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

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

Novozymes

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

Ethanol Producer Magazine

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

Ethanol Producer Magazine

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

The Hill

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

Ethanol Producer Magazine

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

There’s no shortage of food in the world because of biofuel production, a new report says.