Biodiesel in the news

Honda develops new way to make biofuel that could boost environmentally friendly cars
Shell opposes biofuel quotas
Giant, BP React to Ethanol, Biodiesel Plan
Biodiesel to drive up the price of cooking oil
Combating the Glycerin Glut

News in detail

Honda develops new way to make biofuel that could boost environmentally friendly cars By Associated Press
PTOKYO (AP) -- Honda Motor Co. has developed a way to make ethanol fuel from plant waste matter in a process that has the potential to expand the use of biofuels that fight global warming, the Japanese automaker said Thursday.
Existing bio-ethanol production faces supply limits because it uses sugar and starch of sugarcane or from corn, both of which are also utilized as food. By tapping far greater supplies of inedible plant matter, such as stalks, leaves and rice straw, the new fuel takes a step toward making biofuels more practical, Tokyo-based Honda said in release.
The breakthrough comes as automakers look for alternatives to petroleum-based fuels that will not release greenhouse gases that fan global warming. Surging oil prices have also spurred companies to develop new fuels that may be cheaper and not as prone to supply disruptions.
''Expansion of biomass utilization holds enormous potential as a major step forward toward the realization of an energy sustainable society,'' Honda said.
Honda developed the technology with Honda R&D Co. and the Kyoto-based Research Institute of Innovative Technology for the Earth. The process uses a special microorganism to better convert sugars in the plant matter to alcohol, and another step that then boosts the efficiency of the conversion.
The partners plan to work next on a refinery that can produce not only ethanol, but other industrial compounds from plant matter.


Shell opposes biofuel quotas(20/09/06)

Oil giant Shell is warning that government biofuel proposals would lead to increases of at least 5 cents per litre on petrol and diesel and result in New Zealanders paying an extra $300 million per annum for their fuel.

The government has put out a discussion paper which proposes introducing compulsory biofuel sale quotas for oil companies.

These would start at 0.25 per cent of sales in 2008, and rise to 2.25 per cent by 2012.

But Shell says that meeting the proposed minimum sales requirements would require major infrastructure modifications, including changes to fuel storage facilities and petrol stations throughout New Zealand, and these would have to be carried out over a short period of time.

Shell says the cost of sourcing fuel would also increase as a result of the need to import biofuels or rely on a small domestic manufacturing base.

According to Shell, the best way to encourage biofuel use in New Zealand is to create incentives to support the development of next generation low-carbon, low-cost biofuel manufacturing technologies.

It says this will help to make biofuels competitive with conventional fuels and support speedy acceptance by the consumer and businesses alike.

Biofuels are renewable fuels that have the potential to produce lower carbon dioxide emissions than conventional fuels and are currently made primarily from food crops and animal waste bi-products (tallow).

The two main types of biofuel are bioethanol (blended with petrol) and biodiesel (blended with diesel).

The government's discussion paper on Biofuel is online at:


Giant, BP React to Ethanol, Biodiesel Plan(11/09/06) By Lisa Meerts, The Daily Times - Link to Story
Vehicles in the U.S. will run on more vegetable-produced gasoline under an Environmental Protection Agency proposal released Thursday. But the strategy, designed to reduce emissions and dependence on foreign oil, creates a crop of considerations.

The EPA claims the Renewable Fuels Standards Program, which begins next year following a public comment period that ends in November, will cut petroleum use by about 3.9 billion gallons a year in 2012 by blending motor vehicle fuels with ethanol and biodiesel. To start, the EPA proposed that 3.71 percent of all gasoline sold next year be renewable. EPA spokesman John Millett said the country can easily produce that much renewable fuel.

Click here for full story.


Biodiesel to drive up the price of cooking oil

If you think the high price of gas has been irritating, wait until you see the cost of french fries.

The popularity of biodiesel--made from vegetable matter intead of fossil fuels--"will tighten the supply of vegetable oils," William Camp, executive vice president of Archer Daniels Midland, said during a presentation at the ThinkEquity Partners Growth Conference in San Francisco.
Because agricultural prices typically fluctuate with supply levels, the vegetable oil shortage could cause food prices to rise.
Martin Tobias, CEO of Seattle-based biodiesel start-up Imperium Renewables, agreed. Vegetable oil prices have declined in the past three weeks because projected demand for biodiesel has come down from the speculative levels achieved a few weeks ago. Nonetheless, lowered levels of projected demand still seem destined to make supply difficult.
"I do think there will be a crimp in vegetable oil supplies in three to five years," said Tobias, who once worked at Microsoft.
According to Camp, part of the problem is the amount of oil required. It takes 7.5 pounds of oil to make one gallon of biodiesel.
Next, add the expansion plans. Archer Daniels Midland has already installed capacity to produce 300 million gallons of biodiesel in Europe and 135 million gallons in the U.S. It plans to open a plant to turn soybeans into biodiesel in Missouri and one to turn canola oil into biodiesel in North Dakota. Oils currently exported for food will get consumed domestically as fuel, Camp predicted.
Imperium says it will be capable of producing 100 million gallons per year by the second quarter of next year and is in the midst of negotiating the purchase of large tracts of land for refining biodiesel in North and South America.
Biodiesel's growing share right now, biodiesel doesn't total so much as a rounding error in the overall diesel market, Tobias said. About 62 billion gallons of diesel are consumed annually in the U.S. and 85 billion gallons are consumed in Europe. The total worldwide biodiesel production is 75 million gallons.
Biodiesel, however, should grow to 2 billion gallons in the U.S and 2.5 billion gallons in Europe by 2010, he said. Regulations reducing greenhouse gases are driving demand in both markets. At the tailpipe, biodiesel puts out 43 percent less carbon monoxide and 55 percent fewer particulates.

Biodiesel, if made correctly, can also be less expensive than standard diesel, Tobias said. Most biodiesel manufacturers churn out the fuel for about $64 a barrel. A barrel of Imperium is equivalent to a barrel of crude at $54.5. Next year, Imperium will drop prices to $30 to $40 a barrel. The government currently pays a 99 cents-per-gallon subsidy to biodiesel manufacturers.
"We've been cheaper than diesel for the year," he said. "At $30 to $40 crude equivalent, we should be able to compete with crude all day long." Imperium's prices are lower because they can use a variety of feedstocks. The company can make biodiesel out of palm, canola or soybean oil. Palm is the cheapest to buy, but the refining is a bit more complex.
Also, Imperium produces its biodiesel in a pressurized vat rather than an open vat, as some providers do. And by locating its plants near seaports, the company puts its biodiesel on tankers and ships it more cheaply. Refiners in the Midwest have to rely on trucks.
Biodiesel, Tobias further asserted, is a better alternative than ethanol. The capital expenditure is about 50 cents per gallon for biodiesel and $2 per gallon for ethanol. Biodiesel is also compatible with existing diesel trucks and buses. Gas-powered cars can handle only a small amount of ethanol and only a few high-ethanol cars are on the market.
Next year, European car manufacturers will bring to the U.S. more clean diesel cars, which produce fewer fumes than conventional diesel-engine cars. Clean diesels can also run on biodiesel, producing even fewer fumes.
"A clean diesel gets better mileage than a hybrid," he said


Combating the Glycerin Glut
By Dave Nilles

The biodiesel industry continues to make an impact on the liquid fuels industry—but its by-product is having just as much of an effect. Producers and consumers alike are struggling with business plans influenced by an expanding flood of crude glycerin

Saying the domestic crude glycerin market is reaching its saturation point would place one in the running for understatement of the year. The neutral substance, which is a by-product of the burgeoning biodiesel industry, has been anything but neutral to those directly affected by its price and availability.

As biodiesel production soars, so does crude natural glycerin. With up to 400 million additional gallons of biodiesel production being built or on the drawing board, it’s clearly evident glycerin is becoming a significant issue.

As with most industries, the U.S. glycerin market is representative of the world markets. Europe has been facing excess glycerin production issues for years since its biodiesel production began booming. “Biodiesel has taken off around the world,” says the National Biodiesel Board’s (NBB) Steve Howell. “Glycerin is very much a global market.”

In addition, the growing oleochemical industry in Asia is producing glycerin by the barge-load. Much of it had been exported to the United States, but with rising freight costs, a majority of it is now shipped to China.

European companies are striving to stay ahead of the glycerin explosion. In early 2006, international chemical company Solvay announced plans to build a 10,000 metric-ton-per-year epicholorohydrin plant in France. The plant will manufacture glycerin products to make epoxy resins, paper-reinforcing agents and other products. Other companies are proposing similar projects.
Meanwhile, the U.S. synthetic glycerin market has taken quite a beating. Synthetic glycerin is petroleum-based, where natural glycerin—such as that produced during biodiesel production—is created from fats and oils. Dow Chemical was once the nation’s only producer of synthetic glycerin. It closed its Freeport, Texas, plant in January, citing—in part—the flood of glycerin from biodiesel production. Dow Chemical still operates a glycerin plant in Germany.

“There is quite a synthetic market that’s been upset,” says Jim Conway, vice president of sales for Kentucky biodiesel producer Griffin Industries. “We are beginning to produce more than the market can bear under the current scheme of things.”

Annual consumption of glycerin in the United States has ranged between 400 million and 450 million pounds for the past three years. Domestic production figures show that approximately 400 million pounds per year was produced heading into the turn of the century.

The U.S. biodiesel industry is expected to produce an estimated 1.4 billion pounds of glycerin valued at $289 million between 2006 and 2015, according to an economic study by John Urbanchuk, director of LECG Inc. According to projections gleaned from NBB estimates, the industry could produce as much as 200 million pounds this year alone. Crude glycerin that once fetched between 20 and 25 cents per pound is now edging closer to 5 cents and lower.



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