RINs’ Rise Shows Ethanol-Biodiesel Relationship

Renewable Identification Numbers (RINs) prices jumped sharply after tge Environmental Protection Agency (EPA) released its final numbers for the amount of biodiesel and ethanol to be blended into the nation’s fuel supply. This analysis from University of Illinois’ Scott Irwin and Darrel Good says not only were the EPA numbers a shock and reflected in the RINs’ prices, but it also shows the relationship between the two green fuels.
eth-biod rins
The price of D4 biodiesel RINs went up 30 percent and the price of D6 ethanol RINs increased over 90 percent in the three trading days following the release. The market was apparently surprised by how much the final conventional ethanol mandates, particularly in 2016, breached the E10 blend wall. In addition, the final rulemaking clearly signaled that the EPA is serious about getting “the RFS back on track,” and it would not be surprising if the EPA set the conventional ethanol mandate at the statutory level of 15.0 billion gallons as soon as 2017. The prospect of large conventional mandate gaps versus the E10 blend wall evidently shifted the expectation of market participants from one where the existing stock of RINs would not be exhausted for years to one where the stocks could be exhausted in a matter of months. When the stock of RINs is exhausted, the conventional gaps have to be filled by higher ethanol blends, such as E15 and E85, or biodiesel and renewable diesel. Our theoretical model predicts that the price of a D6 ethanol RINs should equal the price of a D4 biodiesel RINs if biodiesel and renewable diesel are the only feasible options for filling conventional mandate gaps. Consequently, the move of D6 RINs prices to nearly the same level as D4 RINs prices in the days following the November 30 release is an unmistakable sign that the market believes higher ethanol blends are not a feasible source of RINs to fill conventional gaps. Instead, biodiesel and renewable diesel are perceived to be the only viable options for filling the expected conventional gaps.

Hybrid Yeast to Give Rise to Better Biofuel Production

galls_beech_tree10_4536Researchers in Wisconsin, a state already known for its good use of yeast for the brewing of beer, are developing yeast hybrids that would also help in biofuels production. This article from the University of Wisconsin says the scientists at the school continue to find more strains suited for the green fuel making.

“We can achieve hybrids at rates of one in a thousand cells,” notes William Alexander, a University of Wisconsin-Madison postdoctoral research associate and the lead author of a paper describing the new method in a special synthetic biology issue of the journal Fungal Genetics and Biology. “It is much more efficient than nature.”

There are hundreds of known species of yeasts and they occupy almost every ecological niche imaginable worldwide. They are essential to the process of fermentation, where the microbes convert sugars to alcohol and carbon dioxide. Yeasts are used widely to not only make beer, wine and bread, but also cider, whiskey, cheese, yogurt, soy sauce and an array of other fermented foods and beverages. In industry, yeasts are used to produce biofuels and to make enzymes, flavors and pigments and even drugs such as human insulin.

An ability to quickly and efficiently churn out new yeast interspecies hybrids means industries that depend on yeasts will have many more organisms to experiment with to make new flavors, enhance production and produce entirely new products, explains Chris Todd Hittinger, a UW-Madison professor of genetics and the senior author of the new study…

The new yeast hybridization method uses plasmids, circles of DNA that can be built into an organism to confer a genetic quality. In the lab, plasmids are routinely used to manipulate genes in cells. Genes in the plasmids facilitate yeast hybridization by expressing a naturally occurring yeast protein that allows two distinct species of yeasts to mate.

“The advantages of the technique are speed, efficiency, and precision,” says Hittinger, a world authority on yeast genetics and a co-discoverer of the wild Patagonian yeast that formed the lager beer hybrid. “Within a week, you can generate a large number of hybrids of whatever two species you want, creating forms never seen before.”

Funding for the research comes from grants from the National Science Foundation and the Department of Energy through the Great Lakes Bioenergy Research Center.

China Top Customer for US Ethanol Exports

growth-exportsChina is America’s best customer when it comes to buying ethanol exports. Government numbers show October ethanol exports totaled 70.1 million gallons (mg), up 16 percent from September levels, making China for the first time ever the biggest importer of U.S. ethanol. This analysis from the Renewable Fuels Association’s Ann Lewis says Canada was the second-leading destination in October, but shipments were about one-third lower than September at 20.1 mg (29 percent of total exports).

The Philippines brought in 9.8 mg of U.S. product, while other key importers included South Korea (4.1 mg), Jamaica (1.5 mg) and Singapore (1.1 mg). Once again, Brazil completely disappeared from the U.S. export market. Total year-to-date ethanol exports for the United States are 695.0 mg—4% more than this time last year. Year-to-date shipments indicate an annualized rate of exports of 834 mg.

October exports of undenatured fuel ethanol tallied 19.5 mg, down 42% from September. The Philippines (9.8 mg) pulled in half of the product, with South Korea (4.0 mg), China (2.6 mg) and four others picking up the rest. Meanwhile, October exports of denatured fuel ethanol doubled to 47.0 mg, primarily split between China (29.9 mg) and Canada (17.1 mg). It was the largest monthly total of the year for denatured fuel ethanol exports.The United States exported 3.6 mg of undenatured and denatured ethanol for non-fuel, non-beverage use, up 17% from September. Most product crossed our borders to Canada (3.0 mg, or 92%) and Mexico (250,036 gallons, or 7%).

U.S. ethanol imports dropped to 5.5 mg in October, down from the September volume of 24.9 mg. Year-to-date U.S. imports of ethanol hit 63.2 mg—lagging behind last year’s cumulative volume at this point. The U.S. has now realized its 26th month as a net exporter.

Meanwhile, exports of the animal feed ethanol by-product, distillers dried grains with solubles (DDGS), were down for the third straight month after hitting record highs in July, falling 7 percent to 1.03 million metric tons (mt), still considered a substantial number. While there was a 24 percent drop in exports of DDGS to China, Mexico (164,314 mt, or 16 percent), Viet Nam (88,305 mt, or 9 percent), Canada (52,623 mt), Turkey (52,498 mt) and South Korea (46,159 mt) all saw increases.

Global RFA Urges COP21 to Support Biofuels

global-rfaAs world leaders continue to meet in Paris for the United Nations Climate Change Conference (COP 21), the Global Renewable Fuels Alliance (GRFA) is asking them to signal their support for biofuels as one of the tools to fight climate change.

“This conference is a real opportunity for world leaders to recognize the role that renewable fuels have played, and will continue to play, in the transition to a low-carbon global economy,” said GRFA president Bliss Baker. “The climate problem is accelerating and biofuels represent one of the most cost-effective solutions to reduce oil use and greenhouse gas emissions from transport in the short and medium term.”

So far, 36 countries have already recognized the opportunity presented by biofuels in reducing GHG emissions and combating climate change, and have included them in their Intended Nationally Determined Contributions (INDC) plans. Studies have shown that most biofuels, like ethanol, are proven to reduce harmful GHGs from 40% to 90% compared to fossil fuels around the world.

“Given the significant contribution biofuel is making in reducing global GHG emissions today, we believe COP 21 participants should call for an increase in biofuel use through the introduction of supportive policies, particularly for advanced biofuels,” concluded Baker.

RFA Announces E85Prices.com Contest

Users of the popular fuel market website E85prices.com can not only find where the cheapest 85% ethanol is being sold near them, they also have a chance to get it for free.

e85-pricesThe Renewable Fuels Association (RFA) has announced a new contest for E85Prices.com users to win free E85. Each month, RFA will draw one random user from those that have submitted E85 price experiences during the past month and reward them with a $100 E85 fuel card. The more users submit prices, the better chance they have of winning.

“We want to drive consumers to the website in order to capture more data and reward them for doing just that,” said Robert White, RFA’s vice president of industry relations. “Data has never been more important for expanding retail availability of higher ethanol blends and defending the Renewable Fuel Standard against the ‘blend wall’ rhetoric. This new effort will help ensure that our station database and associated price reports are the most accurate possible.”

RFA purchased E85prices.com in February and has since released a new version of the website and the associated mobile app. Users can submit prices for all blends of ethanol like E15 and E30, but must always submit prices for E85 and regular unleaded.

Existing users do not need to do anything new in order to qualify. Non-users need to register at www.E85prices.com and submit your pricing experiences.

RFA Offers Webinars on International Buyer Program

NEC 2016aThe Renewable Fuels Association is offering two free webinars next week for ethanol producers to learn more about the International Buyer Program that will be part of the 2016 National Ethanol Conference, February 15-17 in New Orleans.

The National Ethanol Conference (NEC) has been selected to be a participant of the U.S. Department of Commerce International Buyer Program, which recruits pre-screened foreign buyer delegations and brings them to selected trade shows and conferences to allow U.S. companies to connect with international buyers. International trade specialists will be at the International Trade Center onsite at the NEC to provide export counseling, matchmaking services, market analysis and more. The registration deadline for U.S. exporters to participate in the IBP is December 31, 2015.

The webinars will provide an overview of benefits to U.S. companies under the International Buyer Program, as well as market insights including demand, policies, and key players. They will also give information on how to register for the Exporter Interest Directory that will be distributed to the international buyers.

The webinar topics, dates and times are:

Ethanol Opportunities in Asian Markets, including Philippines, China, and India
Monday, December 7
Free registration link

Ethanol Opportunities in Latin American Markets, including Brazil and Mexico
Tuesday, December 15
Free registration link

Any U.S. ethanol company interested in exporting product overseas or expanding sales to new markets is encouraged to learn more in the webinars and register for the IBP.

Funds Available for Blender Pumps in Iowa

blender-pump-iowaIowa Secretary of Agriculture Bill Northey today announced that funds are now available through the new “Fueling Our Future 100” initiative and interested retailers in Iowa can apply for cost share funding to assist with the purchase and installation of blender pumps and underground storage tank (UST) infrastructure for higher blends of ethanol.

“We continue to see that when consumers have a choice at the pump they will choose to increase the amount of clean burning, homegrown renewable fuels they use,” said Northey. “Through this program we will see a total investment of $10 million to help build the renewable fuels infrastructure in the state.”

Iowa received a $5 million grant from the USDA Biofuel Infrastructure Partnership (BIP) program to support the initiative which will be matched by non-federal funds, including $2.5 million from the Iowa Renewable Fuels Infrastructure Program (RFIP). The fueling sites applying for assistance will also be required to provide a minimum of $2.5 million.

“Thanks to the USDA’s blender pump program, Iowans will now be able to benefit from the wider availability of E15 and E85,” said Iowa Renewable Fuels Association Managing Director Lucy Norton. “More blender pumps in Iowa means more competition at the pump, resulting in even lower fuel prices, better air quality and stronger energy security.”

ProtecFuel and the IRFA will be hosting a free retailer workshop on Monday, December 7 from 10:00 a.m. to 2:00 p.m. to assist retailers in understanding and applying for grant funding. For more information and to register for the free retailer workshop, please visit: www.IowaRFA.org/ProtecWorkshop.

Midwest Renewable Energy to use Enogen® corn

Enogen logoSyngenta has signed an agreement with Midwest Renewable Energy to begin using Enogen® corn enzyme technology at its Sutherland, Nebraska ethanol production facility beginning with the 2016 planting season.

“The agreement with MRE will enable them to source alpha amylase enzyme directly from local growers and keep enzyme dollars in the local community,” said Chris Tingle, head of marketing for Enogen at Syngenta. “This is what truly sets Enogen corn apart from other technologies designed to enhance ethanol production. It adds significant incremental value at the local level for communities that rely on their ethanol plant’s success.”

Midwest Renewable Energy operates a 28 million gallons per year dry-mill ethanol plant and CEO Jim Jandrain says the opportunity to invest locally is a key benefit of using Enogen grain. “We look forward to purchasing alpha amylase in the form of high-quality grain directly from local corn growers,” Jandrain said. “When you think about the value that Enogen will deliver for our growers, our facility and our community, it’s a win-win-win scenario.”

Syngenta is now contracting Enogen with growers to support 18 ethanol plants in seven states, representing approximately 1.3 billion gallons of ethanol capacity. Enogen corn is expected to generate approximately $29 million of additional revenue for local growers in 2016 through per-bushel premiums.

Oilseeds, Corn Rise on Biodiesel, Ethanol Numbers

CBOTFutures prices for oilseeds, such as soybeans, as well as the price of corn rose after the federal government’s announcement on the amount of biodiesel and ethanol to be blended into the nation’s fuel supply. This report from Nasdaq says soybean prices rose to a five-week high, while corn prices also saw some gains.

Buying in the soybean-oil market also propped up oilseeds, analysts said. Soybean oil prices rose 2.3% on Tuesday, supported in part by the release Monday of the U.S. Environmental Protection Agency’s annual targets for how much biofuel must be mixed into the nation’s fuel supply. The federal agency raised its volume requirements, suggesting more soyoil will be needed to meet biodiesel goals.

The final EPA mandates “indicate that a lot of soybean oil will be used to make biodiesel next year, so people are all bulled up on that,” said Terry Reilly, an analyst with brokerage Futures International LLC in Chicago.

Soybean futures for January delivery rose 8 1/4 cents, or 0.9%, to $8.89 1/4 a bushel at the Chicago Board of Trade, the highest closing price since Oct. 27.

Corn prices rose to a one-week high, boosted by investor short covering, which comes after prices tumbled in November. Corn prices also were supported by EPA’s ruling, which increased blending requirements for ethanol and prompted hopes for increased corn demand, the main feedstock in the biofuel.

“Corn traders figured the EPA announcement was friendly,” said Mr. Reilly.

More #Ethanol Groups Disappointed with #RFS Rule

While ethanol industry representatives agree that the EPA final rule for volume obligations under the Renewable Fuel Standard is an improvement, most still are disappointed.

aceAmerican Coalition for Ethanol (ACE) Executive Vice President Brian Jennings says the final rule protects the oil industry from meeting the requirements that Congress intended.

“When Congress enacted the Renewable Fuel Standard it voted to side with those of us who said ‘yes we can’ reduce greenhouse gas emissions from motor fuel, ‘yes we can’ allow consumer access to E15 and flex fuels, and ‘yes we can’ spark innovative ways to produce cleaner fuels,” said Jennings. “While we appreciate that the Administration made incremental improvements compared to the proposed RFS rule, unfortunately, today they are choosing to side with those who say ‘no, we can’t’. Regrettably, EPA’s final RFS rule protects the old way of doing business by obstructing consumer access to cleaner fuels, stifling competition in the marketplace, and undermining innovation.”

Iowa RFA logo-newIowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw says the final rule is a blow to farmers and fuel choice for consumers. “Given EPA’s stated rationale for these numbers, one of the most successful energy policies in our nation’s history has been put squarely in the stranglehold of the petroleum industry,” said Shaw. “As a result, consumers will see higher prices at the pump and Iowa farmers will likely continue to see commodity prices below the cost of production.”

Iowa has 43 ethanol refineries capable of producing 3.9 billion gallons annually, including nearly 55 million gallons of annual cellulosic ethanol production capacity.

NEB logoNebraska Ethanol Board administrator Todd Sneller, who is also chairman of the Clean Fuels Development Coalition, called the final rule “disappointing but not unexpected” and said it means biofuels must move beyond government imposed limits and establish new value based on performance and environmental benefits. “The RFS was, and remains, a foundation to provide a solid base for biofuels to continue to develop,” Sneller said. “All this means is EPA will limit the amount of biofuels they intend to manage under this particular program. Ethanol’s high octane and cleaner-burning properties make it an extremely valuable fuel and we expect increasing demand for those reasons.”

“Our challenge and wake-up call is to provide a valuable product that does not depend on levels established by the EPA,” said Doug Durante, CFDC executive director. Although the EPA has chosen to limit the amount of fuels like ethanol under the RFS, Durante says the EPA could choose to increase biofuel demand by limiting toxic compounds in gasoline, which the agency is required to do under the Clean Air Act.

AESI logoFormer United States Senator and Americans for Energy Security and Innovation (AESI) Chairman Jim Talent said that this midterm modification to the RFS flies in the face of the intent of Congress when it passed the law, and says the President is saying that if oil companies refuse to comply with the law, then the EPA can waive the obligation.

Talent added, “It is clear that the Obama Administration and Democrats have once again abandoned Rural America by finalizing a new rule that undermines the Renewable Fuel Standard and threatens the 850,000 well-paying American jobs that have been created by this successful law. With billions invested in this industry thus far, the Obama Administration’s new lackluster standards threaten the already frozen $13.7 billion in investments in advanced biofuels and discourage new investments in clean energy.