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Biofuel and Industrial News Update

Virgin Group to test biofuels for aviation next year
Richard Branson has said that his company Virgin Group intend to produce biofuels around the start of the next decade, and will also be testing a jet plane on renewable fuel early next year.

Virgin plans to produce biofuels for the use in buses, trains and cars within three to four years time.  They are also developing biofuels for aircraft in conjunction with Boeing Co and engine-maker GE Aviation.

German Biodiesel sector slowing
The German biodiesel industry has been slowed by high feedstock prices, more biodiesel plants expected to come on line soon, new taxes on biodiesel, and also demand has not been keeping up with production.

Managing Director of FO Licht, Christoph Berg, has implied that there are a few German plants that are presently idle since they have little or no market for their product.  Berg also confirmed that independent investors in German biodiesel are losing money; and some biodiesel producers are considering leaving the business due to the high feedstock prices and government taxation.  This year Germany introduced a 9-cent-per-litre tax from previously zero tax, which is to jump to 15 cents per litre next year.

US ethanol plant construction put on hold
Expansion plans for at least three ethanol plants have been put on hold due to high maize prices, and ethanol prices dropping as more plants come on line.

Abengoa cellulosic pilot plant opened in Nebraska
Abengoa Bioenergy has opened a pilot plant for cellulosic ethanol in the US state of Nebraska.  Nebraska is now the second largest ethanol producing state in the US, following Iowa.

The new plant is to be involved in research and development of second- generation biofuel production processes from lignocellulosic biomass.  The plant will be testing new equipment, systems and catalysts required to breakdown various organic compounds and process them (such as herbaceous and woody materials) thereby optimising ethanol production.

Abengoa Bioenergy presently has a presence in three global bioethanol markets - the US, Brazil and Europe.

Spanish firm Abengoa have also announced that they will be constructing a bioethanol plant at the Port of Rotterdam.  The annual capacity of around 480 million litres will almost double the quantity of bioethanol that the company already produces in Europe.  Rotterdam expects to be producing at least 2 million tonnes of biofuel annually over the next few years, since the Dutch government are keen to encourage the sector and introduced tax incentives in 2006.

Only seven plants likely for Hungary by 2010
Around 7 of the 40 or so bioethanol plants that are scheduled to be built in Hungary by 2010 are likely to be completed, according to Hungary's  Association of Bioethanol Producers.  Altogether, if the 40 facilities were to start operating, they would require around 10Mt of maize (which is 25% more than the country's entire annual average harvest).  Presently, there are just two biofuel plants operating, processing just over 900,000 tonnes of maize a year.

It has mainly been extremely high maize prices this year that have discouraged investors, as only a small number of companies have submitted applications for construction licenses this year; and only seven are expected to start building.  Of these 7 plants, 3-4 are to be completed by 2008, with another three by 2010, and total maize to be processed by the plants is around 2-3 Mt annually.

Brazilian ethanol exports to Europe on the rise
Brazilian ethanol exports to Europe have been boosted in September, due to increasing prices of grains used as feedstock for ethanol production.  Bioagencia (a company that sells ethanol for mills from Brazil's centre-south region), have said that sales to the European Union surpassed 400 million litres in September, in comparison to 80 - 100 million litres in previous months.  According to Reuters, Germany, Spain and Britain have been the main markets.  It is unsure whether the continuation of this upward pace in exports to the European Union will continue, and it will be dependent on the Brazilian Real, which has risen by almost 9% against the dollar since early September.

Overall, the United States is seen as the main market for Brazilian ethanol exports; direct exports were forecast to drop (due to the 54 cent-per-gallon tariff placed on them), but shipments through the Caribbean are expected to rise, since ethanol that goes through processing plants in the Caribbean enters the US market tariff free due to the Caribbean Basin Initiative pact.

Two large biofuel plants to be built in Estonia
Two large biodiesel plants are expected to be built in Estonia over the next couple of years.  A biodiesel plant with production capacity of 100,000 tonnes is expected to be completed in Paldisk in 2008, and will use rapeseed oil as a feedstock.

Another large bioethanol plant with production capacity of 100,000 tonnes is expected to become operational in Kunda sometime in 2009.  The main raw materials will be grain crops, and annual requirements are expected at 350,000 tonnes.  The majority of the feedstock is to come from Estonia, however, contracts for grain delivery from Ukraine and Kazakhstan have also been issued.

The sales market for both plants would be Scandinavian countries, since they face a shortage of domestic biofuel, according to APK-Inform Information Agency.

India mandates 5% ethanol mix
A 5% blend of ethanol with petrol has been made mandatory across India, excluding several provinces.  The Government also plans to increase the amount from 10% in October 2008.  The 10% blending is optional from this year, and mandatory from October 2008.

Department for Transport paper: 'Biofuels: Risks and Opportunities'
The Dft has published a new report entitled 'Biofuels: Risks and Opportunities', which attempts to provide a balanced commentary on some of the recent media stories on biofuels.

For the full report: http://www.dft.gov.uk/pgr/roads/environment/rtfo/289579

WEC report
The World Energy Council (WEC) recently published a report entitled "Transport Technologies and Policy Scenarios to 2050", which was conducted by a group of international WEC transport experts and provides policy recommendations to develop sustainable transport systems.

Overall the study examines the prospects for alternative liquid fuels, hydrogen, (plug-in) hybrids, electric vehicles and other technologies.  Next-generation biofuels were identified as the most promising option to ensure a transition towards sustainable mobility.

Gasoline and diesel are likely to remain the most dominant fuels in 2050, however, the portion of advanced biofuels (such as biomass-to-liquid and cellulosic ethanol) are expected to grow considerably.

For more information:
http://www.worldenergy.org/documents/transportation_study_final_online.pdf

 

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