In the News
Brownfield Ag News for America
Mar 3, 2020
Ag Secretary Sonny Perdue spoke with reporters Monday at the National Farmers Union meeting in Savannah, Georgia.
At last week’s Commodity Classic, Ag Secretary Sonny Perdue said he believes small refinery exemptions (SREs) will be reduced in response to a recent Tenth Circuit Court ruling that EPA overstepped its SRE granting authority.
But what if EPA decides to appeal the court’s decision? Speaking with reporters at the National Farmers Union annual meeting in Savannah, Georgia, Perdue said that appears doubtful.
“Our legal counsel indicates that he does not think it would be wise to appeal that decision. He thinks it’s pretty solid,” Perdue said.
If EPA doesn’t appeal, the next question is whether the agency will apply the ruling nationwide or confine it to the area covered by the Tenth Circuit, which includes the six states of Oklahoma, Kansas, New Mexico, Colorado, Wyoming, and Utah.
Perdue thinks it should be applied nationwide.
“We think it’s probably applicable nationwide when look at the principle of small refinery waivers—that the decision should go nationwide.”
Perdue made those comments Monday during a news conference at the NFU annual meeting.
Read the original story here.
(Washington, D.C., February 28, 2020) – U.S. Secretary of Agriculture Sonny Perdue issued a memo today directing the U.S. Department of Agriculture (USDA) to acquire alternative fueled vehicles (AFV) when replacing conventionally fueled vehicles. USDA owns and operates one of the largest civilian fleets in the Federal Government and this move to a fleet that can use E85 or biodiesel will increase efficiencies and performance. Additionally, as part of the President Donald J. Trump’s October agreement to seek opportunities to facilitate the availability of higher biofuel blends across the country, USDA will make $100 million in grants available this year for the newly created Higher Blends Infrastructure Incentive Program (HBIIP). Through this program, transportation fueling and biodiesel distribution facilities will be able to apply for grants to help install, retrofit, and/or upgrade fuel storage, dispenser pumps, related equipment and infrastructure to be able to sell ethanol and biodiesel. The Department plans to publish application deadlines and other program information in the Federal Register this spring.
“Both of these actions underscore USDA is putting our money where our mouth is when it comes to increased biofuels usage. Expanding nationwide infrastructure that offers biofuels and increasing the number of biofuel capable vehicles in our fleet will increase the use of environmentally friendly fuel with decreased emissions, driving demand for our farmers and improving the air we breathe,” Secretary Perdue said. “President Trump is fighting for our corn and soybean growers and biofuel producers by finalizing year-round E15, ensuring that more than 15 billion gallons of ethanol and 2.43 billion gallons of biodiesel enters the market in 2020, and opening up new markets abroad. USDA will continue to do its part to encourage the use of homegrown energy.”
Background on Higher Blends Infrastructure Incentive Program (HBIIP):
HBIIP will consist of up to $100 million in funding for competitive grants or sales incentives to eligible entities for activities designed to expand the sales and use of ethanol and biodiesel fuels. Funds will be made directly available to assist transportation fueling and biodiesel distribution facilities with converting to higher ethanol and biodiesel blends by sharing the costs related to and/or offering sales incentives for the installation of fuel pumps, related equipment, and infrastructure. Cost-share grants and/or incentives will be made available for higher fuel ethanol/biodiesel blends such as “E15” and “B20” (or higher), at vehicle fueling locations, including, but not limited to, local fueling stations, convenience stores (CS), hypermarket fueling stations (HFS), and/or fleet facilities, as well as fuel terminals for biodiesel. Prospective participants and stakeholders should expect additional specific program information and requirements to be published by mid-spring which will clarify the application process, eligibility, and how applications for grant funding will be scored.
Background on USDA Fleet:
USDA owns and operates one of the largest civilian fleets in the Federal Government. USDA is moving to acquire E85- or biodiesel-capable vehicles that meet USDA mission requirements instead of those that take conventional gasoline. This will occur over time during the normal fleet renewal process. USDA currently has 37,000 vehicles and replaces approximately 3,000 every year. Secretary Perdue directed USDA to:
- Acquire E85 or biodiesel-capable vehicles that meet USDA mission requirements;
- Use station locator websites and applications to fuel with E15, E85, and biodiesel where available;
- Prioritize the purchase of E15 for gasoline vehicles without E85 capability and the purchase of renewable diesel blends for diesel vehicles without B20 capability; and
- For USDA locations that have in-house refueling pumps, coordinate with fuel vendors to acquire and provide biofuel blends, including E15, E85, B20 and higher biodiesel blends, and renewable diesel blends.
These actions have the potential to increase USDA’s annual consumption of E15 by up to 9 million gallons, E85 by 10 million gallons, and biodiesel and renewable diesel blends by up to 3 million gallons. As availability of E15, E85, and biodiesel expands through the nation, USDA has the opportunity to reach these goals and have a significant impact. Where biofuels are available, the USDA fleet is directed to use biofuels.
Read the original press release here.
Feb 27, 2020
The USDA is scheduled to publish a notice in the Federal Register on Feb. 28 announcing a notice of funding availability (NOFA) of up to $100 million in competitive grants under the Higher Blends Infrastructure Incentive Program.
A prepublication version of the notice indicates the grant funding will be made available to eligible entities to support activities designed to expand the sales and use of renewable fuels under the HBIIP. The notice aims to alert prospective participants and stakeholders of the intention of the Commodity Credit Corp. and Rural Business Cooperative Service to jointly publish a NOFA by mid-spring. That NOFA will provide specific program information and requirements.
The notice explains that HBIIP is intended to encourage a more comprehensive approach to marketing higher blend levels of ethanol and biodiesel by sharing the costs related to and/or offering sales incentives for the installation of fuel pumps, related equipment and infrastructure.
According to the USDA, cost-share grants and/or incentives will be made available for higher fuel ethanol/biodiesel blends such as E15 and B20 at vehicle fueling locations. This includes local fueling stations, convenience stores, hypermarket fueling stations, and/or fleet facilities.
A full copy of the notice is available on the USDA website.
February 26, 2020 - Today, U.S. Reps. Angie Craig (MN-02) and Dave Loebsack (IA-02) delivered a letter signed by 11 members on the bipartisan Congressional Biofuels Caucus urging the Select Committee on Climate Crisis to include biofuels as a cost-effective and readily available solution for further decarbonization.
“The Select Committee must consider the declining carbon intensity of biofuels, as well as future decreases that can bring biofuels near net-zero emissions by 2050,” wrote the Members. “Ethanol’s carbon intensity is declining due to improved efficient farming practices and increased crop productivity that uses existing crop land efficiently and is not producing land cover change.”
“With greater biofuel use, transportation costs and Greenhouse Gas emissions can both be reduced without causing economic harm to families,” the Members continued. “We urge the Select Committee to support expanded use of low-carbon biofuels as a cost-effective solution for further decarbonization that can be implemented now.”
Rep. Craig was joined by House Agriculture Committee Chairman Collin Peterson, and U.S. Reps. Dave Loebsack, Cheri Bustos, Jeff Fortenberry, Don Bacon, Abby Finkenauer, Cindy Axne, Emanuel Cleaver, II, Ruben Gallego and Marcy Kaptur.
Rep. Craig remains committed to combating climate change. Rep. Craig is a cosponsor of the Energy Innovation and Carbon Dividend Act and has introduced the Resilience Revolving Loan Fund Act to give local communities the tools they need to combat climate change through local infrastructure. Additionally, she has remained committed to protecting the Renewable Fuel Standard and our domestic biofuels markets.
Full text of the letter can be found here.
February 14, 2020
NEW YORK (Reuters) - The U.S. Environmental Protection Agency is seeking White House guidance on the future of its controversial biofuel waiver program after a court ruling cast doubt over its legitimacy, and aims to announce a decision by early next month, a source familiar with the matter said on Friday.
In late January the U.S. Court of Appeals for the 10th Circuit said the EPA must reconsider some waivers it gave oil refineries exempting them from the nation's biofuel blending laws. The ruling here has prompted speculation that the EPA will need to reconsider dozens of other waivers it has granted under similar circumstances, and drastically reduce the numbers of waivers handed out in the future.
The exemption program has saved oil refineries hundreds of millions of dollars in regulatory costs. But it has infuriated the corn and biofuel industries, which say the Trump administration has overused the exemptions in a way that undermines demand for corn-based ethanol. The oil industry refutes that the exemptions hurt ethanol demand.
The EPA will announce a response to the court’s decision by March 9 after consultations with the White House, according to the source, who asked not to be named.
“EPA and (the Department of Justice) are reviewing the decision and carefully considering its potential impact on the program,” EPA spokeswoman Molly Block said in a statement.
EPA Administrator Andrew Wheeler had told reporters this month that the ruling “has the potential of completely, of changing the small refinery program.”
Under the U.S. Renewable Fuel Standard (RFS), the nation’s oil refineries are required to blend billions of gallons of biofuels such as ethanol into the nation’s fuel pool, or buy credits known as RINs from those that do.
But the EPA can waive refiners’ obligations if they prove compliance would cause them financial distress.
According to the court’s decision, the EPA overstepped its authority to grant waivers in the past for HollyFrontier’s Woods Cross and Cheyenne refineries and CVR Energy’s Wynnewood refinery because the refineries had not received exemptions in the previous year.
The court said the RFS is worded in such a way that any exemption granted to a small refinery after 2010 must take the form of an “extension.”
“This decision would deprive EPA of a critical tool used to help small refineries disproportionately impacted by the RFS,” Chet Thompson, president of the American Fuel and Petrochemical Manufacturers trade group said. “We hope the EPA will appeal this ruling and at the very least limit its impact to the 10th Circuit.”
According to EPA data, the agency granted seven biofuel waivers in 2015. That number rose to 35 in 2017 – meaning 28 waivers were given without having been given in a previous year.
The EPA does not name the refineries that receive the waivers, arguing the information is confidential, but Reuters has reported that some have gone to small facilities owned by large companies like Exxon Mobil Corp and Chevron Corp.
Market participants are awaiting clarity on how the EPA will address the court’s ruling. U.S. renewable fuel prices have more than doubled since the Jan. 24 court decision. Credits for 2019 traded at 25.5 cents each on Friday, up from nine cents before the decision, traders said.
Read the original story here: EPA consulting White House over biofuel waiver program: source
February 13, 2020
The marine territory covered by the countries in Southeast Asia is about three times larger than the combined land area—a large reason fish is the most popular and affordable protein source in the region. The U.S. Grains Council is specifically targeting the aquaculture industry in Southeast Asia as one of the next big demand growth opportunities for U.S. dried distillers grains with solubles (DDGS).
According to an agricultural outlook from the Food and Agriculture Organization of the United Nations, aquaculture feed production is expected to grow 35 percent over the next decade. The majority of this growth is expected to come from Southeast Asia, where fish claim a 31 percent share in meat consumption, and exports of fish and fish products continue to increase.
“In Southeast Asia, access to water provides a natural environment for expansion in aquaculture production—and growing export markets are creating more demand for production,” said Caleb Wurth, USGC assistant director of Southeast Asia. “Fish provide an extremely efficient source of protein production. Furthermore, a concentrated feed allows for intensive farming, which reduces the stress on the region’s wild ecosystems.”
The primary limiting factor for DDGS use in aquaculture feed is a lack of data and familiarity with the feed ingredient. In the absence of experience, end-users have misconceptions about DDGS, including that use will yellow fillets, questions of whether or not they are halal (permitted for Muslim diets) and others, all of which USGC is working to dispel. As a result, current inclusion rates for DDGS are estimated between zero and 5 percent, on average. USGC’s Southeast Asian office’s technical training and on-the-ground engagement is breaking down these barriers.
“Until now, U.S. coarse grains and coproducts have been under-utilized and under-considered feed rations for shrimp, tilapia and pangasius [a large catfish species native to Southeast Asia]—the region’s top species by volume,” Wurth said. “A combination of funding from USDA’s Market Access Program and Agricultural Trade Promotion program has allowed us to specifically target this amassing market.”
To help in this effort, USGC has hired a part-time consultant to spearhead the aquaculture program. Ronnie Tan, a nutritionist by education, has more than 35 years of experience in the aquaculture supply chain and international marketing. In this role, he is developing and targeting technical education and trade servicing programs for aquaculture in Southeast Asia. The initial program is focusing on Vietnam, Thailand and Indonesia, with likely expansion into Malaysia, Myanmar and the Philippines in the future.
USGC kicked off its new aquaculture-focused venture with two seminars in January 2020 in Ho Chi Minh City, Vietnam, and Bangkok, Thailand, with nearly 100 customers participating.
The seminars focused on the inclusion of DDGS and high-protein DDGS in shrimp, fin fish and marine species. Local U.S.-trained Vietnamese and Thai aqua nutritionists conducted a technical segment during the seminars, in addition to a commercial segment led by Tan, Wurth and DDGS-producing USGC members.
“The council’s aquaculture program will help end-users engage with global aquaculture experts, increase their familiarity with DDGS in aquaculture diets, dispel myths associated with its use and instill confidence that DDGS is an ingredient with low mycotoxins, high energy and quality protein,” Wurth said. “All of these activities will allow end-users to make informed decisions and increase the use of U.S. DDGS in their aquaculture operations.”
Success in raising inclusion rates to 5 percent for shrimp and marine fish and 3 percent for freshwater fish could result in 275,000 metric tons in additional demand for U.S. DDGS in a region already responsible for one-third of U.S. DDGS exports. Higher inclusion rates could up that consumption to between 500,000 to 1.25 million tons in the future.
Read the original story here: Aquafeed: The New Frontier for DDGS Demand in SE Asia
February 5, 2020
The official numbers are in and they confirm that U.S. ethanol exports netted the second-highest volume on record in 2019. According to government data released today and analyzed by the Renewable Fuels Association (RFA), American shippers rallied at year’s end with ethanol sales surging 37% higher to 146.5 million gallons (mg) in December. While coming in 13% under the 2018 record, ethanol producers still garnered a robust 1.47 billion gallons in exports last year.
In December, nearly all (96%) U.S. ethanol sold outside our borders landed in ten countries, with most experiencing healthy growth. Exports to Canada expanded 18% to 31.7 mg—sufficient to regain its status as our top customer after yielding that title to Brazil in November. Shipments to Brazil grew 14% to 30.8 mg, the largest volume in eight months. India was the third-largest destination at 27.8 mg, scaling up from 3.3 mg in November. Substantial volumes were also exported to South Korea (15.7 mg) and the European Union (14.4 mg).
Shipments of U.S. undenatured fuel ethanol climbed in December, up 29% to 68.2 mg. Eighty percent of exports were destined for Brazil (30.8 mg, +14%), India (12.8 mg, +287%), and the Netherlands (10.9 mg, +137%). Another dozen countries secured the remaining volumes of undenatured exports, including the Philippines (5.1 mg) and the United Kingdom (3.5 mg).
Sales of U.S. denatured fuel ethanol pressed higher in December, lifting 47% to 76.4 mg—the highest monthly total since Oct. 2018, aided by record shipments to India, South Korea, and Mexico. Forty percent of exports crossed the border to Canada (30.6 mg, +21%), with sizeable shipments also landing in India (15.0 mg), South Korea (13.8 mg), Colombia (6.7 mg), Mexico (3.7 mg), and Peru (3.4 mg).
Exports of U.S. ethanol for non-fuel, non-beverage purposes declined 24% to 1.9 mg, the lowest volume in two years. Most product shipped to Canada (0.9 mg), South Korea (0.6 mg), and Colombia (0.3 mg).
Imports from Brazil moderated in December as the U.S. purchased 14.0 mg of cane ethanol, scaling back from the 25.5 mg purchased in November. Total U.S. ethanol imports in 2019 increased 162% to 203.6 mg, up from 77.6 mg the prior year. In fact, more foreign ethanol entered our borders in 2019 than the last three years combined, marking the first time to breach 100 mg since 2013.
U.S. exports of dried distillers grains (DDGS)—the animal feed co-product generated by dry-mill ethanol plants—declined in December by 16% to 767,682 metric tons (mt). Mexico solidly retained its position as our top DDGS export market despite diminished sales (143,330 mt, -29%), capturing nearly one-fifth of the global market in December. Shippers exported 125,303 mt to South Korea, a 19% gain over November and the largest volume in nine months. Indonesia boosted imports by 31% to 95,405 mt, the largest imports in over a year. Significant volumes also landed in Vietnam (80,041 mt, -5%), Japan (80,041 mt, +102%), and Canada (43,991 mt, +6%). Total exports of U.S. DDGS realized in 2019 were 10.79 million mt, landing 9% under 2018.
Read the original story here: December U.S. Global Ethanol Sales where Invigorated while DDGS Exports Subsided
Lyons, KS - February 5, 2020 - Whitefox Technologies is pleased to announce that Kansas Ethanol LLC is to install Whitefox ICE™ membrane dehydration system at its 77 million gallons per year (mmgy) plant in Lyons, Kansas.
Mike Chisam, President, and CEO of Kansas Ethanol, said, "We are first and foremost pursuing avenues to reduce our operating costs and ways to lower our carbon intensity to capitalize on low-carbon fuel markets. We also want to improve our overall operations and debottleneck existing process units. After meeting with the team at Whitefox Technologies, we knew their system and team was the right one for us. We look forward to getting the system installed and running."
Stephan Blum, Whitefox Technologies Chief Technical Officer, said, "Kansas Ethanol is already an efficient and well-managed plant. The addition of Whitefox ICE™ will further improve their overall efficiency in operations by eliminating recycle streams and fluctuations in distillation and dehydration. Whitefox ICE™ will enable Kansas Ethanol to increase production by an average rate of 30,000 gallons per day.
"This increase, and the operational improvements will keep them highly competitive in low-carbon markets and have a positive impact on their bottom line.”
Whitefox Technologies CEO, Gillian Harrison, said, “It’s great to be working with the team at Kansas Ethanol to further improve their energy and operational efficiency. It will be our first plant in this important state and our ninth ICE solution. This takes us to over 100 mmgy of installed membrane capacity, which is an exciting milestone.”
Kansas is home to 12 ethanol plants and produces nearly 500 million gallons peryear of renewable, clean-burning ethanol fuel.
Learn more about Whitefox Technologies here
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Jan 28, 2020
A U.S. court decision last week striking down three biofuel waivers that the Environmental Protection Agency gave oil refineries in 2017 has cast doubt on the legitimacy of dozens of other EPA exemptions granted under similar circumstances, according to industry experts and agency data.
That spells uncertainty for a handful of independent refiners that secured lucrative waivers from the Trump administration, and could fire up prices for the biofuel blending credits those facilities need to comply with the nation’s biofuel law.
“The potential ramifications are huge,” said James Stock, an economist and professor at Harvard University who has researched biofuel policy.
Under the U.S. Renewable Fuel Standard, oil refineries are required to blend billions of gallons of biofuels such as ethanol into their fuel or buy credits from those that do. The EPA can waive those obligations if they prove compliance would cause them financial distress.
The biofuel industry has been incensed by a near quadrupling of waivers granted by the Trump administration, saying it is undermining demand for corn-based ethanol. The oil industry argues the waivers are needed to protect refining jobs, and says the waivers do not affect actual ethanol usage.
The U.S. Court of Appeals for the 10th Circuit on Jan. 24 vacated here three biofuel waivers the EPA granted in 2017 to two small refineries owned by HollyFrontier and one by CVR Energy, which is controlled by Trump ally and billionaire investor Carl Icahn.
According to the court's decisihere the EPA overstepped its authority to grant the waivers because the refineries had not received exemptions in the previous year. The court said the RFS is worded in such a way that any exemption granted to a small refinery after 2010 must take the form of an "extension."
It also noted research showing oil refineries are able to pass the costs of complying with the RFS to consumers by raising fuel prices, suggesting the waivers were not needed to help the oil refineries financially.
Officials at Holly Frontier and CVR were not immediately available to comment. EPA spokesman Michael Abboud said the agency is reviewing the decision.
A coalition of biofuel industry groups had challenged the three exemptions, bringing the suit. Those groups hope the court decision can eventually be applied to other waivers because the issues in question apply more broadly, said Geoff Cooper, president of the Renwable Fuels Association industry group.
According to EPA data here the agency granted seven biofuel waivers in 2015. That number rose to 35 in 2017 – meaning 28 waivers were given without having been given in a previous year. The EPA does not name the refineries that receive the waivers, arguing the information is confidential, but Reuters has reported here that some have gone to small facilities owned by large companies like Exxon Mobil and Chevron Corp.
Harvard’s Stock said the case threatens to hit small oil refineries hard if it means the waivers will be rescinded and they must comply with the RFS.
“All of a sudden there would be vast amounts of past obligations due, combined with the prospect of very limited (waivers) going forward,” he said.
Prices of blending compliance credits, known as Renewable Identification Numbers (RINs), are up about 20% since the court decision to one-month highs.
Ericka Perryman, a spokeswoman for the American Fuel and Petrochemical Manufacturers refining industry group, said AFPM was “carefully reviewing the opinion and potential implications.”
Read the original story here: Court Decision Casts Doubt On Dozens Of US Refinery Biofuel Waivers
Jan 27, 2020
In a decision that is expected to broadly impact the Environmental Protection Agency’s approach to granting small refinery exemptions (SREs) under the Renewable Fuel Standard, the U.S. Court of Appeals for the Tenth Circuit late on Friday struck down three exemptions that were improperly issued by EPA.
The court ruling stems from a May 2018 challenge brought against EPA by the Renewable Fuels Association, the National Corn Growers Association, the American Coalition for Ethanol and National Farmers Union.
“We are extremely pleased with the Tenth Circuit’s decision to vacate the waivers granted by EPA to three refineries owned by CVR Energy and HollyFrontier,” said RFA President and CEO Geoff Cooper. “The Court has affirmed our long-held position that EPA’s recent practices and policies regarding small refinery exemption extensions were completely unlawful. And while the decision addresses three specific exemptions, the statutory interpretation issues resolved by the court apply much more broadly.”
Among other findings, the Court held that EPA cannot “extend” exemptions to any small refineries whose earlier, temporary exemptions had lapsed. According to the Court opinion, “the statute limits exemptions to situations involving ‘extensions,’ with the goal of forcing the market to accept escalating amounts of renewable fuels over time. None of the three small refineries here consistently received an exemption in the years preceding its petition. The EPA exceeded its statutory authority in granting those petitions because there was nothing for the agency to ‘extend.’” EPA’s own data show that a maximum of only seven small refineries could have received continuous extensions of their previously existing exemptions. Yet, recently EPA has granted as many as 35 exemptions in a single year.
“The Court’s decision is welcome news for corn growers,” said National Corn Growers Association President Kevin Ross. “Ethanol is an incredibly important value-added market for corn farmers, and EPA’s waivers have reduced RFS volume requirements by more than 4 billion gallons over the past three years, impacting corn demand. We are optimistic this decision will finally put an end to the demand destruction caused by waivers and keep the RFS back on track.”
The Court also found that EPA abused its discretion in failing to explain how the Agency could conclude that a small refinery might suffer a disproportionate economic hardship when the Agency has simultaneously consistently maintained that costs for RFS compliance credits, or RINs, are passed through and recovered by those same refineries.
“ACE members are elated the Tenth Circuit court agreed with us that EPA overstepped its authority in granting three specific small refinery exemptions to CVR Refining and HollyFrontier,” said American Coalition for Ethanol CEO Brian Jennings. “The court’s ruling highlights how EPA abused the SRE provision of the Renewable Fuel Standard in broader terms to unfairly enrich the oil industry which could have far-reaching implications on the legitimacy of other refinery waivers and limit how they can be used moving forward.”
According to the renewable fuels coalition, the Court’s decision sends a resoundingly positive signal to the marketplace at a time when it is desperately needed.
“This ruling comes at a critical time for America’s farmers and the biofuels industry,” said National Farmers Union President Roger Johnson. “Due in large part to EPA’s rampant and ongoing abuse of the SRE program, 2019 was one of the most challenging years in history for the agriculture and biofuel sectors. We believe this ruling will help restore the ability of the RFS to drive demand and expand markets for renewable fuels, as Congress intended, providing a badly needed shot in the arm for rural America.”
The Court’s opinion is available here.
WEST LAFAYETTE, Ind. – Since 1990, the United States has ramped up its production of biofuels — to about 16 billion gallons of ethanol and 1.6 billion gallons of biodiesel in 2017. At the same time, production of palm oil has increased nearly sixfold, mainly for food production, and with it significant deforestation in Indonesia and Malaysia.
That overlap has led some analysts to blame the United States for deforestation in Indonesia and Malaysia, suggesting that the expansion in palm oil production is driven by biofuel production in U.S. But a Purdue University study shows that only a scant fraction of the deforestation in those countries can be pinned on U.S. biofuel production and policy.
“Our analysis shows that less than 1 percent of the land cleared in Indonesia and Malaysia can be tied to U.S. biofuel production,” said Farzad Taheripour, a research associate professor of agricultural economics at Purdue. “The amount is not significant. We’re talking about thousands of hectares amidst the millions that have been cleared for oil palm plantations and production of other commodities in Malaysia and Indonesia.”
Taheripour and the late Wally Tyner, who was the James and Lois Ackerman Chair in Purdue’s Department of Agricultural Economics, published their results in the journal Biotechnology for Biofuels based on analysis from the GTAP-BIO model, a Purdue-led economic model of the global economy available to researchers around the world for quantitative analysis of international economic-environmental-energy issues. The model included a more comprehensive look at demand for all types of vegetable oils and fats impacted by U.S. biofuel policies rather than focusing on only soy and palm as past studies have done.
“Those analyses that limit their modeling framework to only palm and soy oils and ignore other types of vegetable oils and fats provide misleading information and exaggerate about the land use implications of the U.S. biofuels for (Malaysia and Indonesia),” the authors wrote.
As the United States uses soybeans and corn to produce biofuels, one could expect less soybeans and corn will remain for other uses, including exports. That could generate some land use changes and deforestation across the world including Malaysia and Indonesia, which clear natural land to plant palm oil trees and other commodities.
“But we’ve not seen that happen. In the U.S, we have lots of unused land available to farmers who can convert it to corn or soybeans. There has been no need to cut forests here,” Taheripour said. “In addition, crop productivity has increased significantly over time, providing more yield on the same amount of land. Because of those, the expected deforestation or conversion of natural land has not had to largely happen to account for U.S. biofuel production.”
Countries that import U.S. corn and soybeans also benefit from yield increases and use of other types of oils, such as canola, sunflower and cottonseed. It’s more likely that growing populations in countries such as India, China, and rest of Asia are mainly fueling the demand for oil palms grown in Malaysia and Indonesia. The U.S. uses little palm oil for food, just under 2 percent of the palm oil produced worldwide.
When considering all those factors, U.S. biofuel production accounts for fewer than 60,000 hectares — or 0.5 percent — of the more than 11.7 million hectares of natural land cleared in Malaysia and Indonesia between 2000 and 2016.
“Production of biofuels in the U.S. generates some land use effects in Malaysia and Indonesia due to market-mediated responses, in particular through the links between markets for vegetable oils,” the authors wrote. “These effects are minor compared to the magnitude of land use change in Malaysia and Indonesia.”
The U.S. National Biodiesel Board Foundation and the U.S. Federal Aviation Administration funded the research.
Read more on the study here.
Jan 20, 2020
Neste, the world's largest producer of renewable diesel and renewable jet fuel refined from waste and residues, will deliver renewable jet fuel (sustainable aviation fuel, SAF) to Zurich Airport during the World Economic Forum 2020 in Davos, Switzerland. This is the first time SAF is available in Switzerland.
Neste MY Renewable Jet Fuel™ has up to 80% smaller carbon footprint compared to fossil jet fuel. As a result of close collaboration between Neste, Jet Aviation and Zurich Airport, this sustainable aviation fuel will be blended with fossil jet fuel. Business jets operating in Zurich during the World Economic Forum event in Davos can avail of sustainable aviation fuel.
“Jet Aviation is committed to investing in solutions that provide business aviation owners and operators the choice to contribute to sustainable aviation. With a view to the future, these pilot schemes offer the distinguished world leaders flying into Zurich for WEF viable options in which they may collaborate. This is an important milestone in Jet Aviation’s journey to support the aviation industry’s sustainability goals,” says David Paddock, Jet Aviation President.
“We are very excited about Neste MY Renewable Jet Fuel being now available for the first time at the Zurich airport. The aviation industry has set clear targets for a more sustainable future. And as the world leaders gather at the World Economic Forum, we are proud to cooperate with Jet Aviation and Zurich Airport and offer WEF visitors our sustainable aviation fuel, which contributes to efficient reduction of aviation related greenhouse gas emissions. We will continue close collaboration with partners to support the aviation industry in reaching its ambitious emission reduction targets,” says Thorsten Lange, Neste’s Executive Vice President for Renewable Aviation.
Aviation is a key enabler of the global economy, connecting people and businesses across the globe. At the same time, the aviation industry accounts for approximately 2-3% of global man-made CO2 emissions and global aviation is growing. The aviation industry has set bold targets to reduce aviation-related emissions, including carbon-neutral growth from 2020 onwards and a 50% reduction of net aviation carbon emissions by 2050. Sustainable aviation fuels are seen as an important part of the solution.
Neste MY Renewable Jet Fuel is based on Neste’s proprietary NEXBTL technology and produced from 100% renewable waste and residue raw materials. It is fully compatible with the existing jet engine technology and fuel distribution infrastructure when blended with fossil jet fuel. In the US and Europe, the company’s renewable jet fuel annual capacity is currently 100,000 tons. With further production expansion on the way, Neste will have the capacity to produce over 1 million tonnes of renewable jet fuel globally by 2022.
Jan 16, 2020
President Donald Trump and Chinese Vice Premier Liu He signed a “phase one” trade deal Wednesday at the White House, an agreement that should pave the way for China to uphold its pledge to purchase up to $80 billion in agricultural goods over the next two years and make structural changes that should provide U.S. grains products improved access to the Chinese market over the long term.
The agreement is set to go into effect on Feb. 14, 30 days after the signing. The deal itself runs more than 90 pages and reportedly also includes confidential sales targets for a full range of U.S. agricultural products, including grains, distiller’s dried grains with solubles (DDGS) and ethanol.
U.S. Grains Council (USGC) Chairman Darren Armstrong, a farmer from North Carolina, was among the farmers and others who attended the agreement’s signing.
“The Council is pleased to see the signing today of a phase one deal with China, which should reduce continued market uncertainty and incentivize China to purchase significant amounts of U.S. agricultural products,” he said in a statement released on Wednesday.
“The structural reforms in the agreement – once fully committed and implemented – will hopefully offer lasting impacts beyond short-term commitments to make accelerated, market-driven purchases. The agreement, as we understand it, will offer opportunities for U.S. farmers to once again become competitive in China and serve our customers by addressing retaliatory tariffs and long-standing, non-tariff barriers to trade.”
Despite ongoing trade tensions, the Chinese market holds immense growth potential for U.S. agriculture. China is the second largest corn producer and consumer behind the United States and, in the past, was the world’s largest importer of sorghum and DDGS. These feed ingredients supply the world’s largest swine, aquaculture and egg industries, the second largest poultry industry and growing dairy and beef operations.
In the run up to the event, the Trump Administration also removed China’s formal designation as a currency manipulator since the deal includes commitments from China to upgrade its currency practices and refrain from further competitive devaluation. This and the warm reception at the deal’s signing are considered signs of improved relations between the two countries.
Over the years, the Council has leveraged its capital and expertise to help advance China’s food security, safety and sustainability through trade. It has been at the forefront of helping local producers lead modernization of China’s swine industry, a dairy technical training center and myriad of other trade servicing tasks. In recent years, the Council’s China office has offered technical and logistical input as China seeks to diversify its fuel supply and achieve environmental benefits by blending fuel ethanol.
“Our organization and our members believe in the long-term value of international trade,” Armstrong said. “We have spent more than 35 years working with partners in China to develop its feed and livestock industry. Our sector is committed to remaining a reliable supplier of grain products and ethanol for customers in the feed, food and energy industries in China as our countries’ relationships evolve.”
The Trump Administration has said there will be a second phase of negotiations, though it may not be concluded until after the presidential election in November.
Read More on the deal here.
Jan 15, 2020
The U.S. Energy Information Administration maintained its December forecast that U.S. ethanol production will average 1.03 million barrels per day in 2020 in its latest Short-Term Energy Outlook, published on Jan. 14. That level of production is expected to continue through 2021.
In the STEO, the EIA notes that U.S. ethanol producers experienced weakening operating margins last year as a result of limited demand growth and oversupply. As a result, ethanol production fell for the first time in seven years, down 2 percent from 2018 levels to an average of 1.03 million barrels per day. The EIA currently forecasts that limited domestic and global demand growth potential will result in ethanol production staying largely unchanged in 2020 and 2021.
Ethanol consumption averaged 951,000 barrels per day last year. The EIA predicts consumption will fall to 947,000 barrels per day this year, and 945,000 barrels per day in 2021, driven by falling motor gasoline consumption. The predicted level of consumption would result in the ethanol share of total gasoline, which was estimated at 10.1 percent in 2018 and 10.02 percent in 2019, remaining relatively flat in 2020 and 2021. The EIA said that stable ethanol share assumes growth in higher level ethanol blends is limited by a combination of unfavorable blending economics compared with gasoline, depressed renewable identification number (RIN) prices, and limited consumer demand for ethanol blends beyond 10 percent.
Biodiesel production fell by nearly 2 percent from 2018 to 2019, averaging approximately 119,000 barrels per day last year. The EIA said it expects biodiesel production to increase by 13 percent this year to 135,000 barrels per day, and by 17 percent in 2021, reaching 158,000 barrels per day. The increase is expected to be driven by increasing Renewable Fuel Standard targets and the renewal of the biodiesel production tax credit through 2022.
Net imports of biomass-based diesel were up 47 percent, reaching 23,000 barrels per day in 2019. The EIA expects net imports to increase to 28,000 barrels per day this year and 39,000 barrels per day in 2021. The expected increase is attributed to increased volumes of renewable diesel imported to meet both the California Low Carbon Fuel Standard requirements and rising RFS targets.
The EIA’s most recent weekly data shows ethanol production reached a near record high of 1.095 million barrels per day for the week ending Jan. 10, up from 1.062 million barrels per day the previous week.
Ethanol ending stocks reached 23.006 million barrels the week ending Jan. 10, up from 22.462 million barrels the previous week.
The agency’s most recent monthly data shows the U.S. imported 522,000 barrels of ethanol in October, all from Brazil. During the same month, the U.S. exported 2.689 million barrels of ethanol, primarily to Canada, India, and Brazil.
Read the original story here: EIA Predicts Ethanol Production Will Remain Flat Through 2021
Jan 10, 2020
The U.S. Government Accountability Office (GAO) will review the Trump administration’s use of waivers exempting oil refineries from the nation’s biofuel blending requirements, according to a letter dated Friday, after lawmakers called for an investigation.
The so-called Small Refinery Exemptions are intended to protect refineries in financial distress from the cost of blending ethanol into gasoline, but the U.S. corn lobby and its representatives have accused the administration of overusing them to help oil companies at the expense of farmers.
The GAO, a congressional watchdog unit, accepted the request from lawmakers - including Iowa Representative Abby Finkenauer, Minnesota Representative Collin Peterson and Illinois Representative Rodney Davis - to examine the administration’s handling of the waivers handed out for the 2018 compliance year.
The group in August had asked the GAO in a letter to review the factors that the Trump administration’s Environmental Protection Agency considered in approving the waivers, and to examine the Department of Energy’s process for recommending exemptions to EPA, according to the letter.
“GAO accepts your request,” GAO Managing Director of Congressional Relations Orice Williams Brown wrote to the lawmakers in its response dated Jan. 10. The letter said work will begin “shortly” on the review.
Under the U.S. Renewable Fuel Standard, refineries are required to blend 15 billion gallons of ethanol annually. But the EPA can exempt small facilities that demonstrate compliance would hurt them financially.
The EPA has roughly quadrupled the number of waivers it has been granting to oil refineries since Donald Trump became president. The agency has also routinely waived higher volumes than the DOE has recommended.
The EPA’s decision in August to grant 31 oil refiners exemptions to the rules for the 2018 compliance year prompted the latest wave of outrage from farmers and producers of the corn-based fuel.
The Corn Lobby argues that the exemptions hurt demand for ethanol, while the oil industry disputes that claim and says the blending requirements cost them a fortune.
“Our concerns stem from the economic consequences to our rural communities created by exempting nearly 4 billion gallons of fuel from the RFS, a standard intended to expand the nation’s renewable fuels sector,” the lawmakers’ August letter said.
A recent effort to quell anger in the Farm Belt over the exemptions largely fell flat after the EPA in December announced a finalized rule for 2020 blending requirements that the biofuels industry criticized as inadequate.
Read the original story here : Congressional Watchdog To Review Trump Administration's Use Of Biofuel Waivers
Jan 7, 2020
U.S. ethanol exports receded in November, decreasing 5% to 107.3 million gallons (mg), according to data issued today by the government and analyzed by the Renewable Fuels Association (RFA). However, the Brazilian export market was reinvigorated despite the restrictive tariff rate quota limiting volumes that can enter the country duty-free. Brazil doubled its purchases and overtook Canada as our top customer for the first time since April.
Two-thirds of all U.S. ethanol exports in November landed in Brazil (27.0 mg, +131%), Canada (26.8 mg, -11%), and Colombia (12.5 mg, +47% to a record high). U.S. shippers also sent sizable volumes to Oman (9.4 mg following zero in October), South Korea (9.0 mg, -3%), and the European Union (8.7 mg, +4%). November ethanol sales imply an annualized export volume of nearly 1.5 billion gallons which, if realized, would be the second-largest volume on record.
Shipments of U.S. undenatured fuel ethanol slowed in November by 11% to 52.8 mg. Half of exports were destined for Brazil (27.0 mg, +131%) with the remainder dispersed among another dozen countries including Nigeria (4.7 mg, up from zero), the Netherlands (4.6 mg, +84%), India (3.3 mg, -81%), and South Korea (3.2 mg, +14%). Notably, sales to Mexico scaled back 91% to under 200,000 gallons.
Sales of U.S. denatured fuel ethanol picked up in November, pressing 13% higher to 51.9 mg. Roughly half of exports (25.3 mg) moved north to Canada, despite an 11% decrease to the smallest volume since May. Remaining shipments of denatured fuel ethanol were distributed primarily to Colombia (11.2 mg, +56%), Oman (9.4 mg, up from zero), South Korea (5.1 mg, -10%), and Peru (0.7 mg, -69%).
Exports of U.S. ethanol for non-fuel, non-beverage purposes slipped 67% to 2.6 mg. The majority of undenatured product shipped to Canada (0.9 mg), South Korea (0.7 mg), and Saudi Arabia (0.5 mg), while most denatured product landed in Canada (0.2 mg) and the Dominican Republic (0.1 mg).
Imports from Brazil intensified in November as the U.S. purchased its second-largest volume of cane ethanol in a year, up 16% to 25.4 mg. Total U.S. ethanol imports for 2019 now stand at 189.4 mg—nearly triple the volume imported last year during the same period. Consequently, the U.S. is on pace to log over 200 mg by year end.
U.S. exports of dried distillers grains (DDGS)—the animal feed co-product generated by dry-mill ethanol plants—rebounded in November, jumping 20% to 911,569 metric tons (mt). Sales to Mexico rallied with a 36% increase in DDGS heading southbound, or 200,669 mt (a six-month high), again marking its place as our top customer (22% of our export market). Sales also took off in South Korea (105,328 mt, +51%) and Thailand (88,424 mt, more than triple October exports). Vietnam (84,188 mt, -29%), Indonesia (72,698 mt, +13%), Turkey (54,449 mt, up from zero), and the European Union (41,588 mt, +116%) rounded out our top markets in November. Total year-to-date exports of U.S. DDGS stand at 10.02 million mt, which implies an annualized export volume of 10.93 million mt.
Read more here: U.S. Ethanol Exports Ease Despite Pop in Sales to Brazil while U.S. DDGS Shipments Surge Higher