decide whether the issue is resolved, he said.
Read the original article: Brazil Considers Lifting Tariff on U.S. Ethanol
Environmental and Energy Study Institute
January 12, 2018
By Jessie Stolark
EPA administrator Scott Pruitt opened up the year by announcing his three regulatory priorities for 2018; rewrite the Clean Power Plan, rewrite the Waters of the United States and overhaul the Renewable Fuel Standard. Within the RFS, one can only take his comments to mean specifically – overhaul the RINs marketplace. Renewable identification numbers (RINs) are the tradable credits attached to every gallon of renewable fuel and used as a compliance mechanism for the Renewable Fuel Standard (RFS). They have been the oil refining industry’s favorite punching bag for quite some time.
The argument is roughly – increased biofuels mandates lead RINs to spike in cost, translating to billions in compliance costs, particularly for small refiners. While somewhat logical, as higher RINs costs have to be absorbed somewhere, this logic has not borne out. According to multiple economic studies, refiners recoup the higher RIN cost through what refiners call the ‘crack spread’ or the difference in price between the unrefined petroleum and the refinery products, such as gasoline, diesel, jet fuel and heating oil. When the RIN price increases, the crack spread increases, and when they fall, the crack spread decreases.
While President Trump has been largely unwavering in his support for the domestic biofuels industry, the administration often finds itself at odds with two industries it purports to support -- oil and biofuels. The issue reached a fever pitch early in the Trump administration, with former White House special advisor Carl Icahn supporting changes to who was required to comply with the RFS. Icahn is a major shareholder in the merchant refinery CVR Energy and is currently under federal investigation for his unusual role in the administration.
More recently, Senator Ted Cruz (R-TX) has led efforts to seek ‘regulatory relief’ for refiners from RINs. Cruz has been the latest standard bearer for the argument that the credits are costing refiners millions of dollars and put the sector at risk of major jobs cuts.
After putting a hold on the confirmation of Bill Northey, the Iowa Secretary of Agriculture, for the position of Undersecretary for Farm Production and Conservation at USDA, Cruz was able to garner several meetings at the White House to broker a supposed deal with corn-state leaders late last year. Last month, Cruz also floated a proposal to cap RIN prices at 10 cents, a non-starter with the biofuels industry.
Agricultural economists with FarmDoc, at the University of Illinois, independently assessed the 10 cent cap to RINs proposal, concluding that it would be a defacto 10 percent blending cap and “would reverse the technology-forcing intent of the statutory mandate.” They also questioned the legality of such a change, without further Congressional intervention to change the statute.
Indeed, RIN prices drop when more biofuels are blended into the fuel supply, making producing and blending renewable fuels more attractive. In this sense, RINs have worked exactly as designed.
Over the past several years, it’s practically become conventional wisdom that the RINs market is “broken” and causing significant hardship to the refining industry, particularly small merchant refiners that don’t have the capacity to blend biofuels without investing in blending technology.
However, at least one merchant refiner has publicly admitted that there is no evidence of economic harm from RINs, with merchant refiner Tesoro stating, “RIN costs are passed through at the bulk finished product sales points and provide refiners with coverage of their exposure to them.”
Even labor unions have begun to question the logic, with Ryan O’Callaghan of the United Steelworkers Local 10-1, representing workers at the PES Refinery in Philadelphia, PA stating, “We have information that the RINs might not be impacting [the refiner] as stated.”
Instead, the blame for sometimes low refining margins and cyclical petroleum markets is more complex, according to groups such as the Renewable Fuels Associate. In the Northeast, for example, expensive crude oil from Western Africa and the Northern Sea regions, falling Bakken supplies, and old infrastructure are all issues at play, not RINs.
As to the compromise that lawmakers want to see from the biofuels and refining industry, RFA CEO Bob Dineen recently noted that there is little consensus among the oil industry, stating, “So, what problem are we really trying to solve? Whose problems are we trying to solve? And how many bites of the apple are they going to get?”
Read the original article: RFS Roundup: Economists Largely Agree RINs Not Wreaking Havoc on Refining Industry
January 12, 2018
By Erin Voegele
The USDA has released its World Agricultural Supply and Demand Estimates report for January, reporting larger corn production, increased food, seed and industrial use, lower estimates for feed and residual use, and reporting greater stocks.
Corn production is currently estimated at 14.604 billion bushels, up 26 million bushels when compared to the December WASDE. The increase is attributed to an increase in yield, which reached a record 176.6 bushels per acre. The increase was was partially offset by a 400,000 acre reduction in harvested area. Among the major producing states, yields are estimated to be record high in Illinois, Minnesota and Ohio.
The estimate for food, seed and industrial use is raised 10 million bushels, reflecting an estimated amount of corn used for glucose and dextrose during September-November that was above expectations. For ethanol and byproducts, projected corn use is unchanged at 5.525 billion bushels. Feed and residual use is down 25 million bushels, falling to 5.55 billion based on indicated disappearance during September-November as reflected by the Dec. 1 stocks.
Corn stocks are up 40 million bushels when compared to December. The season-average corn price received by producers is projected at $3.25 per bushel, up 5 cents at the midpoint based on observed prices to date.
Foreign corn production is forecast lower, with reductions for Russia, Vietnam and the Philippines more than offsetting an increase for Pakistan. Russia’s corn production is down based on harvest results to date. Vietnam corn production is reduced as the impact of heavy rain during the growing season in the northern production areas was worse than previously expected.
Lower 2017-’18 corn exports are expected for Russia, partially offset by an increase for Thailand. Brazil’s 2016-’17 corn exports are reduced based on observed shipments to date for the local marketing year, which started in March. Imports for 2017-18 are lowered for Iran, but increased for Vietnam and Philippines. Foreign corn ending stocks are higher than last month, mostly reflecting increases for Brazil and Pakistan. Global corn stocks are at 206.6 million, up 2.5 million from last month.
Read the original article: USDA Raises Estimate for Corn Production in January WASDE