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    Brasil Ecodiesel, the leading Brazilian biodiesel producer company, recorded an increase of 57.7% in sales in the third quarter of the current year, in comparison with the previous three months. Sales volume stood at 53,000 cubic metres from August until September, against 34,000 cubic metres of the biofuel between April and June. The company is also concluding negotiations to export between 1,000 to 2,000 tonnes of glycerine per month to the Asian market. ANBA - October 4, 2007.

    PolyOne Corporation, the US supplier of specialised polymer materials, has opened a new colour concentrates manufacturing plant in Kutno, Poland. Located in central Poland, the new plant will produce colour products in the first instance, although the company says the facility can be expanded to handle other products. In March, the Ohio-based firm launched a range of of liquid colourants for use in bioplastics in biodegradable applications. The concentrates are European food contact compliant and can be used in polylactic acid (PLA) or starch-based blends. Plastics & Rubber Weekly - October 2, 2007.

    A turbo-charged, spray-guided direct-injection engine running on pure ethanol (E100) can achieve very high specific output, and shows “significant potential for aggressive engine downsizing for a dedicated or dual-fuel solution”, according to engineers at Orbital Corporation. GreenCarCongress - October 2, 2007.

    UK-based NiTech Solutions receives £800,000 in private funding to commercialize a cost-saving industrial mixing system, dubbed the Continuous Oscillatory Baffled Reactor (COBR), which can lower costs by 50 per cent and reduce process time by as much as 90 per cent during the manufacture of a range of commodities including chemicals, drugs and biofuels. Scotsman - October 2, 2007.

    A group of Spanish investors is building a new bioethanol plant in the western region of Extremadura that should be producing fuel from maize in 2009. Alcoholes Biocarburantes de Extremadura (Albiex) has already started work on the site near Badajoz and expects to spend €42/$59 million on the plant in the next two years. It will produce 110 million litres a year of bioethanol and 87 million kg of grain byproduct that can be used for animal feed. Europapress - September 28, 2007.

    Portuguese fuel company Prio SA and UK based FCL Biofuels have joined forces to launch the Portuguese consumer biodiesel brand, PrioBio, in the UK. PrioBio is scheduled to be available in the UK from 1st November. By the end of this year (2007), says FCL Biofuel, the partnership’s two biodiesel refineries will have a total capacity of 200,000 tonnes which will is set to grow to 400,000 tonnes by the end of 2010. Biofuel Review - September 27, 2007.

    According to Tarja Halonen, the Finnish president, one third of the value of all of Finland's exports consists of environmentally friendly technologies. Finland has invested in climate and energy technologies, particularly in combined heat and power production from biomass, bioenergy and wind power, the president said at the UN secretary-general's high-level event on climate change. Newroom Finland - September 25, 2007.

    Spanish engineering and energy company Abengoa says it had suspended bioethanol production at the biggest of its three Spanish plants because it was unprofitable. It cited high grain prices and uncertainty about the national market for ethanol. Earlier this year, the plant, located in Salamanca, ceased production for similar reasons. To Biopact this is yet another indication that biofuel production in the EU/US does not make sense and must be relocated to the Global South, where the biofuel can be produced competitively and sustainably, without relying on food crops. Reuters - September 24, 2007.

    The Midlands Consortium, comprised of the universities of Birmingham, Loughborough and Nottingham, is chosen to host Britain's new Energy Technologies Institute, a £1 billion national organisation which will aim to develop cleaner energies. University of Nottingham - September 21, 2007.

    The EGGER group, one of the leading European manufacturers of chipboard, MDF and OSB boards has begun work on installing a 50MW biomass boiler for its production site in Rion. The new furnace will recycle 60,000 tonnes of offcuts to be used in the new combined heat and power (CHP) station as an ecological fuel. The facility will reduce consumption of natural gas by 75%. IHB Network - September 21, 2007.

    Analysts fear that record oil prices will fuel general inflation in Kenya, particularly hitting the poorest hard. They call for the development of new policies and strategies to cope with sustained high oil prices. Such policies include alternative fuels like biofuels, conservation measures, and more investments in oil and gas exploration. The poor in Kenya are hit hardest by the sharp increase, because they spend most of their budget on fuel and transport. Furthermore, in oil intensive economies like Kenya, high oil prices push up prices for food and most other basic goods. All Africa - September 20, 2007.

    Finland's Metso Power has won an order to supply Kalmar Energi Värme AB with a biomass-fired power boiler for the company’s new combined heat and power plant in Kalmar on the east coast of Sweden. Start-up for the plant is scheduled for the end of 2009. The value of the order is approximately EUR 55 million. The power boiler (90 MWth) will utilize bubbling fluidized bed technology and will burn biomass replacing old district heating boilers and reducing the consumption of oil. The delivery will also include a flue gas condensing system to increase plant's district heat production. Metso Corporation - September 19, 2007.

    Jo-Carroll Energy announced today its plan to build an 80 megawatt, biomass-fueled, renewable energy center in Illinois. The US$ 140 million plant will be fueled by various types of renewable biomass, such as clean waste wood, corn stover and switchgrass. Jo-Carroll Energy - September 18, 2007.

    Beihai Gofar Marine Biological Industry Co Ltd, in China's southern region of Guangxi, plans to build a 100,000 tonne-per-year fuel ethanol plant using cassava as feedstock. The Shanghai-listed company plans to raise about 560 million yuan ($74.5 million) in a share placement to finance the project and boost its cash flow. Reuters - September 18, 2007.

    The oil-dependent island state of Fiji has requested US company Avalor Capital, LLC, to invest in biodiesel and ethanol. The Fiji government has urged the company to move its $250million 'Fiji Biofuels Project' forward at the earliest possible date. Fiji Live - September 18, 2007.

    The Bowen Group, one of Ireland's biggest construction groups has announced a strategic move into the biomass energy sector. It is planning a €25 million investment over the next five years to fund up to 100 projects that will create electricity from biomass. Its ambition is to install up to 135 megawatts of biomass-fuelled heat from local forestry sources, which is equal to 50 million litres or about €25m worth of imported oil. Irish Examiner - September 16, 2007.

    According to Dr Niphon Poapongsakorn, dean of Economics at Thammasat University in Thailand, cassava-based ethanol is competitive when oil is above $40 per barrel. Thailand is the world's largest producer and exporter of cassava for industrial use. Bangkok Post - September 14, 2007.

    German biogas and biodiesel developer BKN BioKraftstoff Nord AG has generated gross proceeds totaling €5.5 million as part of its capital increase from authorized capital. Ad Hoc News - September 13, 2007.

    NewGen Technologies, Inc. announced that it and Titan Global Holdings, Inc. completed a definitive Biofuels Supply Agreement which will become effective upon Titan’s acquisition of Appalachian Oil Company. Given APPCO’s current distribution of over 225 million gallons of fuel products per year, the initial expected ethanol supply to APPCO should exceed 1 million gallons a month. Charlotte dBusinessNews - September 13, 2007.

    Oil prices reach record highs as the U.S. Energy Information Agency releases a report that showed crude oil inventories fell by more than seven million barrels last week. The rise comes despite a decision by the international oil cartel, OPEC, to raise its output quota by 500,000 barrels. Reuters - September 12, 2007.

    OPEC decided today to increase the volume of crude supplied to the market by Member Countries (excluding Angola and Iraq) by 500,000 b/d, effective 1 November 2007. The decision comes after oil reached near record-highs and after Saudi Aramco announced that last year's crude oil production declined by 1.7 percent, while exports declined by 3.1 percent. OPEC - September 11, 2007.

    GreenField Ethanol and Monsanto Canada launch the 'Gro-ethanol' program which invites Ontario's farmers to grow corn seed containing Monsanto traits, specifically for the ethanol market. The corn hybrids eligible for the program include Monsanto traits that produce higher yielding corn for ethanol production. MarketWire - September 11, 2007.

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Thursday, September 27, 2007

UK's D1Oils continues to expand jatropha plantations globally

In its interim report [*.pdf] for 2007, D1 Oils, the only truly global biofuel company, shows it keeps expanding its Jatropha curcas plantations in India, South East Asia and Africa. For the first time, it is entering South America, while it is exploring Australia's agro-ecological potential for the crop. However, the Jatropha oil is not yet on the market, so D1Oils is temporarily utilizing other feedstocks for its 42,000 tonne biodiesel plant in Teesside. High prices for these feedstocks combined with competition from subsidised US biodiesel exports have more than doubled D1Oils' first-half pre-tax loss. Both problems are described as 'short term' challenges because the much less costly Jatropha oil is set to flow soon and the EU is taking action against the US's 'illegal' export subsidies (the socalled B99 loophole, more here). Jatropha remains a wild crop, but an ongoing plant improvement and molecular breeding programme promises to result in the emergence of high-yielding cultivars.

In June, D1Oils created a joint-venture with BP, D1-BP Fuel Crops Limited, to create a global Jatropha business (earlier post). The establishment of D1-BP Fuel Crops was a significant endorsement of the new feedstock strategy, which relies on the comparative advantages of developing countries that will grow the crop and the rural communities where planting will be based. The new joint venture, with an oil major choosing to produce biofuel feedstocks in the developing world, also represents a turning point for biodiesel globally.

Planting programme
Up to 15 September 2007, D1 has planted or obtained rights to offtake from a total of 198,690 hectares of jatropha worldwide. This represents an increase of over 53,000 hectares on the total of 145,625 at 16 March 2007 and an increase of 23,609 hectares on the total of 175,081 hectares at 30 June 2007. The cumulative position at 15 September 2007 is summarised in the table below (click to enlarge):

The table indicates the broad geographic locations and types of arrangements associated with jatropha planting worldwide in which D1 has an interest. The level of investment costs and security of future oil supply are proportional to the degree of direct involvement by D1 and its joint venture partners.

Managed plantations are those farms where land and labour is held by D1, either through its subsidiaries or joint venture partners. Under contract farming, the farmer plants his own trees on his own land. D1 and its partners assist with the provision of seedlings and the arrangement of bank finance for planting, and offer a buyback of harvested grains with an offtake agreement, subject to a floor price and the achievement of agreed quality standards.

D1 Oils provides support and advice during cultivation, and monitors the condition of the crops. Seed and oil supply agreements are arms-length supply contracts with third parties whereby D1, either directly or through joint venture partners, has offtake arrangements in place over future output from jatropha plantations which the third party is developing. D1 has limited involvement in this planting and relies on third parties to measure and manage the crop effectively.

During the period D1Oils continued to develop planting partnerships and expand planting footprint across all three operating regions. A joint venture relationship in North East India with Williamson Magor, one of India’s leading tea companies, has been particularly successful. Ongoing planting of jatropha is now approaching 50,000 hectares:
:: :: :: :: :: :: :: :: ::

Two Memoranda of Understanding (MOU) were recently signed in Indonesia. The first, with PT Astra Agro Lestari, part of the Jardine Matheson Group and the largest publicly traded agribusiness in Indonesia, concerns the creation of a 500 hectare Jatropha curcas pilot plantation, planting of which is planned to start in Q4 2007. Once the pilot is successful, the relationship will then turn to commercial planting. The second, a tripartite MOU between D1 Oils Asia Pacific, PT Medco Energi International, a publicly listed integrated energy company, and PT Mambruk Sarana Interbuana, a pioneer of solar energy in Indonesia, is for a 500 hectare pilot plantation in West Java. Planting operations here will commence in Q4 2007 with the intention to expand to 10,000 hectares.

In a key development for planting operations in South Africa, D1 is working together with the South African Government to establish the first commercial level jatropha pilot project in that country. The initial plantation size will be 5,000 hectares of which 1,000 hectares is expected to be planted in the first year. Planting will be carried out by D1 in co-operation with the Central Energy Fund, the Department of Agriculture and a commercial farming concern made up of both black and white farmers.

The project is intended to determine economic feasibility and will be used as a model for commercial jatropha planting in South Africa.

In addition to continuing planting in Africa, India and South East Asia, D1-BP Fuel Crops will expand planting to new, emerging markets, in particular South America. To this end D1 has signed a strategic partnership agreement with a Brazilian group, Curcas Diesel Brazil, to develop jatropha plantation projects throughout that country.

In the medium term, D1Oils believs that Australia has potential as a production location for jatropha and we are in active dialogue with the relevant Federal and State authorities regarding permission to import seeds and begin the first controlled trials for commercial planting of Jatropha curcas.

Plant improvement
D1Oils continued to collect individual accessions of Jatropha curcas from around the globe, and we began putting the most promising varieties from an already significant collection through the first ever commercial breeding and product placement trials.

These trials will identify optimal adaptation to different cultivation conditions. continued the development of our breeding programme to create the first cultivars
for future selection of high-yielding varieties. D1Oiuls also added two further Regional Development Centres (RDCs) in Swaziland and Thailand respectively.

Multiplication of the first generation, selected seed material, referred to as ‘E1’, was begun in all three operating regions. This seed material has been selected for higher yield and good biodiesel profile.

During the period, the company also introduced its Sustainable Oil Supply Programme (SOSP), in co-operation with our joint venture partners and farmers. This stewardship programme will record the performance of planting, enable the development of accurate oil production forecasts and will also monitor the implementation of policies for social, economic and environmental sustainability.

As a result of the formation of its joint venture with BP, D1’s plant science programme has been established as a separate company, wholly owned by D1 Oils plc. The activities of this new company will comprise research and development, plant science, breeding, and production and multiplication of seed and seedlings. It will act as the exclusive supplier to D1-BP Fuel Crops, the planting joint venture, on a cost-plus basis, of selected, high-yielding jatropha seeds and seedlings. It will also provide technical agronomy support and expertise to support and implement the SOSP programme. D1-BP Fuel Crops will pay D1 an annual royalty fee for the high yield performance by the plants it supplies.

Plant science operations to support the joint venture are on track. D1Oils anticipates that a proportion of the first of the selected E1 seedlings will be available before the end of this year. It is the intention to plant 50,000 hectares with E1 seedlings in 2008. The company expects to plant out the first 5-10% of this total ahead of schedule in 2007.

Furthermore, D12Oils is expanding research and testing infrastructure in anticipation of the growth in business from the joint venture. New Development Centres are being established in Cape Verde (as a central facility), as well as Indonesia and other countries where D1-BP Fuel Crops will operate, enabling D1 to support fully the joint venture’s planting activities.

A significant development is the recent signing of an exclusive worldwide service agreement with Keygene NV of the Netherlands. Keygene is one of the global leaders in the science of genetic fingerprinting, in particular molecular markers and marker-assisted breeding approaches. The agreement provides D1 with exclusive rights to contract research and molecular services carried out by Keygene on jatropha. Keygene’s genetic fingerprinting technology enables the identification of different jatropha cultivars through genetic markers similar to commercial bar codes. The technology has the potential to increase significantly the effectiveness of D1’s breeding programme for jatropha.

In addition to focusing on jatropha, D1Oils keeps to investigating other inedible oil crops.

Trading and biodiesel production
D1Oils' activities in refining and trading have been impacted by the ongoing challenges of high feedstock prices exacerbated by subsidised biodiesel imports from the United States. Refining margins across the industry have come under increasing pressure, and already in February 2007 D1Oils announced its intention to run refineries below capacity and to manage stocks of vegetable oil previously purchased at lower prices.

There has been no improvement in the overall level of feedstock prices (in fact they have continued to increase), and, having processed existing stocks, D1Oils is no longer refining virgin oil. However, the company is taking advantage of the flexibility and precision of its modular D1 20 refinery units to refine parcels of “off-spec” material purchased from other suppliers.

During the period the biofuel company increased the capacity of its Teesside site with the addition of a fifth D1 20 refinery unit. This is the first upgraded D1 20 units and has an enhanced capacity of 10,000 tonnes per year. Final commissioning is now underway, increasing the production capacity of the Teesside site to 42,000 tonnes.

Having completed the acquisition of a site in Bromborough, D1Oils began the conversion of the existing facilities, which formerly produced fuel and lubricant additives, to create 100,000 tonnes of initial biodiesel refining capacity. Given market conditions, the company has slowed the timetable for commissioning the first 50,000 tonnes of this capacity, which will be completed shortly.

D1 Oils is studying the potential impacts of the UK's Renewable Transport Fuels Obligation (RTFO) on the UK market after April 2008. It expects the RTFO to have a positive impact on trading conditions for UK biodiesel refining, but believes this benefit is likely to be counterbalanced by both higher feedstock prices and the continuation of subsidised soya methyl ester imports from the USA, which are entering the EU market in the form of a 99% soya biodiesel and 1% mineral diesel blend; so-called B99.

US producers are currently eligible for subsidies of US$1 for every gallon (approximately 11 pence per litre) of biodiesel blended with mineral diesel, which then receives further subsidy in EU markets. As a result, this material is setting market prices in the EU and refinery margins are substantially eroded.

The European biodiesel industry is working to get the EU authorities in taking the necessary measures to end the eligibility of US imports for double taxation relief. Unless the B99 taxation “double dip” issue is addressed, it will be difficult for the EU to develop a robust biodiesel refinery industry and for UK refiners to supply motorists and road transport businesses under the RTFO.

Until commercial volumes of low-cost jatropha oil become available for UK refining, D1Oils is purchasing and selling modest quantities of B99 to enable us to meet its obligations to clients and to develop our supply chain. It will continue to do so until the issue of asymmetric subsidies is resolved or feedstock prices reduce.

D1Oils: D1 Oils plc Interim report 2007 [*.pdf] - September 2007.


John J Johns said...

From all the articles I have read on D1 Oils it seems that they are full of bull. Where are all these projects they profess to have. Where is oil the oil they profess to be producing. Where are all the..........
Let's get them to come clean.
John J Johns

9:40 AM  

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