#FEW15 Ethanol Producer Panel Focuses on RVOs

few15-panelA diverse group of ethanol producer company representatives took the stage Tuesday at the 2015 Fuel Ethanol Workshop and much of the conversation centered around reaction to the EPA’s new proposed volume obligations for biofuels under the Renewable Fuel Standard (RFS). Panelists also discussed the industry’s continuing efforts to expand the marketplace for ethanol with higher blends, progress with cellulosic ethanol production facilities, and more.

BBI International president Tom Bryan moderated the panel, which featured:

Paul Koehler, Vice President, Pacific Ethanol
Mike Jerke, CEO, Guardian Energy Management
Jan Koninckx, Global Business Director for Advanced Biofuels, DuPont Industrial Biosciences
Chris Standlee, Executive Vice President, Abengoa Bioenergy
Dan Cummings, President, POET-DSM Advanced Biofuels
Ray Defenbaugh, President, CEO & Chairman, Big River Resources

This is a conversation worth listening to as each of these industry pioneers had insightful comments and a positive attitude about the ethanol business in the United States going forward.

FEW 2015 Producer Panel

2015 Fuel Ethanol Workshop Photo Album

Coverage of the Fuel Ethanol Conference is sponsored by
Coverage of the Fuel Ethanol Conference is sponsored by Novozymes

EPA Proposal will be Hot Topic at FEW

The new Environmental Protection Agency (EPA) proposal for volume requirements under the Renewable Fuel Standard will be a hot topic at the 2015 Fuel Ethanol Workshop this week in Minneapolis.

aeclogoAdvanced Ethanol Council (AEC) Executive Director Brooke Coleman will be on the program tomorrow morning to talk about what the proposal means for the advanced biofuels industry. “The good news is it is clear that EPA and the Obama Administration want to send a signal to the marketplace that domestic renewable fuel markets are going to grow. The blending targets are definitely stronger and theoretically create new markets,” says Coleman. “But Clean Air Act regulations have to have backbone to actually achieve their ambitions, and EPA is still allowing the oil industry’s refusal to comply with the RFS to be cause to slow the program down.”

There continues to be concern in the industry about how the proposal will impact investment in advanced biofuels. “Renewable fuels are a huge opportunity for the United States to achieve President Obama’s climate change goals, capture private investment, create jobs and save drivers money. Today’s proposal undermines all of that,” says Adam Monroe, president of Novozymes Americas, a biotechnology company that provides enzyme solutions for biofuels production. “The EPA’s aspiration should not be a slow buildup in renewable fuel volumes, it should be an economy driven by clean technologies, supporting thousands of new jobs and billions in private investment. That all starts with aggressive goals for the RFS.”

Novozymes will be featured in many of the workshops at FEW and will be sponsoring our coverage this week.

Coverage of the Fuel Ethanol Conference is sponsored by
Coverage of the Fuel Ethanol Conference is sponsored by Novozymes

Novozymes Part of Global Bioenergy Initiative

sustainableA new UN Sustainable Energy for All initiative was announced this week with the goal of “doubling the global use of renewable energy and ensuring universal energy access by 2030.”

Co-chaired by the UN Food and Agricultural Organization (FAO) and the Roundtable on Sustainable Biomaterials, the initiative includes Novozymes, a global technology provider for the biofuels industry, as a partner in the project to scale up the development and deployment of sustainable bioenergy solutions.

novozymes“With this initiative, we help bring together a diverse range of global frontrunners to advance the development and use of sustainable bioenergy in countries where the environmental and socio-economic benefits are greatest,” said Thomas Videbæk, Executive Vice President for Business Development with Novozymes. “It is a unique chance to involve governments, industry, financial institutions, academia, and civil society to identify opportunities where action on sustainable bioenergy can be accelerated.”

Accounting for nearly half of the global enzyme market, Novozymes has been a major player in the commercial development of cellulosic ethanol. “We produce the enzymes that help break down starch and make sugar available for first generation ethanol and we are working on a number of projects to help breakdown cellulosic material,” said Videbæk in an interview today with DomesticFuel.

Videbæk says next generation biofuels are considered “sustainable bioenergy” under the initiative’s High Impact Opportunity (HIO) goals. “I look at the biofuel area, be it first or second generation, as very sustainable forms of energy,” said Videbæk. “We certainly hope to see that continues going forward.”

Which is one of the reasons Novozymes wanted to be part of this initiative that they hope will help get some regulatory clarity regarding sustainable bioenergy around the world, including the United States. “And we can get politicians to commit to mandates and targets for this type of energy, because we believe that is for the best of the planet’s future,” Videbæk said.

In this interview, Videbæk explains much more about the new initiative and Novozymes’ role in it. Interview with Thomas Videbæk, Novozymes

Biofuel Producers Thrive Despite Cheap Oil

According to a new report, “How Alternative Fuel Companies Will Compete with $50 Oil,image001many biofuel producers are still able to thrive despite dropping oils prices nearing $50 per barrel. Lux Research evaluated 25 alternative fuel producers to identify the ones most likely to compete with cheap oil and found that renewable diesel producers Neste Oil and Diamond Green Diesel, gasification specialist Red Rock Biofuels, and Edeniq, which makes cellulosic ethanol, were among 13 alternative producers of fuels best positioned for cheap oil.

Lux Research analysts used its database of 400 alternative fuel producers to select 25 companies – from seven technology families, four feedstock types and three stages of development – for detailed analysis.

Among their findings:

  • Neste Oil, Diamond Green are benefiting from cost cuts. Thanks to lowered production costs achieved through feedstock diversification, renewable diesel producers Neste Oil and Diamond Green Diesel were the clear leaders in Lux’s model. On the other hand, Solena Biofuels and Joule Unlimited were among the laggards on account of delayed production and commercialization.
  • Developers move to alternate markets. Amid low oil prices, high-profile companies such as Solazyme, Amyris, and Gevo have shifted decisively toward specialty chemicals and nutraceuticals this year. Sapphire Energy also has shifted away from fuels and now targets nutraceuticals, producing Omega-3 EPA from its algae.
  • Oil majors remain a pillar of support. Believing cheap oil to be a short-term phenomenon, oil majors have remained prominent supporters of alternative fuel developers across various technology platforms. For example, Total has added to its existing portfolio in biofuels and bio-based chemical companies by investing in Renmatix, a biomass-to-sugars company.

“$50 oil was never an afterthought for technology developers,” said Yuan-Sheng Yu, Lux research associate and the lead author of the report. “Many companies have technology roadmaps for cheaper alternative fuels. Not all of them will actually achieve that benchmark, but some will – while others will find alternate markets or, ironically, use support from oil majors to survive until prices rise again.”

Biofuels Leaders Ask President for Meeting

A dozen organizations and companies representing biofuels interests this week sent a letter to President Obama asking for a meeting on proposed rules under the Renewable Fuel Standard (RFS) due to come out next month.

fuels-americaThe letter comes on the heels of an analysis from the Biotechnology Industry Organization (BIO) showing how EPA delays in setting volume requirements (RVOs) under the RFS have resulted in the loss of some $13.7 billion in investment in advanced biofuels like cellulosic ethanol. The letter was signed by BIO, the Renewable Fuels Association, Growth Energy, Advanced Ethanol Coalition, National Corn Growers Association, Association of Equipment Manufacturers, POET, DSM, Novozymes, and Abengoa.

“The EPA’s proposal in 2013 was an enormous disservice to you and your legacy, Mr. President,” the letter states. “Prior to the release of that proposal, we had asked to meet with the EPA, but were rebuffed. We would like to work with you to ensure that the mistake is not repeated.”

In addition to the letter and the analysis from BIO, the Fuels America coalition is running digital ads this week on Politico’s Environment & Energy section that say, “Will the next generation of biofuels be created in the United States or China? It’s up to you, Mr. President. Support the Renewable Fuel Standard.”

RFS Uncertainty Chills Advanced Biofuel Funding

biologoA new analysis from the Biotechnology Industry Organization (BIO) finds delays in rulemaking for the Renewable Fuel Standard (RFS) have chilled necessary investment in advanced and cellulosic biofuels.

According to the analysis, the industry has experienced an estimated $13.7 billion shortfall in investment over the past two years as the Environmental Protection Agency has delayed setting volume obligations for biofuels under the RFS.

(EPA) was nine months late issuing the 2013 RVOs and is more than 17 months late in issuing the 2014 rule. Further, the agency has made cellulosic biofuel producers wait an average of 29 months (more than two years) for approval of production pathways. Currently, 29 companies have unresolved petitions filed with EPA and they have been waiting on average more than 32 months for resolution. A majority of an estimated $13.7 billion shortfall in investment for cellulosic and new advanced technologies should therefore be attributed to EPA’s delays in issuing timely rules.

Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, notes that the situation came about just as plants were beginning to reach the commercial stage. “The chill in investment has had the heaviest impact on cellulosic biofuel developers,” said Erickson. “The delays in rulemaking have also undercut the industry’s ability to create new employment opportunities, resulting in the loss of more than 80,000 direct jobs.”

According to BIO, the industry has invested more than $5 billion in first-of-a-kind demonstration and commercial-scale biorefineries around the world. The analysis finds that as of April 2015, there are five commercial cellulosic biorefineries with a combined capacity of more than 50 million gallons within the United States and registered to meet the goals of the RFS, along with several pilot and demonstration plants. Additional commercial biorefineries are under construction.

Iowa Gov, Lt Gov to Tour Cellulosic Ethanol PLant

QCCPsyngentaQuad County Corn Processors (QCCP) and Syngenta will host Iowa Gov. Terry Branstad and Lt. Gov. Kim Reynolds for a tour of the cellulosic ethanol production facility in Galva, Iowa, Tuesday, April 21. The QCCP plant is the first commercial cellulosic ethanol production in the state.

QCCP recently passed the 1 million gallon milestone for cellulosic ethanol production using Cellerate™ process technology. Cellerate is a collaboration between Syngenta and Cellulosic Ethanol Technologies, LLC, a wholly owned subsidiary of QCCP. Cellerate process technology is designed to increase an ethanol plant’s production by allowing the corn kernel fiber to be converted into cellulosic ethanol. With Cellerate, the biofuels industry now has the technology available to create 2 billion gallons of additional cellulosic ethanol – all from corn already being processed.

Think Tank Ponders Cellulosic Ethanol Link

3rd-wayA new report from centrist think tank Third Way ponders the quest for cellulosic biofuels and concludes that the pathway is via corn ethanol.

This report confirms what the biofuels industry has been saying for some time now – that you cannot have cellulosic ethanol without the continued production and support of grain-based ethanol,” said Growth Energy CEO Tom Buis.

One of the takeaways from the Third Way report is that, “proposals to reform the Renewable Fuel Standard (RFS) would discourage engagement from the corn ethanol industry” and thus delay commercialization of cellulosic ethanol and steer investment overseas.

Renewable Fuels Association (RFA) president Bob Dinneen says the report highlights the importance of consistent policy for the continued evolution of biofuels. “Legislative efforts to undermine either will set the nation’s energy and economic future back generations,” said Dinneen. “Third Way should be commended for adding a thoughtful component to this ongoing discussion and I can only hope that it is read with interest by Senators Feinstein and Toomey.

“(T)he biggest point, coming from a thought leader in the space like Third Way, is that Congressional intervention on the RFS would be highly detrimental to the deployment of cellulosic biofuel,” said Brooke Coleman of the Advanced Ethanol Council.

“The success of the conventional ethanol industry has driven serious investment in the cellulosic industry and there is an important linkage between them,” says Adam Monroe, President Americas for Novozymes which produces enzymes used for cellulosic ethanol production. “Tinkering with the corn portion of the RFS now will only hurt both industries.”

The report also concludes that “companies with an extensive background in the corn ethanol industry are cracking the cellulosic code,” and continued investment from these companies in facilities and innovation is critical to growing U.S. cellulosic capacity.”

EPA Changes Cellulosic Waiver Credit Provisions

epa-150The Environmental Protection Agency (EPA) issued final rulemaking this week to clarify the data sources and methodology used to calculate the Cellulosic Waiver Credit (CWC) price.

Under the rule, EPA has calculated the CWC prices for 2014 at $0.49 and for 2015 at $0.64. According to the EPA document, “The price of CWCs are determined using a formula specified in the Clean Air Act (CAA). The cellulosic waiver credit price is the greater of $0.25 or $3.00 minus the wholesale price of gasoline, where both the $0.25 and $3.00 are adjusted for inflation.”

The direct final rule also amends the regulations to remove the CWC prices from the code of federal regulations allowing them to be announced in a more timely fashion on EPA’s website.

Partnership Accelerates Cellulosic Ethanol

nec15-cellerateAt the National Ethanol Conference last week, the Renewable Fuels Association (RFA) presented Quad County Corn Processors (QCCP) with the RFA 2015 Industry Award for the development of a process that led to the plant producing the very first gallons of cellulosic ethanol last year.

Cellerate process technology is a collaborative effort between Syngenta and QCCP’s subsidiary company Cellulosic Ethanol Technologies LLC that QCCP licenses to other ethanol plants. Cellerate, which was previously known as the Adding Cellulosic Ethanol process, was invented by QCCP plant engineer Travis Brotherson, pictured here with Jack Bernens of Syngenta.

I talked with Travis and Jack about what Cellerate can do for the industry as a whole and individual plants in this interview: Interview with Quad County Corn Processors and Syngenta

2015 National Ethanol Conference Photo Album