Change is on the way for the ethanol industry… and it could be quite dramatic. That word comes from a leading biofuels venture capitalist, and this story in the Des Moines Register says it could lead to more plants being owned by fewer and bigger investors:
Sano Shimoda of BioScience Securities Inc. in Venice, Calif., said at the first Renewable on Parade conference that investors who put their money into ethanol five years ago are smiling now because they profited from a surge in ethanol demand that led to skyrocketing high prices.
Ethanol plants that survive the coming shakeout will have to be low-cost producers that are vertically integrated to take advantage of access to raw materials, Shimoda said.
He said biofuels such as ethanol need to build their future on being market-driven industries that can survive without subsidies or protectionist tariffs.
“Bioethanol will be sustainable only if costs are driven to levels that support market-driven demand without the need for long-term subsidies,” Shimoda said. “All I’m saying is that you have to get costs down. If not, you’re not viable.”
Shimoda predicts squeezed profit margins will lead to a market consolidation, and most single plants won’t survive except for the ones that are low-cost producers. He adds the ethanol production costs must be targeted to compete if oil prices drop to $25 a barrell… that way, when they stay higher, the plants will still be profitable.
A paper critical of world ethanol production, written by the chair of the Round Table on Sustainable Development at the Organization for Economic Cooperation and Development (OECD)… but not officially the view of the OECD… has been blasted by the leaders of the European Bioethanol Fuel Association (eBio) and the Renewable Fuels Association (RFA). Those biofuels leaders are asking the OECD to disavow the paper issued last week. Part of the criticism centers on the media’s portrayal of the paper as the official position of the OECD.
“Specifically and just as disturbingly, this potentially unauthorized document fails to make its case, is highly one-sided and seemingly conflicts with previous OECD positions supporting biofuels as a component in reducing CO2 gases. In short, whether deliberate or not, the OECD’s imprimatur is on this document and it is the OECD that must now be accountable for what is a biased assessment of expanding the worldwide production and consumption of renewable biofuels. We respectfully, but urgently, request that OECD specifically disavow this report as not reflecting the official policy of the organization.”
University of Colorado officials have been experimenting with burning biodiesel in their campus mass transit system buses… the Buff Buses… and the results have been pretty “buff” in their own right.
USDA Rural Development officials have announced that 345 proposals in 37 states have been tapped to get about $18.2 million for renewable energy and energy efficiency projects.
“These funds will help create economic opportunity and reduce energy costs for farmers, ranchers and small businesses in rural communities,” [Under Secretary for Rural Development Thomas] Dorr said. “Our renewable energy programs have a significant impact on creating jobs and investment opportunities and maintaining financially viable communities.” 
Biodiesel was one of the stars at this year’s Wisconsin Farm Tech Days as the state’s biodiesel industry also pushes the green fuel as the source of energy for this year’s harvest.
“Promoting the use of biodiesel to Wisconsin farmers is a bit like taking coal to Newcastle,” says Pieterick. “The Wisconsin Soybean Association and others in the state ag industry understand biodiesel and have historically promoted the home grown fuel as a value-added agricultural product that supports this nation’s energy independence.”
Cellulosic ethanol leader Verenium will present at two upcoming conferences… one on biofuels and one on life sciences… next week in New York City.
Carlos A. Riva, President and Chief Executive Officer of Verenium, will be presenting at the UBS Global Life Sciences Conference. The presentation is scheduled to begin at 11:00 a.m. ET on Thursday, September 27, 2007 and will take place at the Grand Hyatt in New York City. 
Europe is well behind the United States in biofuels production and use, but the European Commission is moving ahead with its plans to have biofuels make up ten percent of transport fuels by the year 2020, according to the Commission’s spokesman for agriculture and rural development Michael Mann who says this is a fairly modest. “We’ve also set that some of that will have to come from imports and we will also favor in the long term second generation biofuels,” Mann told ag journalists in Brussels last week on a trip sponsored by 
According to Mann, the EU has incentives for rural development of biofuels refineries in place, which are actually grants. “Developing biofuels plants is something you can receive a grant for from rural development funding.” In addition, there is a tariff in place for ethanol imports to the EU and there are incentive payments for farmers to produce crops for biofuels production which was introduced in 2003. “If you have a contract with a biofuel producer to produce the raw materials for biofuel, you can get an extra 45 euros per hectare on that land.”
Buses in Toledo could get a dash more power with a dash of hydrogen along with the biodiesel they’re burning.