In July 2006, after Greenpeace International authored a report claiming that soya farming was the leading driver of Amazon deforestation, ADM, Cargill and other members of Brazil's vegetable oil and grain exporting industries "agreed to a voluntary moratorium on trading soy harvested from newly deforested areas in the Amazon biome for a period of two years," said Bunge Ltd. in a company statement. "The intent was to relieve pressure on the Amazon biome, so work could be undertaken by government, industry, farmers and environmental groups to ensure its long-term protection." The moratorium is scheduled to end in July after the original agreement was extended last year.
 
 "We hope this moratorium is extended through 2010," said Paulo Adario, director of Greenpeace's Amazon deforestation campaign. "But we haven't begun any serious negotiations as of yet." The sustainable production of biodiesel has been a major focus of the global industry in recent months as consumer opinion has indicated, especially in Europe-so much so that it does not want to buy biofuels that put pressure on food crops or are made in ways that damage indigenous ecosystems. 
 
 "Biodiesel demand for soy oil is not seen as a significant driver of Amazon deforestation," Adario said. "Most of the soya grown in Brazil including what is grown on illegal plantations is for animal and human consumption, and right now the Brazilian government is investing in other feedstocks for the development of its biofuels program."
 
 The South American country, which is looking to grow its export power in the biofuels market, is being very careful about how its feedstocks are grown and sourced. "Sugar cane cultivation for ethanol production is the primary risk to the Amazon right now," Adario said. "But the Brazilian government is taking steps to fight this because they know that if the ethanol or biodiesel produced here is found to be supported by land that is responsible for rain forest destruction, the world market is going to say 'no, no, no.'" 
 
 While Greenpeace says the moratorium has had a significant impact and soy cultivation is no longer the leading driver of Amazon deforestation, there is still much work to be done. "There is no certification for soy in Brazil and very little traceability," Adario said. "So the question is, 'are the traders ready to totally exclude the farmers who grow soy illegally from the market?'"
 
 Although the domestic feedstock situation is thin at times, U.S. biodiesel producers are reportedly not looking to South America to source needed raw materials. "We rarely import anything, in terms of agricultural commodities, from South America," said Darrel Good, University of Illinois extension marketing specialist. "We do import some palm oil at times but that is mostly as a food ingredient."
 

 While soybean prices have been strong in early 2009, partly related to uncertainty over South American soybean production prospects, Bill George of the USDA's Foreign Agriculture Service, said that limiting expansion of soya on illegal acres is insignificant compared to other factors. "Drought, lack of access to financing, and a decline in yields are the major factors for the Brazilian soybean industry," he said. "So a decline of illegal soy acres, I would see as a drop in the bucket in regard to the overall scenario."
 
 On the other side of the globe, however, speculation on future biodiesel demand is driving tropical deforestation, says Rolf Skar, additional forest campaigner for Greenpeace in the U.S. While Amazon deforestation isn't seen as horrific as the situation in Asia, the pattern could be mimicked in Brazil, Argentina and other countries if the world doesn't play its cards right. "There are millions of acres lying fallow, primarily in Indonesia," Skar says. "That's because the EU and others have proposed mandates that require the use large of amounts of biofuels."
 
 Palm oil is slated as a staple of future biodiesel production, especially in Europe, as Finland's Neste Oil undertakes construction of the continent's largest renewable diesel plant at the Port of Rotterdam, the Netherlands. Neste has sourced palm oil for its production processes, associated with its proprietary NExBTL fuel, from Malaysian plantations. Neste is a member of the Roundtable for Sustainable Palm Oil, which promotes traceability in the supply chain, but its actions have not satisfied Greenpeace. "Neste is involved in a very dirty business," Skar said. "The RSPO which Neste has joined, is a good first step but it doesn't promote the kind of transparency and traceability in the supply chain that we would like to see."
 
 Greenpeace is actually calling for a moratorium on the sourcing of illegally cultivated palm oil from Malaysia and Indonesia, which is very similar to the one now in place against illegal soya farming in the Amazon. "The 2007 Guinness Book of World Records cited the top rate of deforestation was in Indonesia at 20 square miles per day during the preceding year," Skar says. "Most of this was done illegally-or at least through questionable practices-involving government corruption and land grabbing."
 
 Because of consumer pressure in Europe, however, this business practice is not something that companies with public profiles are going to want to be associated with. "People don't want to put this in their tanks," Skar says. "The promise of biodiesel is a great one, but if it comes from cultivation in areas that destroy human rights, ancient peat soils and endangered species, it's actually much more damaging than fossil fuels."

Greenpeace: biodiesel demand has varied impact on tropical deforestation

Remember a decade ago when everyone went out and bought up all the bottled water, ammunition, spam, and portable generators and then waited anxiously on New Year's Eve for all the satellites and airplanes to fall out of the sky? Businesses paid consultants millions of dollars to protect them from this technological boogie man. It wasn't a total hoax. 
 
 It was an unsupported hypothesis that turned into alarmist hysteria.
 
 So too is the unsupported projection about indirect land use consequences of U.S. biofuels. It seems simple enough. Increased use of crops for fuel will increase those crop prices and bring more land into production of those crops somewhere else. The problem with that simple assumption is that it is invalidated by this simple fact: agricultural practices have continuously gotten more efficient over time, growing more and more crops on less land. Adjusted for inflation, ag commodity prices are as low as they were during the Great Depression. 
 
 The fact that well-funded entities have been financing elaborate campaigns to attack biofuels for the past year has made it lucrative for individual "experts" to make alarmist claims against biofuels. A cottage industry of self-proclaimed instant agricultural policy experts has recently emerged. Most of these ag experts have never set foot on a farm, let alone, worked in any capacity in modern agriculture. As indirect land use change for biofuels becomes a hotter topic, more of these attention-seeking "experts" are crawling out of the woodwork to weigh in on the subject. 
 
 The biodiesel industry is not the least bit afraid of real science. We are committed to scientific research and to following where it leads. What we are concerned about is speculation and opinion being presented as science. This phenomenon has sadly become increasingly common and makes up a significant amount of the fairly limited body of work on indirect land use change for biofuels, and most of the commentary on indirect emissions impacts as they pertain to biodiesel specifically.

 
 We know that biodiesel is the only commercially available advanced biofuel. Even when challenged by guesswork wrapped in official looking words and cover pages, biodiesel repeatedly proves itself as a superior fuel source. 	
 
 <center><img src="/images/upload/20090609035726.gif" alt="" /></center>
 The chart shows that, while U.S. biodiesel production has grown between 2004 and 2008, there has been a marked decrease in soybean production in Brazil during that same time. 
 SOURCE: nbb
 
 For example, when a recent study criticized biofuels and water use, the facts behind biodiesel set it apart from other alternative fuels. Biodiesel is the most diverse fuel in the world, produced from a wide variety of regionally available fats and oils. Approximately half of the available U.S. raw material is currently soybeans, which are grown for their 80 percent protein meal. Crops are not irrigated or planted solely to produce biodiesel. Conversion of co-products and byproducts uses very little water. 
 
 It is clear why biodiesel rises above other biofuels when you consider that the entire U.S. biodiesel industry used less processing water in 2008 than it takes to irrigate two Sun Belt golf courses annually. Further, a joint U.S. Departments of Agriculture and Energy "cradle to grave" analysis of biodiesel's production found it reduces wastewater by 79 percent and reduces hazardous waste production by 96 percent compared to petroleum diesel.
 
 Another example is the EPA's draft interpretation of indirect land use in its proposed Renewable Fuel Standard rule. It relies on flawed assumptions in estimating biodiesel's greenhouse gas emission profile. One of the models that the EPA used looked at satellite imagery of land use change in Brazil and calculated the amount of new soybean acres that came into production. The EPA estimated the amount of carbon and indirect carbon that resulted in that new production, extrapolated those amounts cumulatively through 2022, and applied all of that carbon retroactively to US biodiesel. The problem is that there was very little U.S. biodiesel produced during that period, so it is impossible that U.S. biodiesel was the driver for any of that carbon. On the other hand, from 2004 to 2008, when U.S. biodiesel production increased from 25 MMgy to 690 MMgy, the number of soybean acres in Brazil actually decreased. If U.S. biodiesel production drove Brazilian land use decisions, the opposite would have been true. 
 
 Clearly, biodiesel's measurable strengths stand up to ill-formed theories. But, as was the case with the Y2K hysteria, facts, data, and common sense give way to sensationalism. Without knowing the real facts about biodiesel's benefits, decision makers will be crippled with invalid conclusions, false assumptions or even propaganda. It is imperative you - biodiesel industry leaders - act now to ensure the facts about biodiesel are positioned to make a case for the alternative fuel in long-term policy decisions. 
 

 The EPA is accepting comments on the proposed RFS2 rule through most of July. Contact the NBB 's Washington, D.C., office or visit the NBB Member's Only Web site for tools to help you champion biodiesel. Please join me and the NBB staff in D.C. to ensure that Americans and American leaders know the basics: biodiesel is an advanced biofuel - a fuel of the future, here today. 
 
 Sincerely,
 Joe Jobe
 Chief Executive Officer
 National Biodiesel Board

Indirect Land Use and Y2K

With the renewed interest in alternative fuels, there has been a push for cleaner and more environmentally friendly fuel. The increase in greenhouse gases (GHG) has become the driving force for the shift from fossil fuels to alternative fuels. Numerous regulations have been passed in the United States and by the European Commission recently to tackle these environmental problems and to promote the use of biofuels. The most popular biofuel currently in use is biodiesel. Specifically, the fatty acid methyl ester (FAME) is the most commonly used biodiesel. The cost of its production is relatively high compared to that of fossil fuels. In order to cut down on the cost, utilization of animal and vegetable fatty waste can be used for biodiesel production. 
 
 The regulations put in place for biofuel advancement resulted in the rapid development of Testing Standardization. ASTM International developed a standard specification D6751 for B100 biodiesel as a result of U.S. regulations. The specification consists of a number of test methods the biodiesel fuel is required to conform to in order for it to be commercially sold and distributed. This was followed by the release of a specification for biodiesel blends, designated D7467. The diesel fuel specification, D975, has also been revised to allow up to 5 percent biodiesel meeting specification D6751. These testing specifications all include oxidation stability as a major test method requirement. Currently, EN 14112 is the referee test method for oxidation stability of biodiesel within both D6751 and D7467 specifications. However, progress is being made towards putting an ASTM-designated test method for oxidation stability into these specifications. ASTM recently released an oxidation stability test method specifically for B100 biodiesel and blends of biodiesel with middle distillate petroleum fuel designated D7462. In time, this new test method will be incorporated into the D6751 and D7467 standard specifications. 

 
 Most biodiesel is produced by the transesterification reaction. The process takes place between a triglyceride and an alcohol to form esters and glycerol. A triglyceride is a glycerin molecule with three long fatty acid chains attached to it. The triglyceride reacts with the alcohol, either methanol or ethanol but most often methanol, in the presence of a catalyst such as sodium hydroxide or potassium hydroxide, to form mono-alkyl ester and crude glycerol. The combination of methanol and potassium hydroxide is preferred in FAME production because biodiesel produced this way is less resistant to oxidation than typical fossil fuel untreated with additives.
 
 The general mechanism of oxidation in biodiesel has been well documented. Fatty wastes in general are more susceptible to oxidation because they vary in level of unsaturation, meaning there are more carbon-carbon double bonds and fewer hydrogen molecules on the fatty acid chains. When biodiesel made from unsaturated oil is exposed to oxygen, the oxygen attaches itself to the bis-allylic site directly adjacent to the two double bonds, which initiates an autoxidation chain reaction sequence. Oxidation stability is not related to the number of double bonds available but rather the number of bis-allylic sites2,3. The initiation step is the formation of a free radical that can react directly with oxygen. This leads to the formation of a peroxide or hydroperoxide molecule. The most reactive site for initial formation is the bis-allylic position. The radials formed at the bis-allylic sites immediately isomerize to form a more stable conjugated structure, which reacts directly with oxygen to form peroxide. The existence of these molecules is an early indication of oxidation taking place, and it is measured in terms of peroxide value2. Later, aldehydes and ketones are formed. Finally, during the polymerization process, resins are produced making the fuel unusable1. 
 
 Due to its chemical structure, oxidation rates of FAME can depend on many variables such as temperature, light, radiation intensity, presence of naturally occurring antioxidants and more. The oxidation stability of FAME can be increased by adding additional natural and synthetic antioxidants. However, naturally occurring antioxidants in FAME have shown relatively poor efficiency compared with synthetic antioxidants. An effective concentration of the antioxidants is in the range of 200 parts to 1,000 parts per million (PPM), depending on the type of FAME and the test used to evaluate additive performance. The antioxidants work by binding free radicals and stopping chain reactions. In this way, fatty peroxyradicals are stabilized and the oxidation chain reaction is broken1,4. Oxidation stability testing can be conducted under several different methods. The methods used to test for oxidation stability of biodiesel, and all of the supporting technology, will be reviewed below. 
 
 Methods
 Rancimat EN 14112 – The Rancimat method expresses the oxidation stability of the tested material in terms of an induction period for the production of volatile organic acids, which are byproducts of fatty acid ester oxidative degradation with heat and oxygen11. 
 
 Figure 1 shows a plot of a typical Rancimat test. In this particular example, the induction time is about 4.8 hours. One can see a rapid increase in conductivity at this point. The second derivative is automatically taken to measure the absolute maxim, which is defined as the induction time6. This testing time of a few hours, instead of weeks or months, correlates to the shelf life of a product in years. 
 
 <center><img src="/images/upload/20090609033435.gif" alt="" /></center>
 Fig.1 A Typical Rancimat Conductivity Plot
 

 Rancimat EN 15751 – The EN 15751 method accounts for volatility of biodiesel and the longer stability of blends by increasing the reaction tube length to 250 millimeters (ml) and increasing the minimum analysis time to 20 hours. 
 
 High-pressure Differential Scanning Calorimeter (DSC) – High-pressure Differential Scanning Calorimetry can be used to measure oxidation stability of oils, fats and lubricants. The high-pressure DSC test is conducted using a modification of ASTM D5483, which is the Standard Test Method for Oxidation Induction Time of Lubrication Greases. A small quantity of a sample is weighed and placed in a test cell. The cell is heated to a particular temperature and pressurized with oxygen to 500 pounds per square inch. The cell is held at the specified temperature and pressure until an exothermic reaction occurs. The resulting pressure drop is measured during this time and is reported as the oxidation induction time6. 
 
 Photochemilluminesence method – The working principle of the photochemilluminesence method is based on the generation of multiple superoxide anion radicals. The superoxide anion radicals are produced in the instrument by optical excitation of a photosensitive substance. The radicals are partially eliminated from the sample by a reaction with the antioxidants present in the sample. The remaining radicals in the measuring cell cause the detector to luminance. The antioxidant capacity of the sample is then exactly determined by a photomultiplier tube. The antioxidative capacity of the sample is quantified by comparison with the standards of Trolox (an antioxidant) for lipid and water soluble antioxidants9. Lab results show that a direct proportionality between oxidation hour and the antioxidant capacity of the biofuel samples can be measured using the 
 Photochemilluminesence method. The key feature of this method is the speed of oxidative reaction, which, when compared to normal conditions, is 100 times higher. This is evident in the three-minute timeframe required to perform a single measurement. This drastic decrease in measurement time is made possible by photochemical stimulation of the reacting molecules. 
 
 ASTM D4625 – This test method has been used to test the storage stability of middle distillate petroleum fuels. Under the D4625 method, the fuel is stored at 43 degrees Celsius for up to 24 weeks. The sample is typically filtered to determine total insolubles on a weekly basis. After filtration, the sample is analyzed for the formation of sediment in stored B5 and B20 blends6,10. Formations of sediments correspond to the oxidation of unsaturated methyl oleate and methyl linoleate in the compounds. Today, ASTM D4625 is used to help determine if long-term storage of biodiesel will lead to the development of precipitate and gums, which are problematic for engines and turbines1,4. 
 
 <center><img src="/images/upload/20090609033533.gif" alt="" /></center>
 Fig. 2 Measure of Oxidation Stability as a Function of Pressure and Temperature
 
 ASTM D2274 – In the D2774 method, 350 ml of a filtered blend is aged at 95 degrees C and exposed to oxygen for 16 hours. After aging, the sample is cooled to room temperature before filtering to obtain the filterable insolubles quantity2,6. Adherent insolubles are then removed from the oxidation cell and associated glassware with trisolvent, a mixture of equal parts toluene, acetone and methanol. The trisolvent is evaporated to obtain the quantity of adherent insolubles. The sum of the filterable and adherent insolubles, expressed as milligrams per 100 ml, is reported as total insolubles. The 100 ml of the aged sample is mixed with 400 ml of iso-octane to precipitate, and then is filtered. After filtering the aged sample but prior to solvent washing the filters, an aliquot of the filtrate can be obtained for additional testing. The aliquot is analyzed for total acid number, kinematic viscosity at 40 C, density at 15 C, peroxide content and iodine value4,6.
 
 Conclusion

 A tremendous amount of resources and time have been dedicated to the methods being utilized to study oxidation stability of biodiesel. These methods have become the stepping stones for long-term biodiesel storage. The advancements in methodology have allowed us to improve biodiesel quality. As the biodiesel industry continues to develop, the need for better testing equipment will steadily increase. The next generation of testing instruments will need to be far more accurate and faster than instruments currently available. For this reason, the photochemilluminesence method appears to be a promising way forward, but further research is still required. 
 
 Raj Shah is a director at Koehler Instrument Company. Reach him at <a href="mailto:rshah@koehlerinstrument.com">rshah@koehlerinstrument.com</a>. Devinder Mahajan is cochair of chemical engineering at State University of New York at Stony Brook. Saurabh Patel is a graduate student working under Devinder Mahajan. The remaining authors work for Koehler instrument Company and can be reached at (631) 589-3800.
 
 References
 1. Oxidation Stability of Biodiesel Fuel Produced from Fatty Wastes. Sendzikiene, E., Makareviciene, V. and Janulis, P. 3, Studentu : Polish Journal of Environmental Studies, 2005, Vol. 14.
 2. Several factors affecting the stablity of biodiesel in standard accelerated tests. McCormick, R.L., et al. s.l. : Fuel Processing Technology, 2007, Vol. 88.
 3. Gerpen, Jon Van. Fuel Stability. Biodiesel Education. [Online] University of Idaho - Department of Biological an Agricultural Engineering, 2004. [Cited: april 27, 2009.] http://www3.me.iastate.edu/biodiesel/index.html.
 4. Effect of commercially available antioxidants over biodiesel/diesel blends stability. Dinkov, Roson, et al. Bulgaria : Fuel, 2008, Vol. 88.
 5. Oxidative stability of biodiesel from soybean oil fatty acid ethyl esters. Ferrari, Roseli Ap., Oliveira, Vanessa da Silva and Scabio, Ardalla. 3, Ponta Grossa : Sci. Agric., 2005, Vol. 62.
 6. Westbrook, S.R. An Evaluation and Comparison of Test Methods to Measure the Oxidation Stability of Neat Biodiesel. San Antonio : National Renewable Energy Laboratory, 2005.
 7. Oxidation Stability - Scope & Limitation of Modified Rancimat Method EN 15751 and Future Alternatives. Ullmann, Jorg and Straub, Gunther. s.l. : Raber Bosch GmbH, 2008.
 8. The high-pressure DSC for specific reactions. Netzsch. [Online] Netzsch, 2009. [Cited: April 27, 2009.] www.Netzsh.com.
 9. Lambda Advanced Technology. Photochem offers method of measuring antioxidants. Laboratorytalk. [Online] oct 23, 2006. [Cited: april 25, 2009.] http://www.laboratorytalk.com/news/lam/lam123.html.

 10. Peyton, Kim, McGinnis, Tim and Bureman, Phil Bureman. Preventing Sediment Formation In Stored Biodiesel Fuel Blends. Biodiesel Magazine. [Online] December 2008. [Cited: April 26, 2009.] http://www.biodieselmagazine.com/article-print.jsp?article_id=2979.
 11. Tremblay, Alain and Berthiaume, David. Study of the Rancimat Test Method in Measuring the Oxidation Stability of Biodiesel Ester and Blends. Natural Resources Canada. November 2006. http://www.technopolethetford.ca/FichiersUpload/Softsystem/NRCan-OLEOTEK-StudyoftheRancimatTestMethodinMeasuringtheOxidationStabilityofBiodieselEstersandBlends.pdf

Oxidation stability testing can be conducted under several different methods. Here is a detailed overview.

Oxidation Stability in Biodiesel: A Brief Review of Current Technology

In this time of economic uncertainty, employment and benefits issues are topics biodiesel plant owners and industry participants must address. Among the myriad of legal and practical considerations are the impact of workforce adjustments on employee benefits, such as company's retirement plans and COBRA obligations. 
 
 For qualified retirement plans (e.g., 401(k) and profit sharing plans), there is a concept called a "partial termination." A partial termination occurs when a significant number of participants are terminated due to layoffs or other employer-initiated terminations. The determination of whether a partial termination has occurred depends on the facts and circumstances surrounding the case. The IRS will, however, presume that a partial termination has occurred if the number of participants decreases by at least 20 percent during a 12-month period, usually the plan year. 
 
 To calculate the percentage reduction, the employer divides (1) the number of participants who had an employer-initiated termination of employment (e.g., layoff, plant closure or firing) during the plan year by (2) the sum of all participants at the beginning of the plan year plus employees who became participants during the plan year. All participants-vested and unvested-must be taken into account to calculate the percentage reduction. Participants who voluntarily terminate or who terminate due to death, disability or retirement are not counted. A termination is employer-initiated even if it is caused by events, such as depressed economic conditions, which are outside the employer's control. 
 
 The employer will usually calculate the percentage reduction using participant data for a plan year. But, if a series of terminations is related, the period over which the percentage must be calculated could be longer. So the calculation is cumulative, and while one layoff may not trigger a partial termination, the second or third could.
 
 If a partial termination occurs, all participants whose termination was employer-initiated must become 100 percent vested in their benefits. That will likely increase the amount that 
 the participant is entitled to receive. From the employer's perspective, that means forfeitures counted on to pay expenses or offset future contributions will not be available, indirectly increasing costs. Failing to fully vest participants due to a partial termination could potentially disqualify the plan.
 
 COBRA Considerations
 Most employers have heard that the new COBRA provisions set forth in the American Recovery and Reinvestment Act of 2009 apply to a reduction in force or layoff. Briefly, ARRA creates a 65 percent subsidy for COBRA premiums for employees (and their spouses and dependents) who elect COBRA due to the employee's involuntary termination, if it occurs between Sept. 1, 2008, and Dec. 31, 2009. In addition, the subsidy is subject to a number of conditions, and employers have several new notice requirements. 
 

 The new COBRA provisions are summarized at www.fredlaw.com/articles. Additionally, both the Internal Revenue Service and the Department of Labor have issued guidance in the form of questions and answers. Also, the Department of Labor has issued model notices that employers may use, at www.irs.gov and www.dol.gov/cobra. 
 
 There are, however, other COBRA considerations. Employers know that, if an employee is laid off, he or she has the right to continue coverage under the employer's group health plan. In addition, the employee's spouse and dependent children have separate COBRA rights. All of these individuals also have special enrollment rights under the Health Insurance Portability and Accountability Act of 1996. So, assume Employee is laid off at Employer A and elects COBRA coverage for himself and his spouse. Employee finds another job with Employer B, but the spouse keeps her COBRA coverage under Employer A's health plan. Employee loses his job with Employer B. Can the spouse add Employee back to Employer A's health plan? 	
 
 It appears so. As a qualified beneficiary, the spouse has the same HIPAA special enrollment rights that are available to Employer A's active employees. Those special enrollment rights include enrolling Employee due to Employee's loss of health coverage with Employer B. The IRS regulations suggest that the spouse could enroll Employee on Employer A's health plan, but only for the balance of the 18-month COBRA period measured from the date of Employee's layoff at Employer A. If Employee wanted a new 18-month COBRA period, he would have to elect COBRA under Employer B's plan.
 
 The legal issues, including benefits, triggered by a layoff or reduction in force can be overwhelming for an employer. Proper planning can help navigate around the potential land mines. 
 
 Debra Linder is an attorney with Fredrikson & Byron. She can be reached at <a href="mailto:dlinder@fredlaw.com">dlinder@fredlaw.com</a>. Todd Guerrero is an attorney in Fredrikson & Byron 's renewable energy group. He can be reached at <a href="mailto:tguerrero@fredlaw.com">tguerrero@fredlaw.com</a>.

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Planning to Make Layoffs? Here Are Some Key Benefits Issues to Consider

The recently proposed rules for what is now known as RFS2 have established a new and formidable challenge for virtually every biodiesel producer delivering product to the American consumer. Beginning January 1, 2010, producers of any significant quantity of biofuels must certify and provide an account of the related feedstock all the way back to the point of origin.
 

 Consider this example: Acme Biofuels Inc.-the company produces mono-alkyl ester by processing soy beans at its facility in Missouri. On January 4, 2010, Acme produces a 7,000 gallon batch and is now ready to assign renewable identification number credits (RINs) to that batch. Under RFS2, Acme must now have an account for every soybean processed, traceable all the way back to the land(s) from which it was harvested. Without these records, the producer can not generate RINs under the proposed RFS2.
 
 Waste grease processors will not be immune to this requirement either. In the case of Go-Green Biodiesel, a small plant producing 100,000 gallons of product each year, the burden of proof still remains. Let's say, Go-Green purchases a load of waste grease from Big John's Collection Services. Big John will need to deliver historical documentation for each gallon, certifying a pathway all the way back to each fast food restaurant or greasy spoon from which the feedstock was collected. Without this documentation, Go-Green will not be able to generate RINs under RFS2.
 
 As the market for renewable fuel and the associated credits has developed, so has the price for the RINs. With Type B, or biomass-based diesel, RIN prices reaching more than 25 cents per credit at times, producers simply can not afford to leave this money on the table. Furthermore, the new proposed EPA rules will not permit it. If for some reason a producer decides to not assign RINs to a batch of fuel, EPA still requires that the feedstock be tracked back to the point of origin. In the case of Acme Biofuels, if it does not assign RINs to its fuel, the company needs to prove the soybeans came from land that was not in cultivation prior to December 19, 2007. In other words, if there is a RIN assigned to a gallon of biofuel, the producer has the burden of proof to establish to EPA that the feedstock comes from eligible lands; if there is not a RIN assigned to it, the producer must prove the feedstock came from ineligible lands. To operate otherwise would be a violation of the Clean Air Act, which carries the potential of fines at $32,500 per day plus any economic benefit derived from the violation.
 
 As you may have deducted by now, the new burden of proof requirements stem from fuel pathway requirements and indirect land use provisions in the Energy Independence and Security Act of 2007, an issue that the industry trade associations are certainly sensitive to. If implemented as proposed, these new regulations will establish a formidable barrier to participation, a regulatory hurdle that many may not be able to clear.
 
 In my experience operating the RINSTAR renewable fuel registry, such a fundamental change to the RFS program will be a significant challenge. With more than 170 members, several of which are biodiesel producers, considerable program changes are in the development stage now at RINSTAR in anticipation of the final RFS2 implementation as early as January 1, 2010. 
 
 Operating companies throughout the renewable fuel supply chain must take action now if they expect to adhere to the impending federal laws. The advent of the RFS2 under EISA marked a new era of government involvement in the business of biofuels. Since the passing of RFS1 in 2005, we now have a California Low Carbon Fuel Standard set to go in place in 2010, along with a federal RFS2 slated for implementation in the same year. At least 11 other states have pledged to implement their own LCFS, with all of these programs almost certainly having a fuel pathway component. Obviously, regulators will have an increasingly higher level of interaction with every biodiesel producer and their businesses-bringing to mind the old saying, "We are with the government and we are here to help." 
 
 Regardless whether the indirect land use components of these regulations are ultimately modified, producers planning to stay in business must prepare now. The burden of proof will be on the shoulders of every producer in the supply chain, requiring feedstock certification all the way back to the land, the slaughter house or the restaurant.
 
 A RFS2 Stakeholder Awareness Webinar series discussing the burden of proof requirements along with a number of additional issues was conducted with representatives of EPA and industry experts recently. Biodiesel Magazine readers can gain access to this series of informative recordings at www.CFCH.com and using the promotion code "BDM." The first Webinar in the series will be available at no charge to the first 50 people who sign up.
 
 Clayton McMartin is the president of Clean Fuels Clearinghouse, the company behind the only U.S. renewable fuel registry, RINSTAR. Contact him through the Web site <a href="http://www.CFCH.com">www.CFCH.com</a>.

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Biofuel Producers to Bear New Burden of Proof with RFS2

Posted June 9, 2009

 
 Following a fire at a Minnesota biodiesel plant, the <a href="http://www.biodiesel.org">National Biodiesel Board</a> reminded the industry that it has long partnered with the International Association of Fire Chiefs to prepare and distribute safety training materials.
 
 The late-May fire at Minnesota Soybean Processors in Brewster, Minn., occurred in a storage and loading area and did not involve any explosion or injuries or damage the processing areas. "With a flash point of 200 degrees, biodiesel is the safest fuel to handle, store and use," said NBB CEO Joe Jobe. "MnSP is certified as a BQ-9000 producer, the industry's voluntary quality control program, so they were very well prepared to handle any safety issue."
 
 NBB has posted the new<a href="http://www.biodiesel.org/resources/responseconsiderations/default.shtm"> "Biodiesel: Response Considerations" safety resource</a> on its Web site</a> (www.biodiesel.org) and is mailing copies to NBB producer members to work with their local fire departments. The IAFC will distribute 2,700 copies to fire departments and at events.
 
 "The Biodiesel Response Considerations training program provides the critical information First Responders and Haz Mat Response Teams need for a safe and competent response," said Captain Steve Hergenreter of Fort Dodge, Iowa. "It includes information on the chemicals involved in production, along with information on the properties of biodiesel. Whether preplanning a facility or responding to one, understanding these chemical and physical properties ensures a response based on facts, science and circumstances."

 
 The materials include training tools, such as a PowerPoint presentation, as well as a video about response considerations. The video is available on NBB's YouTube channel, <a href="http://www.youtube.com/nationalbiodiesel">www.youtube.com/nationalbiodiesel</a>. NBB and IAFC developed the materials with the support of a U.S. DOE Grant. Distribution is funded through the soybean checkoff and United Soybean Board.
 
 "Our industry prides itself on a good safety record, and NBB appreciates the leadership and cooperation of the IAFC in developing these materials that will benefit first responders as well as biodiesel producers," said Jobe. "We also applaud fire departments in San Francisco and elsewhere who have led by example by using biodiesel blends to power their own emergency vehicles."
 
 SOURCE: NATIONAL BIODIESEL BOARD

NBB distributes fire safety materials

Elevance Renewable Sciences Inc.'s CEO K'Lynne Johnson said that Illinois-based Elevence is in discussions with investors in hopes of raising nearly $50 million this year to acquire distressed biodiesel plants. Its plan is to retrofit distressed biodiesel refineries with its biochemical process technology to produce 80 MMgy of biochemicals and biodiesel from vegetable oils. Elevence's olefin-metathesis catalyst technology reacts with double bonds of unsaturated sites in oils, enabling the company to create a variety of different molecules.

Biodiesel, meet biochemical

Soy-based biodiesel's star rating fell precipitously in the fuel pathway calculations performed by the U.S. EPA in its proposed rule released in May. The calculations were included in EPA's proposed rule to implement the Renewable Fuels Standard passed in the 2007 Energy Independence and Security Act. The RFS carves out a mandate for biomass-based diesel with a targeted 50 percent greenhouse gas (GHG) reduction when compared to conventional diesel.
 
 By far the major culprit in biodiesel's fall in GHG benefits was the incorporation of international indirect land use change impacts into the calculations. Earlier life cycle analyses kept the focus on the more direct supply chain contributions, including such things as the carbon emissions involved in raising the crop and transporting it to market; and the energy used in conversion and transporting the fuel to the end user. Biodiesel showed nearly an 80 percent GHG benefit in some of those earlier models.
 

 Incorporating indirect land use change says, essentially, that soybean-based biodiesel is responsible for land use change globally, stimulated by the increased demand for soybeans. In EPA's calculations, soy-based biodiesel resulted in GHG reductions of 22 percent in one scenario over 100 years, and an increase of 4 percent in GHG reductions in another scenario projecting ahead 30 years. 
 
 <center><img src="/images/upload/20090609035332.gif" alt="" /></center>
 SOURCE: U.S. EPA
 
 Biodiesel advocates cried foul. The American Soybean Association laid out its critique of the indirect land use change calculations in its May 21 testimony before a small business subcommittee in the House of Representatives:
 
 ›The method used by EPA to measure indirect land use is new and untested.
 
 ›The EPA analysis uses previous land conversion and extrapolates that into the future, with soy biodiesel land use factors focused on Brazil. Brazilian soy area increased most significantly in the years prior to the existence of U.S. biodiesel production (1998 to 2004). In the period from 2004 to 2008, when U.S. biodiesel production increased from 25 million gallons to 700 million gallons, Brazilian soy area decreased. Soy biodiesel cannot possibly be responsible for Brazilian land use change.
 
 ›Other market factors (urbanization, world population growth and dietary changes, timber and hardwood prices, etc.) impact and drive land use change.
 
 ›Yield increases by U.S. soybean farmers will play a significant role in meeting biofuel demand, and are inadequately accounted for in the EPA projections.
 
 ›The indirect emissions of diesel (the baseline against which biodiesel is being measured) are not factored into the baseline.

 
 The ASA also argued that the statute does not require EPA to include international indirect emissions in the life-cycle analysis for biofuels, and that there is more confidence within the scientific community in the ability to address indirect land use changes that may occur in the U.S. as a result of biofuel demand.
 
 While the ASA and the National Biodiesel Board are currently focused on providing comment in the EPA rulemaking process, legislation has been introduced to amend the statute establishing the RFS. House Agriculture Committee Chairman Collin Peterson, along with a bipartisan group of 42 members of Congress, introduced a bill to eliminate the requirement that EPA consider indirect land use when calculating GHG emissions. A similar bill was introduced in the Senate by Iowa Sen. Chuck Grassley. 
 
 "Chairman Peterson made known his strong views in a hearing," commented Tom Hance, ASA's Washington representative. "He said he is not interested in supporting climate change issues unless the indirect land use change question was resolved at the EPA." While ASA supports the Peterson and Grassley bills, Hance added it would be quickest and most efficient to resolve the issue in the rulemaking process.

Soy biodiesel fares badly in EPA calculations

The controversial issue of EPA's proposed RFS2 rule, especially the curious science behind methodologies of indirect land use change and greenhouse gas (GHG) reductions, continues to play out. Several key elements of the debate, such as the definition of renewable biomass, producers' new burden of proof, and the grandfather clause, have become extremely important-in fact, it could be said that the fate of the U.S. biodiesel industry rests in such seemingly harmless phrasings and terms. But be assured there is no resting going on. 
 
 There is a huge, concerted effort underway right now to convince EPA how flawed its calculations and assumptions on indirect land use change really are. To think that renewable fuels are the only products to ever have to meet such criteria is disturbing. As one source put it, the idea of blaming the destructive farming practices occurring halfway across the world on Iowa soybean oil being made into biodiesel is absurd, and cannot be allowed to be part of legitimate national policy. Clearly, the debacle last year of food versus fuel and the hysteria created by rising food prices only set the stage for all of this, and that hysteria has infiltrated the Beltway in such a way as to affect policymakers. But perhaps the fact that this issue has come to a head now is, in the long run, doing the biodiesel industry a favor because the issue will be fought out today rather than later. 
 
 To think, however, that other industries-livestock and food producers, oil explorers and refiners, etc.-do not need to meet the same criteria is appalling. After all, the myriad of food producers putting out nutritionally worthless snack products, on which food companies spend millions and millions of dollars to advertise to children, get a free pass on accountability; while the biodiesel industry, which is trying to play a major and important role in creating an energy-independent United States and more sustainable global energy environment, has to jump through these ridiculous hoops. Even European nations such as Germany, which are elders compared to the U.S. in terms of enacting environmental policy, do not wish to touch the sketchy issue of indirect land use change. Also, extraction of crude petroleum oil from alternative sources such as the shale sand tars is extremely energy intense. Will this be discouraged by pending GHG reductions? Maybe. 

 
 An interesting chart accompanying National Biodiesel Board CEO Joe Jobe's column in this issue's Inside NBB section shows that while U.S. biodiesel production has significantly increased from 2004 to 2008, Brazilian soybean acreage declined. Is this proof that indirect land use change does not exist? No, but it may show exactly what NBB wants EPA to see-that the methodology behind its indirect land use change is erroneous. 
 
 Here are some of the finer points, found in the 2007 energy bill and/or the EPA's proposed RFS2 rule. According to EPA members, "renewable biomass" is defined as feedstock grown on agricultural land that must have been cleared or cultivated prior to Dec. 19, 2007-the date on which the 2007 energy bill and its RFS2 was signed into law. That land must also be actively managed. Woody biomass from federal lands is not allowed except from wildfire areas. Slash and pre-commercial trimmings from forestland are allowed as long as the forestland is non-federal and not ecologically sensitive as determined by state natural heritage programs. 
 
 There is a new "burden of proof" to consider. This means that all biofuel producers, as laid out in the proposal, must document the origin of its feedstock-a daunting if not impossible task. To generate any kind of renewable identification number (RIN) credits under the proposed RFS2 rule, a producer must have the history of its feedstock that meets the renewable biomass definition. According to EPA, this is regardless whether that feedstock meets the definition of renewable biomass. So, if Company X chooses not to assign a RIN to a gallon of fuel it produces, the RFS2 proposal, as it exists today, states that EPA will require documentation proving that the feedstock came from lands that were not in cultivation prior to Dec. 19. The proposal would also require foreign producers to register, report and maintain similar records just like the domestic producers.
 
 The grandfather clause-seemingly the only mildly positive part of EPA's proposed ruling-states that all of the biodiesel plants in production or under construction before Dec. 19 2007 are considered grandfathered in. This means that they don't need to meet GHG reductions-even plants purely using virgin oils-nor do they need to prove their feedstock is "renewable biomass." The catch, however, is that they won't be able to generate biomass-based diesel RINs, only general renewable fuel RINs, which would go toward the 15 billion gallon general "renewable fuel" category in RFS2, same as corn ethanol. 
 
 If you are reading this, you have a vested interest in the survival of the biodiesel industry. Make your voice heard and provide EPA with the vital feedback needed to help it find a reasonable synthesis between sound environmental policy and allowing the biodiesel industry a chance at survival and prosperity. 
 
 Ron Kotrba
 Editor
 <a href="mailto:rkotrba@bbiinternational.com">rkotrba@bbiinternational.com</a>

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Tell EPA its RFS2 Proposed Ruling is Fatally Flawed

Bio Blend Fuels Inc. opened a self-contained biodiesel blending station in May alongside the company's new 2.6 MMgy biodiesel plant in Manitowoc, Wis. The American Fuel Blending System is a portable unit with above-ground heated storage and a self-contained dispensing system complete with credit card reader. Available with 5,000 or 10,000 gallon tanks, the unit can be used for B20, B50 and B99 blends, as well as programmed for individual blending requirements. Don and Tracy Kaderabek, founders of both companies, designed the blending station to compliment their processing system making biodiesel from animal fats. The heated tank of the blending station maintains the ideal temperature for optimal blending of the animal fat-based biodiesel, Don Kaderabek explained. Furthermore, the unit's portability would benefit construction and other industries that could move the units from site to site, and seasonal industries such as agriculture or recreation that would find the capacity minimizes end-of-season fuel inventories.

American Fuel Blending Systems offers a self-contained portable biodiesel station./PHOTO: Bio Blend Fuels

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Portable blending station introduced

Buffalo Biodiesel Inc. completed the expansion of its waste vegetable oil processing facility in Tonawanda, N.Y., from 1 MMgy to 5 MMgy in May. Buffalo Biodiesel collects and renders yellow grease from restaurants in New York and Pennsylvania. The facility has been running at half capacity, according to Buffalo Biodiesel President Sumit Majumdar. "There really is no demand [for biodiesel] at a price higher than heating oil," he said. The expansion of the Buffalo Biodiesel's feedstock processing segment will facilitate contracting with biodiesel producers interested in using the rendered yellow grease. Buffalo Biodisel is a wholly-owned subsidiary of HydroGenetics Inc., which entered the biodiesel sector with the plant purchase in January.

Buffalo Biodiesel completes expansion

California's Water Resources Control Board approved expanding the state's limit for underground storage of biodiesel blends from the existing B5 limitation up to B20 in a resolution adopted in early May. A 25-year-old California law requires that any chemicals to be stored in underground tanks be tested and independently certified as being compatible with the tank materials, and requires an approved leak detection method. No underground storage of any biodiesel blend was allowed in California prior to the revised ASTM specifications adopted late last year that allow up to B5 blends in petroleum-based diesel. The three-year variance allows underground storage of blends up to B20 in double-walled tanks and piping that currently meet requirements for petroleum-based fuels. It is hoped that the Underwriters Laboratory will have approved testing protocols and the required tests completed before the end of the three year period. 
 
 "I was not happy to see it wasn't B100," said Joe Gershen, vice president of sales and marketing for Tellurian Biodiesel Inc. "But B anything is better than nothing." Gershen added that B20 is probably the most commonly used blend in California, and "going from nothing to B5 to B20 is going in the right direction." He added that the California Biodiesel Alliance, which Tellurian CEO Eric Bowen chairs, has been meeting with the water board which has increased the member's comfort level with biodiesel. "We're forging a new relationship with regulators in California," Gershen said.

California expands underground biodiesel storage to B20

The European Union has always been the primary market for Argentine biodiesel and will continue to be so for the foreseeable future now that EU tariffs have stopped the flow of methyl ester imports from the United States. In addition, a spokesperson for the Argentine Renewable Energies Chamber said the EU has established stringent biofuels mandates, and can't grow enough rapeseed/canola for its targets. Therefore, it needs to import either soy oil or biodiesel from countries such as Argentina-the world's largest exporter of soy oil and the fourth largest producer of biodiesel. "Biodiesel appears to be going to Holland because Rotterdam is the primary entry point for biofuels," said Carlos St. James, president of the AREC. "It then gets shipped throughout the continent." The increased cost of U.S. biodiesel due to the tariffs has opened a window of opportunity for the Argentine industry, as the country's total production reached 1.07 million tons (320 million gallons) in 2008, with sales in excess of $1.3 billion.

EU increases imports of Argentine biodiesel, soy oil on heels of US tariffs

Finland's Neste Oil held an official groundbreaking ceremony May 26 for a $940 million renewable diesel plant at Rotterdam, The Netherlands. This facility whose production capacity will be approximately 240 MMgy will be dedicated to producing NExBTL fuel, and will be the largest renewable fuels plant in Europe. NExBTL, Neste Oil's proprietary technology, contributes to 40 to 80 percent reduction in CO2 emissions.

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Construction starts on EU's largest renewable fuels plant

The thermochemical approach to making fuel from organic material has been the outsider in the biofuels movement, but Dynamotive Corp. of Vancouver, British Columbia, said that it has successfully produced significant amounts of renewable gasoline and diesel from biomass at its research facility in Waterloo, Ontario. The company estimates it can deliver advanced fuels from biomass at less than $2 per gallon in facilities processing about 70,000 tons of biomass per year. The process, developed by a team led by Desmond Radelein, involves hydro-reforming its pyrolytic bio-oil to a gas-oil equivalent liquid for industrial stationary power and heating applications or it can be further upgraded to transportation grade liquid fuels.

Dynamotive produces significant quantities of renewable diesel

NxtGen Emission Controls Inc., Burnaby, British Columbia, and Süd-Chemie Group, Munich, Germany, have introduced a lower cost, high-efficiency diesel particulate filter optimized for low-temperature regeneration. The collaborative development effort generated up to 40 percent savings as a result of optimizing the filter with nearly 60 percent less precious metal. Early results indicate the Nxt-Gen syngas generator and proprietary control algorithm, coupled with Süd-Chemie's proprietary particulate filter technology, offers a potential solution that is functional even during low-temperature operation of the engine, including idle conditions.

NxtGen's syngas DPF system is shown installed./PHOTO: NXTGEN EMISSION CONTROLS

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New DPF regenerates in low-temperatures

World Energy Alternatives reported that rack prices for biodiesel were up 5 cents per gallon for the week of May 11. Atlas Renewable Energy of Chicago reported that the spot price for biodiesel on May 27 was between $2.84 per gallon and $2.94 per gallon. "Biodiesel hasn't been moving much in the past several weeks," said Will Babler of Atlas. According to Biofuels Brokers of Hickory Corners, Mich., biodiesel prices always take off in spring and summer and slow in the winter. "Biodiesel is a seasonal market," said Michael Cooper, president of Biofuels Brokers. 
 
 Diesel prices are rising too. Despite the highest inventories of crude oil since before the Great Depression-at around 375 million barrels-prices are rising, to the puzzlement of the U.S. Energy Information Administration. "Prices are at $50 per barrel or $60 per barrel when they should be at around $35 per barrel, according to the fundamentals of supply and demand," said a Biodiesel Magazine source at EIA. 
 
 Diesel market trends are following crude oil's suit. "The trucking industry, which buys more diesel than any other sector, has lost 30 percent of its business in a single year, and other major areas of diesel demand are performing poorly as well," the EIA source said. "We're done with the home heating oil season, rail freight's biggest customer is the auto manufacturers so their volume is down, next is construction…none of the people I know in construction are working…so all of the major customers of diesel are not buying nearly as much fuel-yet the price is going up."
 
 The crude spot price from May 5 to May 12 jumped from $53.81 to $58.81, at Cushing, Okla., which is a major pipeline distribution spot. OPEC has cut back on the amount of oil that it is supplying to the market and they have curtailed production, said Phil Weiss, analyst for Argus Research Group in New York City. "If they didn't cut production, inventories would be growing even more."
 

 A production cut obviously has an effect on prices even if surpluses remain high. There are other market conditions, however, that are also firming up price performance. "One reason for the rising price of crude and diesel is that the market is making bets on how quickly the economic recovery will take place," Weiss said. 'We've seen some early positive signs."
 
 According to EIA's weekly regional price report, the national average price of diesel fuel rose, gaining 3 cents to $2.22 per gallon for the first time in four weeks. The price, however, was $2.12 below last year's, and $2.55 less than the all-time high price recorded on July 14, 2008. Prices in all regions of the country increased with the East Coast moving 3 cents higher to $2.26 per gallon. The Midwest price also went up 3 cents, to $2.16 per gallon. 
 
 Cooper said biodiesel producers and marketers need to take advantage of rising diesel prices, but instead of clinging to them, offer the renewable fuel at a lower cost. "The market 
 is shooting itself in the foot on the demand side," Cooper said. "Biodiesel producers want the value of the product plus the value of the RINs when we need to be selling for less than or equal to the price of petrol diesel to grow our market."

The trucking industry buys more diesel than any other sector, and has lost 30 percent of its business in a single year, according to an EIA source./PHOTO: JACK SITTER, BBI INTERNATIONAL

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Biodiesel producers should capitalize on rising petrol prices

The U.S. oil industry witnessed considerable consolidation among its refineries years ago, and there's evidence today of this happening to the biodiesel business. Renewable Energy Group Inc. entered into a consolidation arrangement with three biodiesel plants in May. The plants are the 30-MMgy Western Iowa Energy in Wall Lake, Iowa; the 30-MMgy Central Iowa Energy LLC in Newton, Iowa; and the 45-MMgy Blackhawk Biofuels LLC in Danville, Ill. All four entities are now organized under a new holding company with the REG name. 
 
 "Given current industry consolidation and production economics, it is difficult for stand-alone facilities like our plant to succeed on their own in the 67-billion-gallon distillate market," said Jim Johnston, board chairman for Central Iowa Energy. Jeff Stroburg, REG chairman and CEO, said the consolidation maneuver was a pure stock transaction. "We're exchanging REG stock for the plants rather than cash," Stroburg said. 
 
 The new consolidated company will be owned by current members of the three biodiesel refineries and current REG investors, including Bunge North America, ED&F Man, Natural Gas Partners, NGP Energy Technology Partners, US Renewables Group and West Central Cooperative. 
 
 "All three of the plants have good logistics – they're on good rail lines, they have good feedstock availability, and are nicely positioned to hit the Midwest markets," Stroburg said. REG built and has been operating the two Iowa plants involved in the deal for a couple of years and, according to Stroburg, REG helped complete the Illinois biodiesel refinery, which is located next to a Bunge crush plant. 
 
 REG president and chief operating officer Daniel Oh said, "We believe this proposed consolidation brings greater economies of scale, streamlined central management of complex logistics and decision-making processes, and enhanced risk management opportunities. By more efficiently managing our business and strengthening distribution channels, REG will continue to partner with obligated parties of the renewable fuels standard." 
 

 Stroburg added that as the RFS goes into effect "the distillate market is demanding technical expertise, dependable supply, more efficient distribution and creative pricing options from major biodiesel partners." 
 
 In other industry consolidation news, Encore Energy Systems, a company that calls itself an "international aggregator of biodiesel reactor technology," released a statement in May regarding its intention to acquire five biodiesel plants-four in Mississippi and the other in Texas. Encore Energy Systems did not return phone calls from Biodiesel Magazine, but in its May 11 press release the company stated, "These locations are in conjunction with the company's recently announced business development partner, Hardin Fuels … Fuel distribution and feedstock allocations have been located for these projects and will be further announced as shipping commences." Encore Energy Systems anticipates "explosive demand," and will continue targeting distressed biodiesel asset purchases and biofuel production and distribution agreements, the announcement said.

Western Iowa Energy LLC, a 30 MMgy biodiesel plant in Wall Lake, Iowa, is one of three large biodiesel plants involved in the REG consolidation agreement announced in May./PHOTO: REG Inc.

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Industry consolidation playing out

The biodiesel industry is mustering its experts and supporters to comment on U.S. EPA's proposed rule to implement the Renewable Fuels Standard (RFS2) from the 2007 Energy Independence and Security Act. With the voluminous document officially published in the Federal Register on May 27, comments must be offered before July 27. 
 
 Soy-based biodiesel's poor showing in EPA's greenhouse gas (GHG) calculations causes concern, but one positive, according to National Biodiesel Board CEO Joe Jobe, is that obligated parties can purchase biodiesel today, and it will count toward the 2009 500-million-gallon requirement. "The notice is very clear-obligated parties can buy biodiesel from whatever feedstock, and it will generate RINs," Jobe said. The industry currently is operating under the regulatory structure for RFS1, using higher volumes mandated in RFS2. 
 
 Another positive is that biodiesel sold for off-road use can generate RINs for RFS2 compliance, according to Paul Argyropoulos, an EPA senior advisor. Also, the number of obligated parties under the RFS2 has been expanded to include diesel refiners, blenders and importers-RFS1 applied to gasoline only. EPA is requesting comments for several policy options outlined in the proposed rule, one of which is whether RFS2 should continue treating energy content as RFS1 did. This would credit biodiesel with 1.5 times the value of ethanol. The other option is to move towards a volumetric measure.
 
 Perhaps the biggest change under RFS2 is the addition of GHG targets for renewable fuels, which calls for a 20 percent reduction of GHG emissions relative to petroleum fuels for general renewable fuels, a 50 percent GHG reduction target for advanced biofuels and biomass-based diesel, and a 60 percent target for cellulosic ethanol. All biofuel facilities that were built or under construction before Dec. 19, 2007, are grandfathered in and aren't required to meet the minimum 20 percent GHG threshold. Biodiesel produced in that category would be added to corn ethanol production to meet the 15 billion gallon RFS for conventional biofuels in 2015 and beyond. While that may seem positive, Jobe said trying to incorporate biodiesel with ethanol under the RFS1 did not work well for biodiesel. "Biomass-based diesel is where we fit, and that's why it's critical we make that category work," he said. Under RFS2, biomass-based diesel will increase to 1 billion gallons by 2012.
 
 It was widely expected that biodiesel would have no problem meeting the 50 percent GHG reduction requirement for biomass-based diesel since earlier GHG modeling of a life cycle analysis for biodiesel showed a 78 percent GHG reduction compared to petro diesel. However, under EPA's new modeling, soy-based biodiesel showed just a 22 percent reduction in GHG impact in one analysis projecting over 100 years, and a 4 percent increase over conventional diesel in another projecting GHG results over 30 years. Waste grease biodiesel fared much better in showing an 80 percent decrease in GHG emissions compared to the diesel baseline. Much of the work underway by the NBB and the American Soybean Association involves dissecting the EPA model, looking at assumptions and data inputs.
 
 The biggest issue by far is the use of international indirect land use change impacts, outlined in an accompanying story, but others are emerging. For one, Jobe points out EPA calculations don't assign a credit for glycerin, the biodiesel coproduct that amounts to about 10 percent of the total product. "We also have found EPA is grossly overestimating the nitrogen emissions from domestic agriculture," he added. The Intergovernmental Panel on Climate Change protocol suggested that GHG emissions for agriculture be kept to the contribution from fertilizers and decomposing plant matter, and not include nitrogen from nitrogen fixation in the soil. "But that's just what EPA did," Jobe said. Correcting those two flaws should account for a significant percentage increase for biodiesel GHG benefits.
 
 The ASA is concerned about another dimension of the proposed rule triggered by the requirement in EISA that eligible biofuels come from eligible "renewable biomass" as defined in the bill, which requires crops be grown on existing cropland only. "There is a proposal to require producers certify where their feedstock comes from," said Tom Hance, ASA's Washington representative. No system exists for tracking soybeans from thousands of farms comingled in high-volume, bulk grain storage facilities. "I've been told 99 percent of the land in the U.S. would be in compliance," he says. "EPA would want to put an onerous burden of proof on the 99 percent in compliance for the 1 percent that may not be." 
 
 With July 27 pegged as the close of the comment period, Jobe said NBB staff is working to get its analysis to NBB members for its June 15-17 meeting in Washington, D.C. After that NBB will be reaching out broadly to all biodiesel industry stakeholders with a goal of generating a large response of informed and consistent comments.

Industry examines EPA's proposed rule to implement RFS2

Posted June 15, 2009

 
 The widespread excitement surrounding the biofuels market opportunity has been tempered somewhat by its many challenges, which include limited availability of inexpensive feedstocks, ethical questions of food versus fuel, petroleum price volatility, global recession, and overcapacity of production. However, a new report from <a href="http://www.pikeresearch.com/">Pike Research </a>forecasts that, despite these significant challenges, the combined biodiesel and ethanol markets will reach $247 billion in sales by 2020, up from just $76 billion in 2010.
 
 "In the near term, the biofuels market looks like a train wreck," says managing director Clint Wheelock. "The economics of ethanol and biodiesel are not yet competitive with petro fuels, and governments have pulled back some of their support. However, in the 10 to 15 year timeframe, the outlook remains very positive. The long-term commitment of national governments to foster robust biofuels markets remains solid, and technological advances and economies of scale will dramatically improve the economics of biofuels versus petroleum."
 
 Pike Research anticipates three key waves of next generation biodiesel over the next several years. Fuels based on waste greases will hit the market first in 2010. Jatropha-based fuels will begin having a significant impact on the market in 2014. The third big wave will be algae-based biodiesel, which will achieve commercial availability in 2012 and will have a deeper effect on the market beginning in 2016.
 
 Pike Research's report, "Biofuels Markets and Technologies", analyzes the complexities and paradoxes of biofuels markets. It examines key technologies that will drive the future of the industry to include second and third generation feedstocks and advanced biorefining techniques. The report also includes profiles of key players and comprehensive forecasts that quantify the potential for biodiesel and ethanol by country and region. An Executive Summary of the report is available for free download on the firm's website.
 
 Pike Research is a market research and consulting firm that provides in-depth analysis of global clean technology markets. The company's research methodology combines supply-side industry analysis, end-user primary research and demand assessment, and deep examination of technology trends to provide a comprehensive view of the Renewable Energy, Clean Transportation, Clean Industry, Green Consumers, and Environmental Management sectors. For more information, visit www.pikeresearch.com or call +1.303.997.7609.
 
 SOURCE: PIKE RESEARCH

Biofuels market to triple by 2020

Today, foams for packaging, transportation, adhesives, sealants, coatings and thermal insulation (such as those used in refrigeration and construction industries) are mostly made from petroleum products. But three researchers from Pittsburg State University in Kansas have developed a new family of glycerine-based polyols – a series of organic molecules – suitable for use in rigid polyurethane foams. 
 
 Pittsburg researchers Zoran Petrovic, Ivan Javni and Mihail Ionescu were honored for their research with the Glycerine Innovation Award. The award recognizes outstanding achievement for research into new applications for glycerine, with particular emphasis on commercial viability. Total volume of polyols for rigid foam applications is measured in millions of tons.
 
 "New uses for glycerine provide sustainable, environmentally friendly options to conventional products that they replace," said Steve Howell, technical director for the NBB. "It also helps improve the profitability of biodiesel, which will help ensure a thriving, domestically produced source of fuel for America." 
 
 In the same way biodiesel is a sustainable replacement for diesel fuel, the new polyols hold the potential to be a sustainable alternative to petroleum-based foams. 
 
 The award was presented at the 100th Annual Meeting of the American Oil Chemists' Society in Orlando, Fla. Recipients received a commemorative plaque and a $5,000 honorarium. NBB sponsors the award along with the Soap and Detergent Association.

NBB's Steve Howell (left) and SDA's Kathleen Stanton present the 2009 Glycerine Innovation Award to Ivan Javni, Zoran Petrovic, and Mihail Ionescu of Pittsburg State University in Kansas./photo: The Soap and Detergent Association

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National Biodiesel Board Recognizes Innovation from Biodiesel Byproduct

National Biodiesel Board member Bently Biofuels of Minden, Nev., is providing biodiesel to power The Virginia & Truckee Railroad's diesel-electric locomotive. The historic railroad runs from Virginia City, Nev., to Gold Hill, Nev., and is among the first railroads in the United States to use biodiesel in its regularly scheduled operations. 

 
 "Our vintage diesel-electric locomotive is vitally important to regular operations and we are very pleased with the performance of the engine burning Bently's biodiesel," said 
 Thomas Gray, vice president of the V & T Railroad. "As with all antique equipment, changes of this type can be very challenging, but the biodiesel product has certainly lived up to its promise in our testing."
 
 Passengers, particularly those in the open air cars, will have an improved experience during the passage through tunnels behind the diesel-electric. "We are excited to be working with the historic V&T Railroad," said Carlo Luri, general manager of Bently. "This is a great opportunity to show the public that it is possible to replace petroleum with clean burning, renewable fuel made from locally recycled resources. Biodiesel for the V&T is produced about 30 miles away at the Bently Biofuels plant in Minden, Nev., with cooking oil recycled from northern Nevada restaurants."
 
 Today's V&T Railroad follows the 1869 route that connected the silver mines at Virginia City to the mills in Carson City. The V&T plans to use different blends for different seasons of the year, with the highest blend used during the peak summer season, when the V&T Railroad operates up to eight trains per day.

 
 The Virginia & Truckee Railroad is celebrating its 33rd year of continuous operation, placing it among the enduring and important heritage railroads in the United States, reviving the history of the original Silver Short Line. Virginia City, the home of the V&T Railroad, is the largest National Historic Landmark in the United States and houses the most intact collection of buildings from the early West.

Bently Biofuels provides biodiesel to power The Virginia & Truckee Railroad's diesel-electric locomotive, which runs from Virginia City, Nev., to Gold Hill, Nev./photo: Bently Biofuels

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NBB Member Bently Biofuels helps Virginia & Truckee Railroad Go Green

Robins Air Force Base in Georgia was among winners of the 2009 White House Closing of the Circle Award for its efforts to promote environmental improvement. The award is in recognition of environmental oversight throughout the base, ranging from the purchase of office paper with 30 percent recyclable material to using more biodiesel. The Closing of the Circle Awards are given out in a wide range of categories, including electronics stewardship, waste/pollution prevention, recycling and others. Awards are given out in separate categories for military and civilian institutions. Robins won the award in the green purchasing category for military operations. 
 
 Most vehicles at Robins Air Force Base use some type of alternative or hybrid energy. B20 is at work in tugs, which pull aircraft into position, and refuelers capable of carrying 6,000 pounds of jet fuel to awaiting aircraft. Ben Torrey, an environmental engineer in the 78th CEG and chief of the Green Procurement Program, said the base spent $600,000 on green purchases in 2008, which is $200,000 more than the previous year. 
 
 "We did a lot more this year," he said. "I was very proud Robins won the award. It shows how strong an environmental program we have." The base is also home to the U.S. Air Force Advanced Power Technology Office. The office serves a catalyst for advanced power and alternative energy capability and promotes a host of alternative energy resources including biodiesel (B20).This is at least the second year that biodiesel played a major role in several of the winners' overall environmental stewardship efforts. The White House honored award recipients at a June ceremony at the National Institute of Health in Bethesda, Md.

Biodiesel User Awarded White House Closing of the Circle Award

U.S. ports and waterways handle more than 2 billion tons of cargo every year, but as they move the goods that drive the economy they are also emitting huge amounts of air pollution. A recent report by Energy Futures Inc., "Container Ports and Air Pollution," found that U.S. and international container shipping ports are among the world's biggest sources of air pollution and greenhouse gas emissions. The report examined the top 10 container ports in the U.S. and found that the alternative fuels are gaining momentum as a more environmentally responsible way to move goods. Biodiesel has been recognized as an option to immediately reduce emissions from diesel equipment.
 
 Two of the top 10 ports-Seattle and Tacoma, Wash., on the Puget Sound-both rely on biodiesel to power their diesel fleets. The Port of Seattle began using B99 in 2006 to fuel its fleet of approximately 70 diesel vehicles and equipment. In addition, four of the container terminals at the port use biodiesel. The Port of Tacoma uses blend levels ranging from B5 to B50, and Husky Terminal is the first terminal at the port to use biodiesel.
 
 Of course, ports provide a critical link in global trade. For example, The American Association of Port Authorities points out that "one of the most popular beverages-coffee-would not be readily available without ports. Coffee beans arrive on ships and are often roasted at facilities on port property. The roasted beans are then moved by truck or rail to inland markets." 
 
 While we would certainly not want to do without coffee, we could do with less air pollution and expect even more ports to look to biodiesel as a way to easily and immediately reduce their carbon footprint.

The Port of Seattle relies on biodiesel to power its diesel fleets./photo: Port of Seattle

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Ports Look to Biodiesel to Help Cut Carbon Emissions

Posted June 10, 2009

 
 The biofuels industry was out in force June 9 to testify at the U.S. EPA hearing on its proposed rule to implement the Renewable Fuels Standard passed in the 2007 Energy Bill. Nearly 60 people were on the docket for five minute oral testimonies, including several from the biodiesel industry, along with ethanol and advanced biofuels advocates, environmentalists and others. The hearing was followed by a two-day workshop dealing with the most contentious facet of the proposed rule-the use of indirect land use greenhouse gas (GHG) emissions in life cycle analyses.
 
 Manning Feraci, vice president of federal affairs for the National Biodiesel Board, had strong words about how the EPA proposes to meet the Energy Bill's requirement to consider direct and substantial indirect emissions in calculating a biofuel's GHG emissions profile. "This does not require the EPA to rely on faulty data and to fabricate unrealistic scenarios that punish the U.S. biodiesel industry for wholly unrelated land use decisions in South America," he said. "Biodiesel produced from domestically produced vegetable oils are disqualified from the biomass-based diesel program, making it all but impossible to meet the volume goals." If the international indirect land use assumptions were true, he pointed out, Brazilian soybean acreage should have increased from 2004 through 2008 when U.S. biodiesel production increased from 25 MMgy to 690 MMgy. Instead, Brazilian soybean acres actually decreased in that time period.
 
 Feraci also testified that EPA's GHG calculations contain a huge error in nitrogen emissions. Even the Nobel-prize winning Intergovernmental Panel on Climate Change decided nitrogen fixed in the soil by soybeans should not be considered greenhouse gas emissions, he said. "This error alone reduces the greenhouse gas emission score for soy-based biodiesel by more than 20 points."
 
 Speaking for the American Soybean Association, Ray Gaesser, an Iowa soybean farmer, also criticized the inclusion of indirect land use impacts. "The proposed rule as released contains unprecedented, untested and far-reaching indirect land use assumptions and projections which will adversely impact markets for U.S. farmers and impede our national efforts to reduce dependence on foreign oil and thus impede efforts to improve our environmental footprint," he said. "We are concerned that EPA has attributed an undue degree of land use causation to U.S. biofuels production and that EPA's assumptions do not adequately consider the other market factors (population growth, food and feed demand, timber prices, etc.) that have historically driven international land use decisions."
 
 Gaesser repeated several points made in <a href="http://biodieselmagazine.com/article.jsp?article_id=3495">earlier testimony about the impact of RFS2 on the biodiesel industry at a U.S. House of Representitive</a>s Small Business subcommittee hearing on May 21. Gaesser said the ASA is concerned about EPA's proposal to require renewable fuel manufacturers to prove that their feedstocks meet the definition of renewable biomass. Eligible biofuels are essentially limited to those produced from feedstocks grown on existing cropland. "Feedstock certification would be onerous and unworkable," Gaesser said. EPA doesn't provide a clear method to implement feedstock certification, he pointed out, and "they must recognize the challenge it would present." Most soybean processors buy from local elevators who receive and comingle soybeans from multiple farmers. "The local elevator does not know who delivered what soybeans once they go into storage," he said.
 
 Testifying for Archer Daniels Midland Co., Mark Calmes, vice president, environmental office of compliance and ethics, echoed the ASA's concerns on the requirement that producers be responsible for verifying the renewable biomass used for biofuel production. "Better approaches exist today to ensure that only existing agricultural land be used to generate renewable biomass. We believe it would be more appropriate for EPA to use the USDA's existing data infrastructure to manage these acreage issues."
 
 Calmes also addressed the indirect land use issue. "The modeling is at odds with what is observed with regard to indirect land use and should not be used to undermine the commitment to today's biofuels, as well as undermine tomorrow's cellulosic solutions," he said. "We are not saying the EPA should abandon the idea of developing the science, but no model today adequately captures the indirect impact of any fuel." He recommended the grandfathering provision for existing biofuels facilities in the 15 billion mandated volume for conventional biofuels allow a 20 percent tolerance on baseline values for permitted capacities, and allow some flexibility for plants that slowed or stopped construction due to the difficult economic climate. Calmes also recommended EPA provide a mechanism for biofuels producers to request a site specific GHG assessment. "Flexibility in this manner will ensure America produces the maximum amount of biofuels with the most desirable GHG emission profile." 
 

 In addition to echoing the comments of other industry spokesmen on indirect land use and feedstock certification, Renewable Energy Group President and Chief Operating Officer Daniel Oh recommended in his testimony that the EPA continue to value biodiesel at 1.5 RINs (renewable identification numbers). He also encouraged allowing renewable fuel producers to be able to separate the RIN at production to allow small jobbers in the marketplace to continue to handle biodiesel, without the expense involved in complying with reporting requirements. "If the EPA requires absolute compliance with the RFS standard as written, this group will remove themselves from the biodiesel marketplace," he said. Oh described the current RFS regulations as a blow to the biodiesel industry, coming at a time when the industry is facing an economic crisis. "If done successfully, the implementation of RFS-2 will help create the market demand that will allow the industry to survive," he said. 
 
 As a developer of a new, second generation feedstock, Scott Johnson, president and general manager of Sustainable Oils LLC, said the proposed rule will prohibit innovations in the development of new feedstocks such as camelina. "For those of us in small business, this regulatory uncertainty creates a very real hurdle to attract the substantial investment that is required to commercialize second generation dedicated feedstocks," he said. "We propose that the final rule should make a distinction between feedstocks that are currently in large scale cultivation and those that have limited or pre-commercial status. Pre-commercial dedicated energy crops should not be subject to a lifecycle analysis until they reach a threshold of 1 million acres of domestic cultivation. This will allow new crops such as camelina to gain a commercial foothold and develop data at an appropriate scale that will allow for a more accurate analysis of that crop's lifecycle GHG emissions from production.
 
 EPA and other agency officials at the hearing heard other points of view as well. Nathaniel Greene, director of renewable energy policy at the Natural Resource Defense Council, commended EPA for its cutting edge work in moving the science forward in quantifying indirect land use impacts. He also added that spreading those impacts across 100 years is too long, and shorter time frames are necessary to adequately meet the need to reduce GHG emissions. The amount of biomass required to meet the goals for 36 billion gallons of renewable fuels would equal the amount harvested annually from forests today, he added. "I can't image that new demand will not have an effect. Emissions from land use change can be significant, and counting them as zero would be wrong." He pointed out the RFS creates a huge demand for biofuels, and a change in focus towards waste-based feedstocks can minimize emissions. He also encouraged the EPA to commit to a process that would allow developers of new technologies with better emission profiles to get their fuel pathways certified, as the California Air Resources Board has done with its Low Carbon Fuel Standard.

Biodiesel industry comments at EPA hearing

The biodiesel production process is generally safe when managed by professionals. However, NBB and the International Association of Fire Chiefs are now offering training materials to assist biodiesel producers and their local fire departments in preparation for what everyone hopes will never occur: a fire at a biodiesel plant. NBB has posted these new safety resources on its website and will mail copies to NBB producer members.
 

 The IAFC will distribute 2,700 copies to fire departments and at events, such as the International Hazardous Materials Response Teams Conference. The materials are designed to start a proactive dialogue between fire departments and biodiesel producers. The set includes a CD of training materials, such as a PowerPoint presentation, as well as a video about response considerations. Also included is information about the chemical characteristics of biodiesel and the necessary chemicals that are used in biodiesel production. 
 
 Fire departments can use the resources as a guide to what to expect at biodiesel facilities and which fire fighting foams are appropriate. NBB and IAFC developed the materials with the support of a U.S. Department of Energy grant. United Soybean Board funding provides for the distribution.

NBB Partners with International Association of Fire Chiefs on Emergency Response Training Materials

Shortly following the European Union's imposition of new tariffs on U.S. biodiesel, Canadian companies started getting phone calls. "Several European brokers called us and asked if we would be interested in importing U.S. biodiesel and then selling it to them, so that they could still get the benefits of the blenders credit," said Barb Isman of Vancouver's Clean Energy Corp. "We declined to participate in that."
 
 While the EU has said that it will watch movements of fuel and attempt to stop loopholes where U.S. marketers could send fuel to Argentina or Canada and then redirect it to Europe to avoid the tariffs, traders report they have heard rumors. "I don't know of any specific cases but I've heard that it is happening, it's a rumor in the industry right now," one trader said.
 
 Reuters reported that the European Commission requested on May 27 to extend duties on imports of biodiesel from the United States by up to five years. Once approved, the decision must be endorsed by EU ministers. World Energy Alternatives cited a report regarding EU duties on U.S. biodiesel, which surfaced in late May, and stated that revisions have been set by the EC-including a 38 percent hike for Archer Daniels Midland and a 23 percent decrease for Cargill. 
 
 On the heels of Biopetrol's Rotterdam, The Netherlands, biodiesel plant going idle, Radio Netherlands Worldwide reported that struggling producers in Europe were victims of unfair American competition. "The U.S. government stimulates biodiesel production, offering export subsidies," the report stated. "The European Union responded to the competitive U.S. prices by introducing an import duty. The U.S. has managed to circumvent the extra duty by exporting to Europe through Canada."
 
 Several U.S. producers, including GreenHunter Energy Inc. of Grapevine, Tex., however, said they were not attempting to ship biodiesel to Europe through Canada. "But it makes sense doesn't it?" said Jack Zedlitz of Greenhunter. "If people want to get things done they're going to find loopholes." 
 
 Other sources, however, indicate that the penalties are too severe to attempt such shady maneuvers. "I think that if Netherlands radio is reporting this, then they should show me the paper trail," said Michael Cooper, president of Biofuels Brokers LLC based in Hickory Corners, Mich. "It would be a case of tax fraud to send shipments of biodiesel through Canada to Europe. Because of the tax credit, a 10-million-gallon shipment would be an infraction of $10 million dollars. There's just too much risk involved."
 
 There certainly might be ways to circumvent the tariffs on U.S. biodiesel, says Falk Von Kriegsheim of Petrotec AG, headquartered in Borken, Germany. "But even if all volumes from the United States were completely stopped, European producers would still have to compete with Argentine and Southeast Asian biodiesel," Kreigsheim said, adding that he had not heard that U.S. producers diverting shipments through Canada or Argentina to capitalize on a possible loophole in EU laws was a problem. "We have not heard these things." 
 
 Biodiesel shipping and marketing, because of the tax dollars involved, is very transparent, and therefore difficult for U.S. producers to circumvent the EU tariffs by diverting fuel through other venues. "Marine transport is extremely transparent," Cooper said. "We have to report the vessel, the source of the biodiesel as well as provide documents for traceability purposes for every shipment to the U.S. Coast Guard-I could tell you where every drop goes."

 
 The Canadian export business to Europe has boomed since the countervailing measures were put into place.

Traders say circumventing EU tariffs risky

Posted June 10, 2009
 
 USDA lowered its projections for beginning and ending stocks in the 2009-'10 marketing year reflecting higher expected exports and crush for 2008-'09. The June 10 World Agricultural Supply and Demand Estimates report raised soybean exports for 
 2008-'09 to a record 1.25 billion bushels reflecting record sales and increased projected imports for China and reduced soybean exports from Argentina. Projected soybean exports for Argentina for 2008-'09 were reduced 2 million tons to 5.4 million, the lowest in nine years. 
 
 USDA raised its projections for the U.S. soybean crush due mainly to higher projected soybean meal exports. Soybean ending stocks for 2008-'09 were projected at 110 million bushels, down 20 million from the previous month's report. Ending stocks for 2009-'10 were also reduced 20 million bushels to 210 million. Other changes in this month's WASDE report include reduced soybean oil used for biodiesel production for 2008-'09 now estimated at 1.75 billion pounds and increased soybean oil exports for both 2008-'09 and 2009-'10. Higher soybean oil exports reflect lower projected exports from Brazil due to increased biodiesel production and use.
 
 Soybean, meal, and oil prices were all raised this month. The U.S. season-average soybean price for 2009-'10 were projected at $9 to $11 per bushel, up 55 cents on both ends of the range. Soybean meal prices for 2009-'10 were projected at $275 to $335 per short ton, up $15 on both ends of the range. Soybean oil prices were projected at 33 to 37 cents per pound, up 0.5 cents on both ends of the range.
 
 Global oilseed production for 2009-'10 was projected at 421.4 million tons, down 0.7 million from last month, mainly due to lower rapeseed production. EU-27 rapeseed production was reduced 0.6 million tons to 18.5 million mainly due to lower yields resulting from dry conditions in April and May in eastern growing areas. Increased China rapeseed production partly offsets the smaller EU-27 crop. Other changes included reduced sunflowerseed production for EU-27 and reduced soybean production for Ukraine. Argentina's 2008-'09 soybean production was reduced 2 million tons to 32 
 million reflecting low yields reported as harvest nears completion.
 
 In its feed grain forecast, USDA projected lower supplies with 2009-'10 corn production estimated at 11.9 billion bushels, down 155 million from last month's projection. The national average yield was projected at 153.4 bushels per acre, 2 bushels lower as continued planting delays through late May reduced yield prospects, especially for the eastern Corn Belt. Early planting in the western Corn Belt and improved crop conditions from last year at this time, as reported in the June 8 Crop Progress report, are expected to partly offset the poor start to this year's crop in other parts of the country.

WASDE: Soybean stocks tighten on record exports

Mark your calendar for the 2010 National Biodiesel Conference & Expo. Billed as "today's challenge, tomorrow's impact," this opportunity to connect with producers, distributors, marketers, and other biodiesel decision-makers from across the country is more critical than ever. Exhibitors at this high-profile event get their names and products in front of NBB members representing every angle of the biodiesel community. Exhibitor and sponsorship details will be out soon. Check the conference website for updates and highlights at <a href="http://www.biodieselconference.org/2010">www.biodieselconference.org/2010</a>

 
 For more information, contact the NBB Conference Office at (303) 798-3664

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Saddle up for 2010 Biodiesel Conference and Expo

›BioProcessAlgae LLC and Green Plains Renewable Energy Inc. received a $2.1 million research and development grant from the Iowa Office of Energy Independence to build an algae pilot project at Green Plains' Shenandoah, Iowa, ethanol plant. Water, heat and carbon dioxide will be recycled from the ethanol manufacturing process to support algae production. The modular photobioreactor is expected to capture about 60 percent of the carbon dioxide fed into the system. Initial plans are to use the algae as animal feed. 
 
 ›Algae developer OriginOil Inc. has partnered with Belgium-based Desmet Ballestra to create a cost effective algae oil extraction system. OriginOil CEO and President Riggs Eckelberry announced the partnership at the National Algae Association's quarterly meeting. OriginOil is making progress in reducing the cost of harvesting algae and extracting the oil in its rapid, one-step process utilizing its ultrasound-based Quantum Fracturing along with pH modification and electromagnetism. In another announcement, OriginOil appointed Scott Fraser vice president of operations. Prior to joining OriginOil, Fraser had led startup clean technology firm Global Cooling Solutions from concept to prototype and full product development within 16 months. 
 
 ›The Sustainable Energy Farm at Destiny, Fla., has plots of jatropha, camelina and other new biomass crops planted for studies on future renewable energy and alternative fuel sources. Billed as the nation's first eco sustainable city, Destiny, Fla, was chosen as one of 16 founding projects of the Climate Positive Development Program, a project of the Clinton Climate Initiative that wants to demonstrate that cities can grow in ways that reduce carbon emissions to zero. Destiny will be developed in Osceola County, central Florida, integrating passive and active energy design to achieve a 50 percent reduction in energy use. On-site clean renewable energy sources are expected to provide at least half of the remaining energy demands. Anthony Pugliese, president and CEO of the Pugliese Co., is the founder of the Destiny project.
 
 › Los Angeles-based Rentech Inc. has announced plans to build a synthetic fuels and electric power plant in Rialto, Calif. The Rialto Renewable Energy Center is designed to produce approximately 600 barrels per day of renewable synthetic fuels including its trademarked RenDiesel product. The plant also plans to export as much as 35 megawatts of renewable electric power in order to benefit from incentives provided by California's Renewable Portfolio Standard Program. Rentech is currently negotiating supply agreements for the proposed feedstock, urban woody green waste. 
 
 ›Law firm Fredrikson & Byron brought two energy attorneys on board in May, as part of the expansion of its Energy Group. Todd Guerrero, an experienced energy attorney and new officer with the firm, comes to Fredrikson & Byron from Lindquist & Vennum PLLP. Alan Mitchell joins the firm as its new Senior Of Counsel. Fredrikson & Byron is a 240 attorney law firm based in Minneapolis.
 
 ›Oxford, Miss.-based Encore Energy Systems announced the execution of a Memorandum of Understanding with Hardin Fuels Inc., Kountz, Texas. The agreement calls for joint business development maneuvers to assist Hardin to secure funding for expansion. The companies will combine various resources as part of the strategy. This MOU is part of the Encore's continuing business development and growth strategy in the biofuels and alternative energy marketplace. The company said that it "is positioning itself as a premier brand in alternative fuel and energy conservation" and reported intentions to "aggressively acquire biodiesel production assets." 

 
 › Alkane Inc. launched its first commercial product this spring. Monster Diesel is a fuel additive designed to significantly increase power and miles per gallon, "while eliminating engine knock and decreasing engine wear and harmful emissions." Lutherville, Md.,- based Alkane described Monster Diesel as a concentrated, portable fuel additive that will reduce fuel consumption by 15 percent, raise the cetane level of diesel by 12.5 percent, lower overall emissions by as much as 23 percent and provide a winterizing component that increases cold flow operability. 
 
 › Renewable Energy Group Inc. signed a marketing agreement to sell biodiesel from Iowa's newest producing plant, Maple River Energy LLC, a 5 MMgy multi-feedstock facility in Galva, Iowa. According to the marketing agreement, Maple River Energy biodiesel is expected to meet REG-9000 quality specifications, which exceed ASTM D 6751. REG stated that it will market B100 or B99 from the facility under its REG-9000 product line, and the company will include the Galva site as a terminal on its pricing list. 
 
 World Energy Alternatives LLC finalized the sale of its Lakeland, Fla., biodiesel plant this spring to Orlando, Fla.-based Clean Fuel Lakeland LLC. World Energy president and CEO Gene Gebolys said the sale was an important step in repositioning itself "to adjust to the changing U.S. biofuels landscape." In related company news, an article published in May reported that World Energy was "hauled" into bankruptcy court by Elbow River Marketing, essentially claiming the company was "thrown into involuntary Chapter 7 bankruptcy protection." World Energy responded by issuing a release in which it admitted there is an ongoing legal dispute but characterized the news report as "erroneous." 
 
 › After posting losses of €3.98 ($5.54) per share in late March, Petrotec AG of Borken Germany, announced plans to lay off 20 employees as part of a restructuring program meant to ensure the company's survival. Also, the waste grease-to-biodiesel producer accepted the resignation of board spokesman Roger Böing and appointed management board member Boaz Zafrir as CEO of the company. Because of harsh market conditions, the company reported a 28 increase in sales while still experiencing losses.
 
 › Schroeder Biofuels, a division of Schroeder Industries, Leetsdale, Pa., has launched its Cold Clear purification system. Every biodiesel producer and distributor must pass the ASTM Cold Soak Filtration Test after Oct.1, 2009, and the new filtration product could help biodiesel producers meet the specification. Schroeder Biofuels tested fuel samples from producers throughout the biodiesel industry and created its own methyl esters in order to study the crystallization process that precedes the gelling of biodiesel. Schroeder designed a system involving a single pass, three-stage bank of filters and absorbers that sequentially remove those compounds likely to cause filter plugging.
 
 ›Fluid Imaging Technologies Inc., Yarmouth, Maine, is offering a new particle testing service that is particularly effective in identifying algae species. Originally developed for ocean research, the FlowCam is essentially an automated microscope that can count and evaluate microorganisms and particles. The new service includes a free assessment of the instrument's capability to analyze the proposed product or sample. This is followed by the development of test specifications, running the sample and reporting the results. 
 
 Available on CD or posted privately on the Web, the results include every image taken, along with measurement data organized in a choice of histograms and scatterplots on a spreadsheet or detailed laboratory report.

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A lab technician operates the FlowCam testing unit./PHOTO: FLUID IMAGING TECHNOLOGIES

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Business Briefs: Companies, Organizations & People in the News

Germany's once-booming biodiesel industry is facing many of the same challenges as the U.S. industry, with a number of notable differences. Last year's wild ride combining skyrocketing commodity prices, a demand-dampening world recession and biodiesel's loss of star status among environmentalists delivered difficult times for biodiesel producers. 
 
 Expansion plans have been shelved, a few producers have gone out of business, and restructurings have occurred as the industry hangs on. On top of the problems faced by most in the global biodiesel industry, German producers experienced plummeting retail demand as the government began phasing out tax incentives favoring biodiesel. Germany's primary feedstock, rapeseed, usually trades at a premium to soy or palm so it's no wonder the Germans wanted to stop cheaper, U.S. subsidized B99 imports by pressuring the 

 European Commission to impose countervailing duties.
 
 Uncertainty in the face of the pending duties and shaky world economics nearly paralyzed the German biodiesel industry in the first quarter of this year, says Mike Durels, a biofuels broker with Star Supply Renewables. Proposals in the German parliament to change blend targets and even to ban soy- and palm-based biodiesel added more uncertainty. The net effect was the biofuels trade sat back to wait it out, which in turn caused a build up of supplies-not only from less demand, but from U.S. product being shipped in to beat the expected tariffs. It wasn't until early May that the oversupply worked through, and the markets began functioning more normally.
 
 When asked if stopping U.S. biodiesel imports has had an effect, Dieter Bockey, policy specialist for UFOP, the Union for Promoting of Oilseeds and Protein Plants, says he's heard few comments from members. "Biodiesel plants are running and are producing rapeseed biodiesel because rapeseed at the moment is cheaper than soya oil," he says. While in the past year the industry has run at 40 to 50 percent of capacity at times, Bockey reports the average utilization of capacity was at 60 percent. German biodiesel capacity in 2009 is just over 5 million metric tons (1.5 billion gallons) per year.
 
 "What's hindering the market as much as anything is the change in legislation from one year to the next," Durels says. "That's causing people to hold off on signing forward contracts." Over the winter months, the German parliament eased its biofuel blend requirements, dropping them from 6.25 percent on a caloric basis down to 5.25 percent; although the biodiesel industry had one last chance in May to keep the higher blend quota. The quota increases for the next few years were reduced as well, and in 2015 the energy content quota is to be dropped with a net greenhouse gas (GHG) savings quota initiated in its place. The proposal to ban soy- and palm-based biodiesel was not supported in the European Commission's review, and was subsequently dropped. By far the biggest impact on German biodiesel producers has been the phasing in of fuel taxes on biodiesel.
 
 "There are big differences among the companies," Bockey says. While the large, established biodiesel producers are surviving, smaller and newer companies, especially those located in eastern Germany, are experiencing more problems. "We don't know the exact figures, but we assume that companies like ADM (Archer Daniels Midland Co.) or Cargill have very good competitive positions," he says. "They have integrated plants, they are leaders in food stocks, they have the oil crushing plants and markets 
 for the byproducts, rapeseed meal or soybean meal and glycerin. They are also closely connected on the regional level to the big oil companies using biodiesel as a blend component." 
 
 The blending mandates are relatively new, established to offset the loss of tax incentives. Until three years ago, Germany's hefty fuel taxes were waived for biodiesel, giving B100 a competitive edge at the fuel pump resulting in rising biodiesel sales at public filling stations each year between 2001 and 2005. In August 2006, the German government began phasing in fuel taxes on biodiesel beginning with 9 cents per liter until January 2008, when they rose by another 6 cents per liter. The fuel tax will continue to rise until it equals the petro-diesel fuel tax at 45 cents per liter in 2012. Straight vegetable oil fuel taxes are being raised in the same manner. Companies trading in fossil fuels face a hefty penalty for noncompliance of 60 cents per liter.
 
 The impact at the retail pump has been dramatic. Biodiesel sales last year were half that of 2005, with 1,167 million metric tons (350 million gallons) sold in 2008. Also, the number of filling stations offering pure biodiesel dropped from 1,900 to only 250. Another 1.5 million tons (448 million gallons) was blended into all diesel sold in the country in 2008. UFOP and other biodiesel supporters have complained that the mandated blend in all diesel fuels will hardly compensate for the loss of B100 sales, providing a market for only 1.5 million metric tons (450 million gallons) at a B5 blend. 
 
 The blend market is expected to improve some as Germany transitions to the new B7 approved in January. Germany is among the first in the EU to develop standards for a B7 blend, which will boost the blend market in Germany to 2.1 million metric tons (630 million gallons). France and Austria have also adopted B7 standards. Once adopted throughout the EU, B7 blends will provide an estimated market for 11 million metric tons (3.3 billion gallons), although that will still not fully utilize the EU's combined biodiesel capacity of 15 million metric tons (4.5 billion gallons). 
 

 EU Changes Ahead
 Looking ahead, the industry expects more changes as the EU's Renewable Energy Directive passed this winter begins being adopted. Officially published in May, the member states have 18 months to implement the directive in their national regulations. Overall, the RED calls for 20 percent GHG reductions and 20 percent renewable content from all energy sources by 2020. Transportation fuels are to reach 10 percent renewable content by 2020, although 40 percent of that is expected to come from second generation fuels and other renewable energy sources such as hydrogen and solar. The RED set targets for GHG reductions starting with 30 percent and increasing to 60 percent from 2015 forward. The UFOP has called this a paradigm shift for the industry, moving away from caloric and volumetric blending targets to more emphasis on GHG reduction goals. Sustainability requirements are another new feature that the EU biofuels community will be required to meet.
 
 Germany has already submitted its draft sustainability regulations to the European Commission for approval, outlining a broad framework for certifying sustainable biofuels and bioenergy production. Observers doubt, however, that the draft regulations can be approved and fleshed out into complete certification systems by the January 2010 deadline. 
 
 <center><img src="/images/upload/20090610105257.jpg" alt="" /></center>
 SOURCE: UFOP
 
 Sustainability is not a new concept for German agriculture. The International Sustainability and Carbon Certification project, supported by the Agency for Renewable Resources in the German Federal Ministry of Agriculture, began a pilot project in late 2006 to develop a system to certify sustainable biofuel production, documenting the bioenergy path back to the field. For the agricultural component, the ISCC is building on EU cross-compliance regulations. Cross compliance was part of the 2003 reforms in the EU Common Agricultural Policy that decoupled direct payments from production. To qualify for subsidies, farmers must comply with various regulations regarding the protection of ground and water quality, careful use of fertilizers and pesticides and species diversity. Under the EU's Renewable Energy Directive, there will be new requirements for documentation, accounting for GHG contributions and direct land use change. Biodiesel feedstocks will have to be certified as not coming from converted forests, wetlands or permanent grasslands. 
 
 Interestingly, given the current debate in the U.S., the ISCC says that, while it is incorporating direct land use change into the GHG balances during certification, "It would be unjustified to blame indirect changes in land use on biofuels only. The main driving force behind the expansion of agricultural area is the growth of population and the increased prosperity in many developing and transition countries."
 
 Rapeseed Base
 The biggest challenge for the German biodiesel industry may be getting the rapeseed production from Germany's 300,000 individual farms certified in the new system, since the majority of the country's oilseed crop is used for biodiesel. Rapeseed oil is by far the dominant biodiesel feedstock in Germany, amounting to as high as 90 percent at one point, although in recent years an increasing amount of waste vegetable oils and animal fats are being used in biodiesel production. Rapeseed acreage has grown from just 100,000 hectares (247,000 acres) in the 1980s to around 1 million hectares (2.47 million acres) in the 1990s to a peak around 1.5 million hectares (3.7 million acres) in 2007-nearly a quarter of all hectares seeded to rapeseed in the 27 member states of the European Union. The average rapeseed yield in the EU-27 is about 2.8 metric tons per hectare (approximately 1.25 tons per acre). 

 
 Rapeseed oil prices topped out in mid-2008 in Rotterdam at $1,700 per metric ton, but they began dropping off to just under $800 per metric ton and more recently climbing back to just under $1,000 per metric ton this spring. In comparison, soy oil hit $1,400 per metric ton in Chicago at the peak, dropping to $680 per metric ton early this year, and then rising back to $800 per metric ton. In May, soybean oil in Europe was trading just under rapeseed oil, which is much closer than the historical spread. Typically, German producers blend in cheaper palm and soy during the summer months, and revert to high rapeseed content for winter cold flow requirements.
 
 Perhaps the most dramatic difference in the German biodiesel industry compared to that of the U.S. is Germany's large number of crushers. The country has more than 540 small, local, crushing plants with a combined crush capacity of 800,000 metric tons. That is dwarfed, however, by the dozen large crushing facilities with their combined capacity of 10 million metric tons. That puts the crushing capacity at more than double the amount needed to supply the biodiesel capacity of 5 million metric tons in 2009. That 5 million metric tons (1.5 billion gallons) of biodiesel capacity would, in turn, supply 17 percent of the country's total diesel consumption of around 29 million metric tons per year. Considering that Germany is just slightly smaller than the U.S. state of Montana, the numbers portray a German biodiesel powerhouse. 
 
 Susanne Retka Schill is assistant editor of Biodiesel Magazine. Reach her at <a href="mailto:sretkaschill@bbiinternational.com">sretkaschill@bbiinternational.com</a> or (701) 738-4922.

German farmers plant 3.5 million acres of rapeseed per year./PHOTO: UFOP

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Vibrant splashes of yellow festoon the German landscape each May as fields of fall-sown rapeseed begin to blossom. Just as soybeans are the base of the U.S. biodiesel industry, rapeseed is the German industry's base. Biodiesel Magazine takes a look at Europe's largest biodiesel-producing nation.

Winds of Change: German Biodiesel Industry Faces Challenges

The fact that one of the world's biggest oil companies had a problem with plugged fuel dispensers in Washington state last year has driven the creation of an ASTM working group to consider imposing a limit for monoglycerides in biodiesel. The ASTM biodiesel quality spec, D6751, already has a 0.24 percent limit for total glycerin free and bound, the test procedure for which some say is awkward and cumbersome. Quality has long been an issue affecting the growth and development of the biodiesel industry, though some producers 
 believe that it's unnecessary to take the ASTM specifications further. 
 
 "There's speculation that monoglycerides can cause filter plugging at or above cloud point," says a biodiesel producer and distributor, who asked to remain anonymous. "I don't see why the biodiesel spec has to be more stringent than the petroleum spec," the source says, with a hint of indignation. "The real issues right now are in the field with tank maintenance. That's where the real problem is-with tank maintenance and lack of education." 	
 
 A consensus among sources, however, says that while improving fuel quality is important, most of the ongoing problems are occurring post-production, during fuel handling and storage operations. Supporting this claim is the fact that the call to introduce an ASTM limit for monoglycerides is not coming from the original equipment manufacturers (OEMs). "We were notified of the intention to [include a] limit for monoglycerides, and agreed it sounded good," says Brent Calcut, fluids engineer for Detroit Diesel Corp. "We're always willing to support stricter quality guidelines, but we don't have any real issues with the ASTM specs currently in place."
 
 The official inclusion of a mono limit for biodiesel is only speculation, and one that the industry is reluctant to talk about. The National Renewable Energy Laboratory is involved with ongoing work to improve biodiesel fuel quality, yet NREL engineer Teresa Alleman had little to say about particular modifications of the ASTM spec when Biodiesel Magazine asked her for details. "Currently, there is no proposal before ASTM to add a monoglyceride specification to D6751-although specific members of ASTM have discussed this possibility," she says.

 
 Attention on furthering the development of a monoglyceride spec has caused the proliferation of a lot of misinformation, which hurts the industry more than it helps; and it likely will not improve relations between producers, wholesalers, distributors and fleet operators either. Monoglycerides have been seen as a contributing cause for certain biodiesel samples to fail the cold-soak test, but the situation is more complicated than solely attributing the problem to monos. One producer cited the fact that certain products, such as Schroeder Biofuels' recently marketed Cold Clear filter, can bring biodiesel that fails the cold-soak spec into compliance while improving cold weather operability at the same time. "After this process does its work, there is the same level of monos," says the producer. "The filter system eliminates the problems associated with longer cold-soak time biodiesel without reducing monos, so I don't see the problems as being related." 
 
 Excessive monoglycerides present in finished B100, however, has been viewed by some observers as the single most influential component effecting filter plugging. The reason there might be more problems with plugged filters in the storage and distribution chain than there are in vehicle operations is that, in diesel vehicles, the fuel heats up as it circulates from the tank to the engine, maintaining the flowability of the fuel. This means that handlers and tank farm operators have to be educated on how to properly heat outside storage tanks to administer biodiesel. 
 
 Canadian Mandate, Study
 In Canada, cold weather is naturally a concern. As a result, Shell Canada Ltd., along with the biodiesel industry and the Alberta Climate Change Central organization, conducted a study testing biodiesel blends under very harsh conditions to help ease concerns from potential methyl ester users. Milligan Bio-Tech Inc., a 2 MMgy biodiesel plant in Foam Lake, Saskatchewan, states that exceeding quality standards is important to building the biodiesel industry in Canada, not to mention its importance in developing relationships with customers. 
 
 Zenneth Faye of Milligan Bio-Tech participated in the Alberta study and says biodiesel performed very well under a variety of conditions and operating procedures. Aside from one early filter change, no fleets reported any fuel-related loss of service or mechanical operability challenges during the winter months, even when temperatures reached minus 40 degrees Celsius (minus 40 degrees Fahrenheit). 
 
 The Canadian government is scheduled to introduce a national on-road biodiesel mandate as early as 2010 and no later than 2012, as long as "all practical and technical issues involving the interaction compatibility, availability and distribution of biodiesel with heavy trucks are addressed" prior to the introduction, reported the Canadian Trucking Association in May. "I've been very surprised by the comments made by the Trucking Association, because we addressed most of these issues during the Alberta study," Faye says. "I think this is just another way to delay the implementation of the mandate, which I think is primarily being pushed by the petroleum companies." 
 
 Milligan Bio-Tech's canola biodiesel will retain a pour point of minus 15 C (5 F), whereas biodiesel made from other feedstocks have difficulty flowing at temperatures below 0 C. Many of the current protocols in place regarding cold flow operability and other issues have been based on soy biodiesel, and there are currently no feedstock-specific standards, which might be needed to address fuel variability. "They're painting a picture of the biodiesel industry with one stroke," Faye says. "Petroleum from different areas or different sources, like tar sands or underground wells, is often blended together during the refining process, and in the future, I think biodiesel will also be made from a variety of feedstocks." Clearly, in many instances this is already happening. 
 
 Water and Sediment Changes

 NREL reports that even though it was an extremely cold winter, biodiesel distributors reported far fewer problems last season. It is difficult to prove exactly what some of the improvements were based on, though. "One reason is that, in Minnesota, we've been educating people on proper fuel handling and storage practices," says Kelly Strebig with the Center for Diesel Research at the University of Minnesota. "Most of the problems we've had here haven't been fuel quality related, but have been caused by microbial growth in fuel tanks along with sediment and water contamination."
 
 The Karl Fischer Moisture Specification doesn't have an official position in ASTM biodiesel guidelines at the moment, though there is a crude water and sediment testing method currently in place. The problem with water content in fuel is that it can adversely influence the calorific value and, above all, the storage life of the fuel. Biodiesel with excess water clearly has less oxidative stability, which means that there is a good chance for the formation of deposits during storage, along with the increased likelihood of frozen fuel lines and other engine components.
 
 The water test right now can only measure free water; it can't measure dissolved water. B100 can contain up to 1,500 parts-per-million of dissolved water before it separates out. 
 
 One drawback of replacing the current water test with Karl Fischer, however, is that the latter does not address sediment levels. The testing for water and sediment falls under the same umbrella, however, there's no correlation between the tests. "People are more willing to accept the new water test than they are the sediment test, because the sediment test has no real pass-fail threshold," Calcut says. "So if you replace the water test, you also have to replace the sediment test because the two are combined right now." 
 
 There have been concerns from the OEMs that dissolved water in the fuel could increase its corrosivity, so Detroit Diesel and others support stricter methods for testing water. That, however, might be an exercise in futility if storage and handling procedures aren't improved. 
 
 "The water problem is difficult to control because it doesn't happen at the refinery," says another producer. "The fuel picks up water during transportation so it's particularly difficult to guarantee dry fuel-there's hesitancy among the industry to put in a strict limit because it's so hard to control." Dirty tanks or those that are ill-maintained can contain large amounts of condensation, so some water problems are clearly post-production issues. "Making the spec more stringent won't alleviate the problem," the source says. "The water test is plenty sufficient without making biodiesel producers invest in heavy equipment." Petroleum diesel has water problems too, and some see it as unfair that biodiesel gets blamed for problems that have long been a part of the traditional fuel infrastructure. 
 
 Faye agrees with fellow producers who complain that adding another test on the front-end designed to address water contamination cannot control what happens to the fuel after it leaves the plant. "They certainly have a legitimate complaint," he says. "But we've found that the Karl Fischer method has not been that expensive to implement and it's the most efficient way to test for water." Faye adds that while post-production issues involving handling and storage are often out of the hands of producers, refineries must send out the driest, highest-quality fuel possible to their customers. 
 
 Ultimately, ongoing adjustments to ASTM D6751 may consider issues besides monoglycerides, water and sediment. Detroit Diesel says that another area of concern is with allowable ash contamination. The current spec in place allows calcium and magnesium a combined five parts per million, while phosphorous has an allowance of .01 percent. "We are concerned that at those levels too much ash is being contributed to the diesel particulate filter and could cause premature filter plugging," Calcut says. 
 
 Nicholas Zeman is an associate editor for Biodiesel Magazine. Reach him at (701) 738-4972 or <a href="mailto:nzeman@bbiinternational.com">nzeman@bbiinternational.com</a>.

Since plugging filters in the storage and distribution chain is potentially more problematic than with vehicles, handlers and tank farm operators should be well educated on how to properly heat outside storage tanks to administer biodiesel./PHOTO: JA

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The possibility of imposing a monogylceride limit for biodiesel to comply with ASTM guidelines was discussed at the National Biodiesel Conference. It's a sensitive issue, according to industry insiders. In fact, several sources contacted by Biodiesel Magazine either had no comment or asked to remain anonymous when the conversation was about tweaking the quality parameters.

Adjusting the Quality Spec Won't Alleviate Post-Production Concerns

The team at Catilin Inc. anticipates that the promise of lower operating costs, ease of use and safety will overcome the challenges of introducing its T300 solid catalyst to the biodiesel industry in these difficult financial times. Catilin's pilot plant where the T300 catalyst validation work is being conducted currently utilizes soy oil as feedstock. The company has manufactured enough of this catalyst, which is based on a nontoxic, common mineral, to supply several large biodiesel plants for one year.

 
 T300 differs from most solid catalysts that require a fixed bed and high temperature or pressure to operate, according to Dave Sams, Catilin's vice president of business development. Describing a fixed bed system, Sams says, "Inside a reactive vessel they put a plate with a mesh. The catalyst is stacked on top of that mesh and the oil flows through." In the petroleum industry, where Sams worked before joining Catilin, fixed bed systems are common but require highly paid engineers to monitor the process. The systems also require reactors designed for the higher temperatures and pressures necessary for the fixed bed catalysts to work efficiently-a costly retrofit that has largely discouraged the biodiesel industry from adopting solid catalysts.
 
 "Our solid catalyst makes it so much easier," says Larry Lenhart, Catilin CEO. "It's safe and nontoxic, and it requires less expense to run. You don't need to do the mixtures with acids and pH balance, and you can eliminate water washing." With fewer steps, potentially 30 percent of the equipment in a standard biodiesel plant can be eliminated, he adds.
 
 Sams describes the T300 as a "drop-in catalyst" that can be used as a direct replacement for the commonly used sodium methoxide catalysts. "We don't need a fixed bed because we mix in the granular powder directly with the oil," he says. The heterogeneous catalyst remains solid, and performs much the same way as the familiar homogeneous catalysts that are liquids in solution. The catalytic activity is similar to sodium methoxide, with a residence time of 40 to 60 minutes. 
 
 The biggest difference is in catalyst removal once reaction is complete. "Typically in a plant, they splash water on the biodiesel to wash out the sodium catalyst so the biodiesel is clean," Sams explains. "Because we have a solid catalyst, we don't need to do that. We use a sophisticated filter to keep the catalyst in the reactor and let the products leave the reactor without any of the catalyst in it. That means people can use a dry wash, which is more economical." 
 
 The retrofit to use the T300 solid catalyst involves the addition of a hopper and injection system to introduce the catalyst, and a filter to separate the catalyst from the biodiesel and glycerin products. Both components already exist and are off-the-shelf technologies. "The big designers have historically recommended water wash systems," Sams tells Biodiesel Magazine. "They've had to use water wash because the sodium methoxide they've used as the catalyst has to be removed down to 5 parts per million or less in the biodiesel and the water wash does a very good job of that. Those systems are typically expensive to operate because they require a big distillation column. There's a lot of energy required and if you get in places where water is in tight supply, it becomes a real problem," he says. 
 
 The T300 catalyst is nontoxic, has a long life and can be easily disposed when it is spent, Sams adds. He estimates the cost of retrofitting a 30 MMgy plant to switch to the Catilin catalyst would range between $300,000 and $600,000, depending on plant configuration. Initial discussions with potential customers are showing a payback period for the capital investment of about 12 months. The T300 catalyst itself is priced competitively with sodium methoxide. 
 
 Catilin received a $150,000 grant earlier this year to upgrade its pilot plant located at the Biomass Energy Conversion Center near Ames, Iowa. The funds from the Iowa Department of Economic Development were used to convert the pilot plant from batch to continuous flow as the final step in commercializing the technology. A series of runs at the pilot scale has shown consistent results with the soy-based biodiesel, passing both ASTM and European specifications, according to Sams, including the new and somewhat problematic Cold Soak Filtration Test. Catilin is now testing T300 with a number of alternative feedstocks.
 
 Nano-Style Biodiesel

 Catilin gets its name from combining the first syllables of catalyst with its founder's last name, Victor Lin, who serves as chief technologist at Catilin. Lin also continues in his joint appointments as an Iowa State University professor of chemistry, and as program director of chemicals and biological sciences at the U.S. DOE Ames Laboratory. His work is being commercialized through Catilin, which is partly owned by ISU with the backing of two California-based venture capitalist firms, Mohr Davidow Ventures and Leader Ventures. Lenhart and Sams, both of whom come to Catilin with experience in venture-backed development, are based in San Francisco. The rest of the Catilin team is in Ames, Iowa.
 
 <center><img src="/images/upload/20090610110116.jpg" alt="" /></center>
 SOURCE: CATILIN
 
 The T300 is a bit of detour for Lin. Biodiesel Magazine wrote about his work on developing a nano-style catalyst in October 2007, shortly after Catilin was formed. Lin's research team had completed the first generation development of a new class of biodiesel catalyst. Using nanotechnology principles, they developed synthetic nano particles that vastly increase catalytic surface area while combining acid and basic functionalities in the same catalyst. The goal is a catalyst that converts high free fatty acid (FFA) feedstocks to biodiesel in a single step, eliminating pretreatment. 
 
 Two years ago, Lin was facing two challenges in the catalyst development-increasing the reaction time for the process and reducing cost. The initial estimates for the cost of a synthetic nanocatalyst at 30 cents to 40 cents per gallon were too high, Lin recalls. "Biodiesel producers told us to squeeze the cost down to five cents to 10 cents per gallon," he says. "That becomes a challenge for any sort of synthetic." The T300, which is not a nanocatalyst, was developed in the search for economic starting materials from natural minerals and oxides that could be used in place of synthetics. Work on the nanocatalyst parallels T300 development, and pilot-scale tests are ready to go once the final T300 test runs are completed. 
 
 The nanocatalyst is being tailored to work in the same process design as the T300, Lin says. The researchers have also developed nanocatalyst manufacturing systems that do not require the pristine environments needed for nanotechnolgies used in optical or semiconductor applications. One of Lin's goals has been to find a catalyst that would work not only with higher grades of animal fats with their high FFA content, but with lower grades of poultry fats, recycled waste oil and even algae oil. "In chicken fat, they press the meat and skin, and whatever floats on top is chicken fat," Lin explains. "It can include feathers, blood, proteins and collagens." Cleaning up the lower grade, high FFA feedstocks adds layers of processes and costs. A similar hurdle faces the embryonic algae industry as well.
 
 Nanofarming Algae
 Lin likes to describe algae oil as an alphabet soup containing multiple compounds from A to Z. "We only want the ones with the letter B, for biodiesel," he says. Other compounds in the soup have been used in the pharmaceutical or food supplement industries, where much of the work on algae production originated. 
 
 Existing systems generally concentrate the algae, grind them and use solvents to extract the oil, which kills the algae in the process and produces oil that contains multiple compounds, including some that can interfere with the biodiesel process.

 
 Lin is turning to nanotechnology in the latest series of experiments he and his colleague Marek Pruski are conducting with algae at the DOE Ames Laboratory. "By combining nanotechnology, chemistry and catalysis, we have been able to find solutions that have not been considered to date," Lin says. Nanoparticles, with their high surface area and porous honeycomb shape, can target pore size to a desired molecule. "We're using this as a tiny sponge to soak up the molecules we want, and filter off what we don't want," Lin says. The most promising aspect of the nanofarming technology is that it doesn't kill the single-celled algae in the process of harvesting the oil. The goal is a system that reduces algae production costs by cutting algae culturing costs, and speeding up the production cycle plus reducing the cost of refining the algae oil before transesterification.
 
 The initial laboratory work has been promising enough that Lin and his team landed DOE support for a $1.1 million three-year project, funded with $885,000 from the DOE's Office of Energy Efficiency and Renewable Energy, $216,000 from Catilin, and $16,000 from Iowa State University in matching funds. Catilin has signed a Cooperative Research and Development Agreement with the Ames Laboratory, with the goal of bringing the project to commercialization. Phases one and two of the project will cover the culturing and selection of microalgae and the development of the nano-based extraction and catalyst technologies. Phase three will focus on scale-up of the catalyst and pilot scale testing. 
 
 Lenhart says, "When we ultimately put this exceptional extraction technology with Catilin's existing solid biodiesel catalyst, we will dramatically increase the reality of renewable energy." 
 
 Susanne Retka Schill is assistant editor of Biodiesel Magazine. Reach her at <a href="mailto:sretkaschill@bbiinternational.com">sretkaschill@bbiinternational.com</a> or (701) 738-4922.

Yang Cal is one of three doctoral graduates from ISU who have joined the team at Catilin to continue working on catalyst development./PHOTO: PHOTO: BOB ELBERT 

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Catilin's bench scale work developing new solid catalysts has been validated at pilot scale, with the first ready for commercialization./PHOTO: BOB ELBERT

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Catilin Inc. is rolling out T300, a solid catalyst that sidesteps the need for a fixed bed. The company is also making progress in nanocatalyst and nanofarming technologies.

A Solid Catalyst Unlike the Rest

According to the U.S. DOE Alternative Fuels and Advanced Vehicles Data Center, biobutanol has an energy density only 10 percent to 20 percent lower than gasoline. It's compatible with the current gasoline distribution infrastructure and would not require new or modified pipelines, blending facilities, storage tanks or retail station pumps. Biobutanol can be efficiently blended with ethanol and improve the blending of ethanol with gasoline, and can be produced using existing ethanol production facilities with relatively minor modifications. Under current U.S. EPA regulations, biobutanol can be used as an oxygenate with gasoline in concentrations up to 11.5 percent by volume. 
 
 While possessing these attractive qualities, the commercial-scale production of biobutanol has been hampered by challenges, not unlike many other renewable fuels. Production costs typically have amounted to nearly double those of ethanol since traditional fermentation processes have proven too inefficient to make biobutanol in large amounts.
 
 By virtue of innovation in process technologies, however, more players are entering the game. With a slightly different approach than others, Diesel Brewing, a company based in Salem, Ore., is moving full-steam ahead with plans to build multiple stand-alone biobutanol production facilities in the Pacific Northwest. 
 

 Tweaking Technologies
 Don't let Diesel Brewing's company name throw you off-it doesn't manufacture or plan to manufacture diesel fuel. Rather, the company will produce biobutanol for use within local fuel markets as a diesel blending agent-a competitor of sorts with biodiesel and other biomass-based diesel blend agents. 
 
 Uniquely, Diesel Brewing will use a gasification process to convert biomass into a synthesis gas that is cleaned, fed into a catalytic reactor and purified to generate biobutanol, ethanol and methanol. The individual alcohol components and the ash from the post combustion process are then separated and stored.
 
 The plan to focus on biobutanol was developed from thorough investigations and comparative analyses, according to Diesel Brewing CEO Mark Stapleton.
 
 "We originally looked at a variety of fuels such as cellulosic alcohols and synthetic diesel," he says. "We were drawn to biobutanol after several months of investigating various existing technologies, which is what drove us to biobutanol." 
 
 Stapleton says other fuels they looked at simply were not providing satisfactory percentage yields. "There were too many other products as a result of that process, so we were looking for an alternative where we could get higher yields for our primary product-which is going to be biobutanol," he says. 
 
 By changing the conversion chemistry, the company could produce other fuels such as biodiesel or dimethyl ether, or anhydrous ammonia for the production of fertilizer. "For now, we'll focus on the production of biobutanol," Stapleton says. He could not disclose the company's preliminary yield estimates, but Stapleton says yields will soon be validated at Diesel Brewing's first pilot plant. Construction on the pilot plant is slated for September. "It will be a small plant located right here in our back yard that will process roughly a ton of biomass per day," he says. "It's due to be commissioned in December, and we're on track for that." 
 
 Diesel Brewing will develop baseline data on feedstocks from the pilot plant, along with collection of data on synthesis gas production, emissions composition and relative thermal efficiencies. The conversion technology consists of multiple existing platforms being redesigned and integrated. "We're not purchasing any machines," says Diesel Brewing Chief Operations Officer Kevin Caldwell. "Rather, we're buying many different parts from different people." 
 
 Unitel Technologies Inc., a Chicago area system engineering company, has designed the basic system for Diesel Brewing. "We used other people's platforms that are already in the public arena, and basically had Unitel redesign them," Caldwell says. "For instance, the gasifier itself-to do the thermal conversion is a design and working system that sits at the University of Utah in Salt Lake City, but they use it for an application that's a little bit different," he explains. "We took that public domain gasifier, gave it to Unitel and told them what we wanted it to do, and they redesigned it for us. [The technology is] the result of the collaboration of many bright people and their work over the past 50 years, refined one more time to fit our specific feedstock."

 
 Caldwell says the same is true for the development of the company's synthesis gas cleanup, which was developed through the selection and redesign of existing systems in order to suit the company's catalyst. 
 
 Pressure vessel and refractory specialist CH Murphy Clark-Ullman Inc., based in Portland, Ore., will work with Diesel Brewing for the fabrication and installation of multiple specialized pressurized vessels. All design engineering and technology rights will be held by Pacific BioPower, which is said to be an associated company to Diesel Brewing.
 
 Community Sustainability 
 Aside from the distinctive advantages biobutanol has compared to other fuels, Stapleton says the real thrust that adds to Diesel Brewing's plans is its focus on developing small-scale biorefineries. "Most of the biorefineries across the world are very large in nature," he points out. "Every day they consume 500 to 1,000 plus tons of biomass. We're unique because we're focusing on a much smaller amount of biomass so we won't over-consume." 
 
 Stapleton expects a typical facility to process 120 to 125 tons of biomass per day. "We can go to a fairly small, rural community and not have such a huge impact on the biomass availability-consuming more than is there-and be forced to ship biomass from other places like Ohio," he said. 
 
 Although the feedstock processing capability of Diesel Brewing's technology is relatively flexible, Caldwell says the company will utilize a narrow group of materials. "It won't be a biomass recycling center," he says. "We've pretty much relegated ourselves to agriculture waste and woody biomass. There are a couple of reasons for that. Everything has a little bit different chemical make-up and by narrowing that just a little bit it gives us a narrower range of chemistry that we have to deal with in the gasifier and the catalyst unit."
 
 Oregon currently has an estimated 9.8 million bone-dry tons of woody biomass resources and 1.5 million bone-dry tons of agricultural residues available for energy use each year. 
 
 The state also has many renewable energy incentives, such as a business tax credit of 50 percent of eligible project costs (up to $10 million in credits) for facilities that use renewable energy resources and plants that manufacture equipment used for renewable energy projects.
 

 In addition to biofuel production, electricity will be generated at Diesel Brewing's plants. "We'll have our own internal electrical needs, so we'll use what we need and sell the balance of it," Caldwell says. Out of the estimated 5 megawatts (MW) to be generated, Diesel Brewing facilities will require 1 to 1.5 MW. 
 
 "Oregon's a unique state in that we can either wheel it to the grid as a small producer under the PURPA (Public Utility Regulatory Policies Act) or, if we have a neighbor or a local co-op or public utility district, we can actually execute private power contracts," Caldwell says. Our preference will be to sell it to a local co-op to distribute it locally, but there are a lot of options in Oregon for what we can do with the balance of the electricity." 
 
 Under state regulations, Oregon utilities must meet a percentage of their retail electricity loads with renewable resources. For the three largest utilities-Portland General Electric, Pacific Power and Eugene Water and Electric Board- the targets are 5 percent in 2011 and 25 percent by 2025. For the other utilities in the state, the targets are 5 percent or 10 percent by 2025, depending on utility size. If any of these utilities builds or signs a new contract with a coal-fired plant, the targets for the large utilities apply.
 
 Mapping the Future
 Diesel Brewing intends its plans to materialize quickly. After the start-up of its pilot facility in December, work on a 10-ton per day production unit in Boardman, Ore., is projected to begin. It will demonstrate production yields, fuel ratios and gas cleanup procedures, and allow the company to further fine-tune and balance its processes. Completion of the 10-ton per day plant is targeted for October 2010. Based on findings from the two preliminary test plants, a commercial-scale plant that would use at least 100 bone-dry tons of biomass per day will be constructed. After that, the company anticipates building more refineries across Oregon when all the kinks are worked out. 
 
 "The bottom line is we're not transporting biomass into our communities and transporting liquid fuels out," Stapleton says. "Our whole business philosophy is to establish small, rural plants near where we get our feedstock, and then produce and consume the biofuels within that same community." 
 
 Anna Austin is an associate editor of Biomass Magazine. Reach her at <a href="mailto:aaustin@bbiinternational.com">aaustin@bbiinternational.com</a> or (701) 738-4968.

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Kevin Caldwell Chief Operations Diesel Brewing 

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Salem, Ore.-based Diesel Brewing is working to implement a unique business model for the gasification of waste biomass into biobutanol and other valuable energy products.

Brewing Biobutanol in Salem

Posted June 9, 2009

 
 Responding to President Obama's directive to expedite and increase the production of biofuels, Agriculture Secretary Tom Vilsack today announced that USDA met its 30-day deadline to help produce more energy from homegrown, renewable sources. 
 
 "Further developing the biofuels industry helps create jobs and stimulates rural economies, an important part of getting our economy back on track," said Vilsack. "President Obama and I are committed to advancing clean and renewable energy as it creates jobs domestically and boosts tax revenues at all levels of government." 
 
 On May 5, President Obama asked USDA to expedite the biofuels provisions of the energy title of the 2008 Farm Bill within 30 days, including the following: 
 
 - Providing loan guarantees and grants for biorefineries; 
 - Expediting funding to encourage biorefineries to replace the use of fossil fuels in plant operations; 
 - Expediting funding to encourage production of next-generation biofuels; 
 - Expanding the Rural Energy for America Program; and 
 - Providing guidance and support for collection, harvest, storage, and transportation in biomass conversion facilities. 
 
 Details about USDA's recent efforts to support the biofuels industry are: 
 
 Loan Guarantees for Biorefineries. USDA is currently reviewing a $25 million loan guarantee application to retrofit a biodiesel refinery to produce second-generation biofuels. The funding of this venture will be the second such guarantee to be funded under the 2008 Farm Bill. In January, USDA awarded an $80 million loan guarantee for the production of cellulosic ethanol. A second round of applications received as part of an April 30, 2009 solicitation for applications is currently under review. These involve second- and third-generation biofuel technologies to produce cellulosic ethanol, biodiesel, and methane gas and electricity. Awards for the second round are projected for Sept. 15, 2009 
 

 Assistance for Biorefineries Replacing Fossil Fuels. USDA will provide up to $20 million to offer financial assistance to biorefineries to replace fossil fuels used to produce heat or operate biorefineries with renewable biomass. 
 
 Encourage Production of Next-Generation Biofuels. USDA will provide $30 million to provide payments to eligible agricultural producers to support and ensure an expanding production of advanced biofuels. 
 
 Rural Energy for America Program. USDA is now accepting applications for feasibility studies, loan guarantees, and grants for renewable energy systems and energy efficiency improvements as well as for applications to conduct energy audits on behalf of agriculture producers and rural small businesses. Funds will be used to assist agricultural producers and rural small businesses by conducting energy audits and providing recommendations and information on renewable energy development assistance and improving energy efficiency. These projects - energy audits and renewable energy systems development/energy efficiency improvements assistance - are designed to help agricultural producers and rural small businesses reduce energy costs and consumption and help meet the nation's critical energy needs. For more information on this program and application deadlines, please visit www.rurdev.usda.gov. 
 
 Biomass Crop Assistance Program. USDA is launching a program that will provide compensation for the collection, harvest, storage, and transportation of biomass intended to meet the country's energy needs in a more sustainable manner. The program will provide financial assistance for delivery of eligible biomass material to conversion facilities that use biomass for heat, power, bio-based products or biofuels. USDA, through the Farm Service Agency, will provide matching payments for collecting, harvesting, storing and transporting eligible materials at a rate of one dollar for each dollar per dry ton paid by a qualified biomass conversion facility for the biomass. The matching payments will not exceed $45 per ton and material providers will be eligible for up to two years of payments. For more information on this program, visit www.fsa.usda.gov/energy.
 
 SOURCE: USDA

Programs will provide critical support to nation's biofuels industry

USDA meets Obama's 30-day biofuels directive to help meet country's energy needs

Internal audit planning is built from the annual risk assessment, and incorporates the objectives of the charter of the internal audit function. That development of the internal audit function reflects the priorities and principles incorporated into the internal audit strategy, which serves as a foundation for all internal audit activity. Internal audit planning is conducted annually, and includes monitoring of significant financial reporting and operational processes that pose inherent risks. Based on updated organizational and process level risk assessments, that planning also acknowledges new potential risks posed by various changes that may have occurred within the past year, or those which may be anticipated for the current year.
 
 These changes can include situations such as the integration of a new subsidiary, or a reclassification in organizational structure (e.g., re-establishing a private enterprise as a publicly held corporation). Such a transition brings different governance and financial reporting requirements, which means implementing new functions and processes to support them. During implementation, some requirements may not have the needed coverage of controls or may receive insufficient attention, placing the organization at risk for noncompliance.
 
 Installing major information technology (IT) systems requires extensive prior planning and testing of new hardware and software to ensure that various functions and interfaces work properly. Established processes must be revised to fully capitalize on the capabilities afforded by those new systems. Existing management policies and procedures may not address every difficulty that can arise when making such a migration.
 
 Over time, people in key positions acquire knowledge and insight that doesn't always transfer quickly to those who replace them. Someone working in a crucial, newly created post may also face a formidable learning curve. Such scenarios present the possibility that a critical responsibility may be overlooked, or that a significant error in judgment may occur. 
 
 Organizations undertake re-engineering and restructuring efforts to operate more efficiently and to focus more effectively on business strategies. Those transformations require devising new processes for various functions, and defining new roles and duties for individuals and business units. With attention focused on making those transformations, risks can go unrecognized or unaddressed.

 
 Prototype testing, market research and other planning efforts seek to reduce the uncertainty that accompanies the introduction of new products or services. Unanticipated difficulties in production or delivery, however, can still arise. Defects not recognized in previous testing may become evident following customer purchases. Widespread marketplace acceptance cannot be guaranteed either. All of those factors make such introductions a special concern for risk.
 
 The opening of a new facility likewise presents potential risks. Managers may discover that building configurations and equipment installations are incompatible with actual workflows and needs. New facilities are also typically staffed with large numbers of recently hired employees – employees that are not as adept in resolving problems as the more seasoned workers. Those concerns and others may not surface until a new facility becomes operational.
 
 Compliance requirements do not remain static. Each year brings revised statutes for various industries and types of organizations, revisions that present risk of noncompliance.
 
 The annual internal audit plan acknowledges the potential threats posed by those and other changes that occur throughout the year. The plan is usually prepared and presented to management for pre-approval at the same time as the organization's annual budget. The audit committee will receive the proposed internal audit plan for the year and evaluate it based on its understanding of the organization's operating strategies. The internal audit plan will coincide with the annual budget and the strategic initiatives of the organization to ensure appropriate monitoring.
 
 With each annual plan, the internal audit function advances efforts to assess and monitor risks associated with asset protection, loss prevention, and compliance throughout the organization. Knowledge gleaned from internal audit activities enables the board of directors and management to address emerging risks, and it allows them to mitigate any risks deemed unacceptable with the entity's risk appetite.
 
 Determining the Scope for Internal Audit Planning
 The risk-rated internal audit universe determines the items to be included in the annual internal audit plan. Based on their risk ratings, some items may require attention every other year, or once every three years. The annual internal plan incorporates the items scheduled for evaluation that year.
 
 Any new risks identified in updated risk assessments are considered for the audit plan. The results of past annual audits are also evaluated to determine the scope for the present plan. Previous annual audits may have revealed that items originally deemed high risk may only require attention every other year, while other processes that had been regarded as low risk may require evaluation annually, or at least every other year.
 

 The audit plan also needs to incorporate annual regulatory compliance requirements facing the organization, such as the Sarbanes-Oxley Act of 2002, the Federal Deposit Insurance Corporation Act of 1991, or any other relevant statutes. Evaluating such factors and considerations lets the internal audit department develop a plan's scope that directs sufficient attention to the current risks facing the organization.
 
 Determining HR Needs for Internal Audit Plan
 The scope of the internal audit plan provides a basis for determining the necessary skill set levels and estimating the amount of labor hours required for the annual audit. Specific skill-set needs vary from one organization or industry to another, but internal audits generally require individuals with expertise in management planning and review, financial reporting, IT and operations. The plan's scope helps the internal audit department establish skill set levels and priorities that meet the organization's needs.
 
 Varying levels of experience and expertise among internal audit department staff also influence the total number of work hours required by the annual audit plan, as do the number of items included in the plan. Consideration of these factors lets the internal audit department determine whether the department's present staff can execute the annual plan. If the plan's total required work hours exceed current available staff hours by 1,800 hours for a particular staff level and skill, the department should consider hiring an additional staff member. If the amount of additional required labor is less than 1,800 hours, or if the particular skill set needed doesn't merit hiring another staff member, the department may contract for necessary expertise with an outside service provider.
 
 Determining Timing for the Internal Audit
 The internal audit customer's schedule influences the optimal timing for the internal audit and various aspects of that plan. Customers include senior management, the audit committee and board of directors, managers of various business units and auditee departments. The availability of the internal audit team, including outside service providers, also influences the scheduling for various evaluations. Compliance requirement deadlines and external auditor requests will also influence the timing of certain internal audits.
 
 Aspects of the internal audit plan can be executed at different times throughout the year, with a goal of minimizing business disruption. A major consumer retailer, for example, may generate a disproportionately large share of its annual earnings between Thanksgiving and Christmas. Conducting audit activity during December could distract managers and staff members from focusing on meeting customer needs and maximizing sales revenue.
 
 While minimizing business disruption, the internal audit plan also needs to address areas at times when vulnerabilities are most evident. In the retailer's case, that could mean conducting numerous assessments in January when awareness of difficulties encountered during the Thanksgiving to Christmas peak sales period would still be quite high. Other elements of the plan could then be executed between January and Thanksgiving.
 
 In addition, the internal audit plan should be designed with flexibility. The internal audit function is often called upon to consult on important operating initiatives, such as an implementation of a new operating system or the divestiture of a division. The internal audit plan will also need to accommodate the increase in scope of a particular audit based on findings during the audit, or the addition of a new audit area based on an occurrence or concern of management.

 
 Residual Benefits of the Internal Audit Function
 The internal audit plan reflects the internal audit strategy, considers the annual risk assessment and builds upon the development of the internal audit function. Planning for an annual audit requires addressing resource and scheduling concerns for both the internal audit customer and the internal audit team. Such planning helps balance assessment needs against resource constraints and the potential for business disruption.
 
 By planning annual audits, the internal audit department assures that items identified in the internal audit universe receive the attention required by its risk ratings. Evaluations of past audits also help the internal audit team determine the appropriateness of previous risk ratings. This information lets the internal audit team plan and execute annual audits more efficiently and effectively. The annual audit plan also addresses any new risks that may have arisen since the previous year's audit. 
 
 The information gleaned from the internal auditing department's monitoring and risk assessment efforts makes the audit committee and management aware of the risks facing the organization. Based on those assessments, the board of directors and management can determine whether identified risks align with the organization's risk appetite. Using enterprise risk management methodology, the board and management can then choose the most appropriate responses to risks deemed unacceptable. Such efforts help to protect the organization from unrecognized risks. Continual monitoring of risks also provides assurance to employees, investors and other stakeholders, enabling them to place greater confidence and trust in the organization. 
 
 Alyssa G. Martin, CPA, MBA, is the Dallas executive partner and firm-wide partner in charge of the Risk Advisory Services group at Weaver and Tidwell LLP. Martin can be contacted at 817.332.7905 or 972.448.6975. For more information, visit <a href="http://www.weaverandtidwell.com">www.weaverandtidwell.com</a>.

Alyssa Martin Risk Advisory Services Partner, Weaver and Tidwell LLP

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Installation of new IT systems requires extensive planning and testing of new hardware and software to ensure properly working functions and interfaces.

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New plants may, but will not necessarily, experience more of a challenge in annual risk assessment than those facilities which have gone through it before./photo: REG Inc.

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Internal audit planning, conducted yearly, is an important part of an overall business strategy, which helps keep finances in order and limit risks.

Sound Planning Precedes Effective Annual Internal Audits

In April, the U.S. Environmental Protection Agency took the first step in regulating greenhouse gas (GHG) emissions by formally acknowledging that carbon dioxide (CO2) emissions are a danger to "public health and welfare." CO2 will now be tracked and monitored by the Clean Air Act. Increasing energy security and decreasing emissions that lead to climate change are the main motivators for escalating interest in regulation of GHG emissions. CO2 emitted from burning fossil fuels has been singled out as one of the top GHG contributors to global warming. 
 
 Capping allowable CO2 emissions appears inevitable. The initial industries affected include suppliers of fossil fuels, manufacturers of vehicles and engines, and facilities that release 25,000 metric tons or more per year of GHG emissions. Enforcing the cap on emissions will most likely be done through cap-and-trade-a system of quotas, allowances and credits. If an organization reduces emissions by more than its quota, it ends up with tradable credits. If the opposite is true, then the organization must buy credits. The CO2 cap decreases over time and credits become more expensive, so organizations have an incentive for reducing CO2 emissions.
 
 Josh Margolis, who oversees environmental and renewable energy markets for CantorCO2e, compares CO2 cap-and-trade to acid rain legislation in the mid 1990s. "Successful reduction of sulfur dioxide (SO2) through acid rain legislation offers us lessons that we can use when designing a CO2 cap-and-trade," he says. "The SO2 legislation granted allowances and then gradually reduced them over time. Instead of just taxing the polluters on emissions, the program incentivized utilities to turn their waste streams into profit streams, thus solving the problems sooner. And it made over-compliance a prerequisite for trading. The only sources that can sell allowances are those whose actual emissions are below the quantity of allowances that they hold." 

 
 The Acid Rain Program was a 1990 amendment to the Clean Air Act that went into effect in 1995. Congress is now amending the Clean Air Act to reduce CO2 emissions. The amendment requires EPA to establish an emissions baseline for all fuel, and then set emission caps and determine reduction requirements. A bill drafted by Chairman Henry Waxman of the Energy and Commerce Committee, and Chairman Edward Markey of the Energy and Environment Subcommittee, was introduced this spring. In the transportation section of the bill, the EPA is tasked with determining the lifecycle GHG emissions of all transportation fuels, as well as determining the fuel emission baseline, then applying the baseline to refineries, blenders and other fuel providers. Once the baseline has been set, the annual average lifecycle GHG emissions must be reduced by a certain percentage below the fuel emission baseline. The regulation permits transportation fuel providers to generate credits by achieving greater reductions. In the proposed legislation, transportation fuel providers could generate, bank and trade credits. Credits can then be traded on carbon exchanges similar to the way stocks are traded. 
 
 Europe has done something similar by launching a European Union-wide carbon cap in 2005. The carbon cap sets a quota of carbon emissions permits called EU allowances (EUAs) for factories and power plants. This EUAs system is currently unregulated, but some political leaders and environmental trade analysts are calling for regulation. And the U.S. is paying close attention. 
 
 On lifecycle GHG emissions, the Waxman/Markey bill sets the standard emissions of biofuels at a level no higher than the fuel emission baseline. Determination of baseline GHG emissions estimates are left to the EPA administrator. So far, this has been a challenge for the biodiesel industry because EPA is incorporating indirect land use in the calculation. 
 
 Indirect land use can constitute anything from deforestation for growing soybeans and palm in Brazil and Indonesia, to a farmer's decision to grow fuel crops instead of food crops. 
 
 Including indirect land use in the calculation has increased the lifecycle GHG contribution for biodiesel. 
 
 In May, the EPA announced implementation of approved changes to the federal Renewable Fuel Standard known as RFS2. Delays in enforcing RFS2 as passed in the Energy Independence and Security Act of 2007 were due in part to the complexity of measuring lifecycle GHG emissions. Enactment of the RFS2 proposal would mark the first time that lifecycle analysis of GHG emissions will be used to determine impacts over 30-year and 100-year time periods. Legislation of lifecycle CO2 would be great news for the biodiesel industry if legislators agreed with the U.S. DOE and USDA's assessment of biodiesel lifecycle CO2 emissions. 
 
 According to the 1998 biodiesel lifecycle study, jointly sponsored by DOE and USDA, 100 percent soybean oil biodiesel reduces lifecycle CO2 emissions by 78 percent, and B20 by 15.66 percent compared to petroleum diesel. As anyone producing or burning biodiesel knows, fuel burned in an engine emits CO2 at the tailpipe. Biodiesel and petroleum diesel produce comparable carbon emissions. The difference lies in the big picture-total CO2 output over the lifecycle of the fuel. The DOE/USDA lifecycle study looked at the whole picture from "cradle to grave," beginning with extraction of raw materials through to end-use applications. A major benefit of soy-based biodiesel is the fact that soybeans absorb CO2 from the atmosphere in the growing process. They literally use solar energy and turn CO2 into stored energy. This effectively recycles CO2 in the atmosphere because the same CO2 released from biodiesel combustion is taken up in the next soybean crop. Crude oil releases CO2 when pulled from its containment under ground. The DOE/USDA study concluded that replacing petroleum diesel with biodiesel "is an extremely effective strategy for reducing CO2 emissions."
 
 If only everyone would agree on this assessment, biodiesel would far exceed the renewable fuel qualifications under the RFS2. Instead, indirect land use in other countries could affect the lifecycle score for biodiesel. The U.S. biodiesel industry did see some light when EPA stated that the lifecycle analysis may not solely determine eligibility of a renewable fuel under the RFS2. The EPA indicated the displacement of petroleum by biofuels over time can overcome some land use diversions from food or forests to fuel. Even so, most U.S. biodiesel producers and farmers are using sustainable feedstocks and practices, so the industry is looking for a fair assessment from the EPA. 
 

 Margolis, who has advised the California Energy Commission on GHG mitigation strategies, stresses the importance of EPA applying equal amounts of scrutiny to all renewable fuel sources. "There's no 'easy button' for lifecycle analysis," he says. "If nuances are missed, viable solutions could be left out of the mix." 
 
 The EPA is surely paying attention to California where the California Air Resources Board's (CARB) Low Carbon Fuel Standard (LCFS) was adopted April 2009. California plans to reduce GHG emissions by 10 percent by 2020 or about 15 million metric tons a year (CO2 equivalent). The LCFS is designed to reduce California's dependence on petroleum, which sounds good for biodiesel, but the LCFS also takes into account land use changes overseas. Biodiesel made from waste oil, animal tallow or sustainable feedstocks should have no problem meeting the reduction standards set forth by the LCFS. 
 
 In addition to reducing CO2, the current form of the Waxman/Markey bill requires reduction of black carbon, or particulate matter. The bill also proposes to reduce "unnecessary fossil fuel burning that produces black carbon where feasible alternatives exist." The biodiesel industry knows that particulate matter reduction is one major benefit of burning a biodiesel blend. 
 
 Overall, the activity surrounding CO2 reduction could benefit the biodiesel industry. Legislation reducing use of fossil fuel in transportation could open new markets for biodiesel. 
 
 But recent figures on biodiesel production show a marked decrease-down to 2006 levels by March, which indicates the industry needs help. Enforcing the RFS2 may help the biodiesel industry pick up the pace as fuel producers start to fulfill their 2009 obligations to include 500 million gallons of biomass-based diesel in the mix of transportation fuel sold in the U.S. As long as the biodiesel industry continues to make gains in sustainable feedstocks, biodiesel will be viable as one of the solutions for the nation's goals of reducing GHGs and increasing energy security. 
 
 Sharon Bell is a public relations professional representing clients in the biodiesel industry. Reach her at <a href="mailto:sharonb@shriverproductions.com">sharonb@shriverproductions.com</a> or (972) 352-8698.

Multifeedstock biodiesel plants, such as the 30 MMgy Central Iowa Energy LLC facility shown above, will fare better in GHG reduction requirements when waste materials are incorporated into the feedstock stream./PHOTO: REG INC.

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The U.S. is playing catch-up to the rest of the world in terms of controlling carbon emissions. With the infant science of indirect land use change looming over all renewable fuels production, what will a carbon cap-and-trade system mean for the biodiesel industry?

What a Carbon Cap Could Mean for Biodiesel

Posted June 10, 2009
 
 The Clean Diesel Program administered by the U.S. EPA is up and running, creating an opportunity for biodiesel in meeting a goal of reducing diesel emissions. The National Clean Diesel Campaign, funded by the American Reinvestment and Recovery Act of 2009, is a multifaceted program focused on promoting economic recovery, creating jobs and reducing diesel emissions.
 
 The use of biodiesel fuel is one recognized retrofit technology used to reduce diesel engine emissions, and the NCDC is creating greater demand for the renewable fuel said Carlos Guzman, president of Global Alternative Fuels LLC in El Paso, Texas. Global Alternative's facility is currently expanding and sells its fuel to Western Refining, a fuel marketer and distributor also in El Paso. "We are going to be delivering everything by rail now to our marketer-instead of some by rail and some by truck- so we are selling more fuel," Guzman said. "We are definitely seeing the market open up because of the National Clean Diesel Campaign." 
 
 Clean Diesel funding will cover engine repowers, replacements, school bus upgrades, idle reduction technologies and will also assist fleets with the cost of purchasing cleaner fuels like biodiesel. "At least 50 percent of the benefits will be dedicated to public fleets but will also include private fleets contracted or leased for public purpose, like private school buses or refuse haulers," EPA stated.
 
 More than 11 million engines in operations today do not meet EPA's new clean diesel standards, but could be on the road for 20 to 30 more years. In addition to helping expand the market for biodiesel, the NCDC is creating demand for diesel emission reduction technologies, EPA said, and it will be careful evaluating given technologies for their eligibility to receive funding for development and implementation.

EPA's Clean Diesel Program up and running

Posted June 15, 2009

 
 The two-year-old<a href=" http://www.actionforcleanenergy.org/ "> Action for Clean Energy Inc</a>. is expanding its outreach to communities seeking clean energy solutions, announced Andrew Stern, executive director. The Massachusetts-based organization recently received notice of its tax exempt 501(c)3 status from the Internal Revenue Service. "The tax-exempt status along with the initial gift from the Foundation for the Carolinas will allow Action for Clean energy to engage more effectively with municipalities and communities to promote, develop and implement clean energy solutions," Stern said.
 
 A long-time promoter of solar photovoltaics and wind energy, Stern said he recently has added biodiesel to his repertoire with ACE sponsoring a jatropha project in Haiti. He would like to see biodiesel utilized more in clean cities initiatives, he added. "That is the goal, to have biodiesel from jatropha, camelina, etc., be a large part of a clean future."
 
 ACE's mission is to: 
 <ul>
 &bull; Educate, inform, and train the general public, including citizens, public officials, communities, and organizations about (1) renewable, clean energy technologies and (2) energy efficiency, conservation practices, and recycling.
 &bull; Engage in any and all activities to charitably promote or otherwise provide charitable assistance in furtherance of the construction, installation, and deployment of renewable energy sources and the use of energy conservation measures.
 &bull; Be a resource for green energy development, employing easily accessible information-sharing techniques and mediums such as the Internet.
 &bull; Inform the general public about renewable, clean energy projects, such that these projects can reach proper funding and invest levels while providing investors with potential green investment opportunities.
 &bull; And, be exclusively charitable, scientific and educational in its nature.</ul>
 

 ACE provides services such as workshops and training on community clean energy development.. ACE has worked with organizations such as the Northeast Division of the U.S. EPA, National Renewable Energy Labs, the U.S. DOE, American Wind Energy Association, Windustry.org, the Massachusetts Climate Action Network and the Institute for Professional and Executive Development.
 
 ACE provides education and outreach to numerous colleges and universities, including Harvard University, Massachusetts Institute of Technology, Suffolk University, Boston University, Northeastern University, Worcester Polytechnic Institute, Brandeis University, and Tufts University. ACE is in the early stages of developing charter chapters of ACE at local colleges and universities.
 
 ACE is currently developing a relationship with New Generation Energy, another non-profit organization, to develop project-specific capabilities for renewable, clean energy development projects, with the goal of creating green investment opportunities for eco-friendly, socially responsible investors and providing funding options for communities that may otherwise not able to afford to get involved in renewable, clean energy development projects.

Non-profit seeks clean energy community solutions

Posted June 15, 2009
 
 <a href="http://www.cfosystemsllc.com/ ">CFO Systems LLC</a> announced Edgar Hicks has joined their team of expert CFO outsourcing specialists. The Omaha, Neb.-based company provides chief financial officers and controllers on a contract basis within the Midwest. Hicks will support renewable fuels and commodity-related clients in their risk management efforts, calling upon his experience in the grain industry. With the volatility of grain markets widening price swings in recent months, "my function is to help flatten it out a little bit, " Hicks said. He has worked at FCStone Group Inc., Cargill Inc., the Chicago Board of Trade, as well as the general manager of Farmers Co-op in Clarks, Neb., and as a grain merchandiser with the Pillsbury Co. 
 
 CFO System's leadership team includes accountants, former controllers, chief financial officers, audit directors and finance managers. Projects last from five months to five years as the company works with companies not quite large enough for full-time financial management staff or who are struggling with cash flow, bank or management issues.

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Edgar Hicks joins CFO Systems renewable fuels team

Posted June 15, 2009
 
 <a href="http://www.eosenvironmental.com/product/microcglyerin.htm">Environmental Operating Solutions Inc. has introduced MicroCgylcerin</a> as a non-hazardous, environmentally-sustainable alternative to methanol for denitrification applications at municipal and industrial wastewater treatment facilities. The trademarked MicroCglycerin is derived from crude glycerin, a natural co-product of the nation's growing biodiesel industry.

 
 As monitoring of the nation's surface water quality intensifies, wastewater treatment facilities in the United States are increasingly required to upgrade their plants for enhanced nitrogen removal, EOS explained in its product release announcement. In many cases, this requires facilities to add an external carbon source as an electron donor. Historically, methanol has been used as an option, however, methanol fluctuates widely in cost, is flammable, has toxic properties, requires costly storage and feed systems, and is derived from non-renewable natural gas. Moreover, 90 percent of the methanol used in the United States is imported.
 
 "Our customers are very excited about the non-hazardous, environmentally-sustainable and domestically-produced features that our MicroCglycerin product offers versus methanol," said Eric Stoermer, EOS president and CEO. "EOS worked closely with leading U.S. biodiesel producers to ensure that its MicroCglycerin would meet the rigorous requirements of municipal and industrial wastewater treatment facilities. Of primary importance in development of this product was the quality, consistency and reliability of the crude glycerin input materials." EOS has qualified nine biodiesel plants in the United States to supply crude glycerin for its MicroCglycerin product. These facilities represent capacity to produce the raw materials required for up to 32 million gallons of MicroCglycerin annually.
 
 Although recent industry research and pilot efforts confirmed that crude glycerin is a viable and environmentally-sustainable carbon source for denitrification, operational issues had to be addressed to ensure widespread adoption. MicroCglycerin overcomes these challenges with a product that has consistent carbon content, negligible methanol and fatty acids, no insoluble solids, and is compatible with existing pump, storage and feed systems, the company said.
 
 "Early adopters of our MicroCglycerin product have completed successful pilots and achieved significant denitrification results," said Peter Hunt, vice president of sales and marketing at EOS. "If initial results are any indication, we anticipate MicroCglycerin will significantly complement our existing MicroC line of premium carbon sources. The product is currently available throughout North America."

EOS introduces MicroCglycerin for denitrification

Posted June 15, 2009
 
 Those worried about a performance drop-off going from standard diesel fuel to the more environmentally friendly B20 biodiesel blend can ease their minds.
 
 A new Purdue University study shows that there is almost no statistical performance difference in semitrailer trucks using B20, a 20-percent blend of biodiesel, and No. 2 ultra-low sulfur diesel, the current standard.
 
 "In terms of performance, reliability and maintenance costs, it was basically a wash," said John Lumkes, the assistant professor of agricultural and biological engineering who led the study. "The only differences are environmental and economic."
 

 The study, which compared two 10-vehicle truck fleets using the ultra-low sulfur fuel and B20, was released in the journal Applied Engineering in Agriculture. Trucks used for comparisons in the yearlong study had the same engines, similar miles already on them at the start and drove nearly the same number of miles over the year.
 
 The only statistical difference related to the B20 was that it lowered the oil viscosity between maintenance intervals in engines slightly more than the ultra-low sulfur diesel. But even so, Lumkes said the oil still had sufficient viscosity so as not to damage engine parts.
 
 "They were still within the range of what is acceptable before you need an oil change," he said.
 
 The study followed each fleet's idle time percentage, average speed, engine load percentage and engine speed. Each pair of trucks had close to the same statistics in each category.
 
 At the end of the study, each fleet of 10 trucks had driven more than 1.5 million miles. Differences in performance based on fuel economy, fuel test results, engine oil analysis, and service and maintenance costs were considered minute. B20 cost about 13 cents more per gallon during that time than the ultra-low sulfur diesel.
 
 Lumkes said his study could ease concern about the effect biodiesel has on engine durability. He said some engine manufacturers are wary about extending warranties to those who use biodiesel because not enough has been known about how the biodiesel affects engine wear.
 
 "This shows that there is no observable difference in performance of engines using biodiesel versus the more common commercial fuel," Lumkes said.
 
 Lumkes added that the quality of the B20 also is an important factor. All the fuel sampled during the study exceeded the National Biodiesel Accreditation Commission standards.
 
 The Indiana Soybean Alliance provided funding for the research, and a private company that provided the trucks also provided funding.

 
 SOURCE: PURDUE UNIVERSITY

Biodiesel blend performs as well as ULSD

Posted June 16, 2009
 
 <a href="http://www.missionnewenergy.com/">Mission New Energy Ltd.</a> has begun commissioning its second biodiesel refinery, built next to its first 30 MMgy plant which began production in mid-2008 in Kuantan Port, Malaysia. Under the EPC contract with KNM Group Bhd., Mission's new plant is required to run continuously for a period of two days during which performance of the plant will be tested. 
 
 The 250,000 metric ton per year plant (approximately 75 MMgy) is using a second generation, heterogeneous catalyst developed by technology provider Axens, a subsidiary of IFP Group Technologies<a href="http://www.axens.net/ ">. On its Web site, Axens</a> says the transesterification process using its Esterfip-H catalyst "requires neither catalyst recovery nor aqueous treatment steps, which are drawbacks from the current homogeneous catalytic processes. Esterfip-H exhibits very high FAME yields and directly produces salt-free glycerol at purities exceeding 98 percent."
 
 In other company news, Mission announced Ir Lee Swee Eng has invested $12 million in Mission, subject to shareholder's approval. Eng is group managing director of KNM Group, a publicly traded, Malaysian process equipment manufacturer for the oil and gas, petrochemical and energy industries.
 
 To learn more about Mission New Energy's strategy to develop a jatropha-based biodiesel company, read <a href=" http://www.biodieselmagazine.com/article.jsp?article_id=3410">"Mission: Jatropha" in the May issue of Biodiesel Magazine.</a>

Mission completes second plant in Malaysia

Posted June 16, 2009

 
 On the same day that Texas-based<a href="http://www.greenhunterenergy.com/ "> GreenHunter Energy Inc.</a> announced the appointment of Ronald Ormand to the company's board of directors, its shares surged 62 percent to close at $1.86 on June 9, and rose to $2.15 in after-hours trading. Ormand had been previously employed with WestLB AG, a German bank that has served as GreenHunter's primary lender, the company stated. 
 
 In a stunning turnaround, GreenHunter received notice in early June from the New York Stock Exchange that its stock was not meeting listing requirements and there was speculation that the company might seek bankruptcy protection. Though reluctant to comment directly on stock moves of publicly traded companies, Biodiesel Magazine sources said intuition indicates that Ornand's connections to GreenHunter's primary lender gives stock buyers more faith in the future performance of the company and their ability to meet debt requirements.
 
 In addition, GreenHunter announced on Friday that its largest investor, West Coast Opportunity Fund LLC has opted to convert 5,000 shares of its preferred stock to ownership of the company into 1,000,000 shares of common stock at a price of $5 per share.
 
 "When you start a company and you've burned through all your money, you might get an investor to come in at a preferred position," said Jim Eiler of Eiler Capital Advisors in Des Moines, Iowa. "A party with a preferred position will get their money paid out before other equity holders, and therefore it's usually a good sign if they are willing to convert their preferred stock to common stock. It means that their faith in the future performance of the company is growing."
 
 Gary Evans, CEO of GreenHunter stated that West Coast has continually supported the biodiesel producer since they first started raising outside capital in 2007. "We are pleased with their recent decision to convert a large portion of their existing preferred stock ownership into common shares of the Company," he said. "This decision should benefit all common shareholders of GreenHunter Energy, Inc. by providing our Company greater financial flexibility in our ability to access capital markets in the future."

 
 According to NYSE Amex, GreenHunter opened today at $2.35 per share and is currently trading at $2.54 per share. Headquartered in Grapevine, Texas, GreenHunter acquired Channel Refining Corp. in 2007 with a 20-acre site along the Houston Ship Channel where GreenHunter converted the existing facilities into a 105 MMgy biodiesel refinery. The facility also has excess methanol distillation capacity, giving GreenHunter the ability to recover its own methanol, as well as processing off-spec methanol from third-party sources.

GreenHunter shares surge

Posted June 16, 2009
 
 Preliminary results from pennycress field trials in Illinois are showing promising yields and adding to the knowledge base for the weed being developed as a biodiesel feedstock. Peter Johnsen, chief technology officer for <a href="http://bmibiodiesel.com/bmi/">Biofuels Manufacturers of Illinois LLC,</a> said the trials conducted around Illinois indicate the new crop will likely yield 2,000 pounds per acre consistently. The trials were designed to compare planting dates, plant density, planting depth and other agronomic characteristics. "We learned a lot," Johnsen said. One of the most important is that planting in September and October in Illinois will allow early enough harvests for double cropping a soybean crop, while early November seeding delays germination until spring which delays the spring harvest as well. 
 
 BMI and research partners held a press event June 12 featuring the first harvest of pennycress at the site in Mapleton, Ill., where BMI plans to build a 60 MMgy biodiesel plant. Project development is now waiting on state loan guarantees, Johnsen said, to back the financing agreements with lenders. The site, zoning, permits, contractor and process provider are in place and ready to go once the final financing is in place. The company hopes to break ground later this year. 
 
 BMI will build a multi-feedstock facility initially using soy oil and animal fats to produce biodiesel as the acreage for its primary target feedstock increases. Johnsen added BMI has a signed a feedstock development agreement with the AgGuild of Illinois, a farmer group with 50 farmers representing 130,000 acres. 
 
 Pennycress is a common weed also known as stinkweed or frenchweed that is not considered a problem weed for corn and soybean crops because it flowers and sets seed early enough in the spring to not compete with crops. It was identified as a potential biodiesel feedstock due to its 36 percent oil content in the seeds, double that of soybeans.

Successful pennycress trials fuel biodiesel plans

Posted June 16, 2009

 
 The last few weeks have seen some heightened activity for biodiesel fuel terminal operations in the eastern half of the U.S., spurred mostly by mandates and government directives. Construction has started on Orlando, Fla.'s $2.5 million biodiesel blending station meant to serve its public bus agency and <a href="http://www.baystatebiofuels.com/">Bay State Biofuels LLC </a>is building a distribution facility in North Andover, Mass. 
 
 The North Andover terminal will be the first full-scale commercial facility dedicated to biodiesel distribution in Massachusetts. This terminal has 350,000 gallons of storage capacity in two above ground tanks and will distribute B99.9 biodiesel for oil companies to blend with petroleum diesel in automobile and home heating applications as required by the state's Clean Energy Biofuels Act of 2008. "Massachusetts is required to go to a 2 percent biodiesel blend for home heating oil by 2010 and it will increase 1 percent per year until it caps out at 5 percent," said Jesse Reich, CEO of Bay State. 
 
 The firm will be able to compete yearlong with retail prices of diesel and winter wholesale prices of heating oil. "We should keep prices of blends between B2 and B20 within one cent of petrol diesel prices," Reich said, adding that a major aspect of Baystate's business will be trading Renewable Identification Numbers. 
 
 "If we work directly with oil companies who need to purchase RINS instead of working with brokers, we will get about 5 cents more gallon of biodiesel," Reich said. "So handling this part of the business ourselves is crucial to our success." 
 
 The Orlando blend station will be the first in the nation built and operated by a transit agency. The Lynx transit blend station will allow the agency to convert its entire fleet to carbon neutral biodiesel fuel. The station is being paid for through a grant from the governor's energy office known as the Renewable Energy Technologies Grant Program.
 
 Lynx expects that 1.2 million gallons of petrol will be replaced by biodiesel fuel, lowering the transit system's carbon dioxide emissions in the metropolis by 16 percent. 
 
 Currently, Lynx is taking bids from biodiesel distributors for supplying the transit system with its required supplies, said spokesman Matt Freidman. "This is a program that we expect will be very effective and one that we expect to see long term benefits from," he said. "Right now we're in the process of permitting, acquiring supplies and getting everything signed off on so it takes a bit of time."

Eastern US sees recent push in terminal activity

Posted June 17, 2009

 
 Transonic Combustion Inc., Camarillo, Calif., has received a lot of attention this past month after it completed its third round of capital fund raising with the help of high profile clean-tech investor, Khosla Ventures. "We feel pretty excited to have completed our third round of funding in the current economic environment," said Eric Sharp of Transonic. "We're doing some pretty remarkable things here."
 
 The company has developed a fuel injection system that "is optimized on modern clean diesel engine architecture" and can boost operating efficiencies to levels near 100 miles per gallon. "Thus, economical, highly functional mixtures of renewable plant products can be utilized which are not practical in either spark ignition or conventional compression ignition engines," the company stated. 
 
 "We have done some work with biodiesel," Sharp said. "Primarily this has been through lab testing to see how biodiesel will interact with our technology."
 
 Transonic Combustion is a clean-tech startup company currently in transition from research and development to commercialization. In addition to Khosla Ventures, Transonic has received seed money from venture capital firms Venrock and Rustic Canyon. "We're also working with several OEMs to incorporate our technologies into their engines," Sharp said.

Biodiesel in plans for future tests at Transonic 

Posted June 18, 2009
 
 Continental Airlines announced the results of its Jan. 7 biofuel demonstration flight, which was conducted in partnership with Boeing, GE Aviation/CFM International, and Honeywell's UOP. The biofuel blend performed as well as or better than traditional jet fuel, displaying an approximately 1.1 percent increase in fuel efficiency over traditional jet fuel in different stages of the demonstration flight.
 
 Overall life cycle greenhouse gas emissions related to using a biofuel of the nature used on the Continental demonstration flight are estimated to be reduced by 60 percent to 80 percent as compared to traditional jet fuel.
 
 "We are pleased with the successful results of Continental's biofuel demonstration flight," said Leah Raney, Continental's managing director of global environmental affairs. "We look forward to working with our partners as biofuels go through the certification process, and we hope to see these fuels produced in commercial quantities in the near future."
 

 The Continental flight was the first biofuel demonstration flight by a commercial carrier in North America, the first sustainable biofuel demonstration flight by a commercial carrier using a two-engine aircraft, and the first biofuel demonstration flight by a commercial carrier using fuel partially derived from algae.
 
 During the approximately 90-minute flight, Continental test pilots successfully engaged the aircraft, a Boeing 737-800 equipped with CFM International CFM56-7B engines, in a number of flight maneuvers, such as mid-flight engine shutdown and re-start, and power accelerations and decelerations.
 
 The aircraft's No. 2 engine operated with a biofuel blend consisting of 50 percent biologically-derived fuel and 50 percent traditional jet fuel. The aircraft's No. 1 engine operated on 100 percent traditional jet fuel, allowing Continental to compare performance between the biofuel blend and traditional fuel.
 
 The flight took place in January 2009 in Houston, and the biofuel blend included components derived from algae and jatropha plants, both sustainable, second-generation sources that do not impact food crops or water resources or contribute to deforestation. The algae oil was provided by Sapphire Energy, and the jatropha oil by Terasol Energy.
 
 Because the fuel was a "drop-in" fuel, no modifications were necessary to the aircraft or engine. After inspections, the aircraft returned to regular revenue service the next day.
 
 Continental's biofuel demonstration is one of numerous environmental initiatives that the company has undertaken in the past several years. The airline also recently enhanced its recycling program, has undertaken comprehensive efforts to reduce the environmental impact of its ground fleet by testing alternative energy sources, and offers customers a carbon offset program, offered through nonprofit Sustainable Travel International.
 
 SOURCE: Continental Airlines

Continental releases results of biofuel demonstration

Posted June 22, 2009
 
 As biodiesel industry leaders meet this week in one of the oldest advocacy centers of the U.S., they are also venturing into one of the newest mediums. The National Biodiesel Board announced today at its annual June board meeting in Washington, D.C. that it has created a new home base on Facebook for biodiesel fans. From the biodiesel-curious to the biodiesel advocate, the new National Biodiesel Board Group will serve as another outlet for biodiesel information and discussion. 
 
 With more than 100 million users logging on at least once each day, Facebook is the fourth-most trafficked Web site in the United States. Increasingly more people are turning to the Internet for information than any other media source – including television and newspapers.

 
 "We're using Facebook to communicate the promise of biodiesel to a wider audience and using facts to correct any misconceptions," said NBB Director of Communications Jenna Higgins. "Our Facebook group is a valuable tool in our effort to help consumers understand what biodiesel is: a sustainable, cleaner alternative fuel that promotes food security and strong global environmental benefits."
 
 The Facebook group compliments NBB's YouTube channel, <a href="http://www.youtube.com/nationalbiodiesel">www.youtube.com/nationalbiodiesel</a>, launched earlier this year. The channel hosts news clips, celebrities talking about biodiesel, educational videos, user videos and more. Biodiesel fans can subscribe to the channel. To join the Facebook group, enter "National Biodiesel Board" into Facebook's search toolbar.
 
 "Social media equate to a digital water cooler, and accurate biodiesel information from us should be a part of that discourse," Higgins said. 
 
 Biodiesel is the clean burning alternative to diesel fuel that can be domestically produced from renewable resources, such as soybean oil (a byproduct of protein meal, for which the beans are primarily grown). It can also be made from other plant oils, fats, recycled grease, and a variety of promising new materials like algae. 
 
 Based in Jefferson City, Mo., NBB, is the national trade association of the biodiesel industry. 
 
 SOURCE: NBB
 
 Contact: Jenna Higgins/NBB
 800-841-5849

National Biodiesel Board launches Facebook group

Posted June 23, 2009
 
 New Generation Biofuels Holdings Inc. has signed a letter of intent with Instituto Costarricense de Electricidad (ICE), an autonomous institution of the government of Costa Rica. ICE will evaluate the potential for licensing New Generation's technology and building a facility in Costa Rica to manufacture fuel for electrical generation. 
 
 "We look forward to working with ICE to explore this opportunity to provide Costa Rica with an environmentally sound fuel, based on locally produced feedstock, which should mitigate the need to use Costa Rica's foreign exchange earnings to purchase imported fuel oil," said New Generation Biofuels CEO Cary Claiborne. "In addition to the expected revenue contribution for New Generation Biofuels, the successful implementation of the ICE project using our technology will provide us with an additional platform to market our biofuel technology in the U.S. and abroad."
 
 NGBF will supply ICE with biofuel produced in its production facility located in Baltimore, Md., for the testing program. An additional evaluation will be conducted to assess the availability within Costa Rica of palm oil, jatropha, or animal fats suitable for use as feedstock to produce biofuel. New Generation's proprietary emulsification technology uses oil feedstocks to produce a biofuel. The company has been targeting power generation, commercial and industrial heating and marine use for its initial markets.

Costa Rica to test New Generation biofuel

Posted June 23, 2009
 
 The <a href="http://greenfuels.co.uk/">United Kingdom's Green Fuels Ltd.</a> has acquired the assets of Renewal Fuels Inc. and Renewal Biodiesel Inc., Milwaukee, Wis., to create Green Fuels America Inc. with headquarters in Sparks, Nev., where Renewal Fuels had manufactured its FuelMeister personal biodiesel processor. The plant will continue to manufacture the FuelMeister as well as Green Fuel's slightly larger Fuelpod systems.

 
 In mid-June, Green Fuels America rolled out Fuelpod2 in the U.S. market, a micro processor measuring 24 inches wide by 60 inches tall. The new Fuelpod uses automation and air operated controls to improve the safety for home processors. "With the latest advances, making fuel has entered the realm of dishwashing and clothes washing," the company said. The system, which retails for just under $5,000 includes chemical testing equipment, scales and safety equipment, waterless purifier, oil pre-heater, fueling station, as well as a detailed manual and DVD that leads customers through the process. 
 
 Green Fuels America is a wholly owned subsidiary of the Stonehouse, England-based Green Fuels. In addition to continuing to manufacture small scale biodiesel processors for distribution throughout the existing U.S. distributer network, the UK firm will increase the range of equipment available. In the UK, the company supplies a 5,000 gallon-per-day continuous processor called the FuelMatic and a batch processor it calls the FuelMaker with production capacities from 240 to 1850 gallons of biodiesel per day. 
 
 James Hygate, co-founder of Green Fuels, said the company is looking forward to its expansion into the U.S. market. "We believe that the U.S. has a terrific future for biodiesel production from yellow grease and tallow. We think our business model in the UK should be even more profitable for our clients in this domestic environment. We have great plans for Green Fuels America." 
 
 Green Fuels has a global presence with projects and joint ventures in Eastern Europe, Africa, India, Japan and China. The company works with major diesel engine manufacturers and oil companies including Land Rover, Jaguar, Honda, Fuchs and Petrochem Carless to improve biodiesel performance. "In Europe, most automobiles have diesel engines and most diesel engine companies warrant their engines for 30 percent to 100 percent biodiesel use," Hygate said. "We feel the U.S. market, after some false starts, is on its way to being a major market for biodiesel fuel."

UK Green Fuels acquires US micro processor firm

Posted June 24, 2009
 
 Greenhunter Energy Inc. of Grapevine, Tex., is pursuing restructuring options including the sale of its 105 MMgy biodiesel refinery on the Houston ship channel, Green Hunter Biofuels LLC. GreenHunter's stock saw sharp gains when the company announced that Ronald Ormand of West LB AG, the German bank that serves as GreenHunter's senior lender, had joined the board of directors. 
 
 This maneuver fueled speculation that the company would be able to amend its credit agreement and meet future debt requirements, making investors more comfortable with the future performance of the company. Yesterday, Greenhunter indeed announced that "the execution of a definitive Amendment to its existing credit agreement with West LB AG in the original principal amount of $38.5 million and $10 million, the company's term loan and working capital line of credit with the lender, respectively."
 
 Jack Zedlitz, spokesman for Greenhunter, said however that the sale of the biodiesel plant was only one of the options that the company was considering in restructuring its finances. "In addition to an outside sale, we are considering refinancing with a federal loan guarantee or bringing in a strategic partner to build our working capital," he told Biodiesel Magazine.

 
 The U.S. DOE's loan guarantee program is expected to publish guidelines on how to apply in July. "Right now we're waiting on the government," Zedlitz said. 
 
 "By amending our existing Credit Agreement with WestLB, we have positioned the Company in a manner that should allow us time to seek a number of solutions to our present financial situation," said Gary Evans, CEO of Greenhunter in a prepared statement. "This is especially important now that credit markets have begun to improve and crude oil prices, which have a direct correlation to the price of biodiesel, have recently increased. We are also hopeful that the Federal Government will begin funding the many incentives that have been promised under the new Administration for our industry."

Greenhunter pursues restructuring options

Posted June 24, 2009
 
 Sen. Mike Johanns (R-Neb.) sent a letter to EPA administrator Lisa Jackson last Thursday criticizing EPA's indirect land use modeling, which has an impact on the implementation of RFS2. 
 
 "According to this theory, an increase in production of biofuels in the United States results in decreased grain exports to other countries, which in turn leads those countries to cut down their forests to plant more crops," Johanns stated in an official release. "However, deforestation in the Amazon Rainforest has actually decreased since U.S. [biofuels] production began to increase significantly in 2005."
 
 Also, Johanns requested that the public comment period regarding implementation of RFS2 be extended by 120 days. "I hope that the outcry from industry helps the cause to modify the implementation of RFS2," said Debbie Borg, president of the Nebraska Soybean Association. "Sen. Johanns joining in is very welcomed because he is a former Secretary of Agriculture with a lot of experience and credibility in this area."
 
 "The bottom line is this-the theory connecting [biofuels] production to changes in land use thousands of miles away is fundamentally flawed," Johanns said. "Even worse, the methods EPA wants to use are unscientific, unsubstantiated and not based on facts. If EPA incorporates indirect land use in this manner when implementing the RFS, it will be very costly for farmers…and could actually increase our dependence on foreign energy."
 
 From 2001 to 2004-the time period EPA used to conduct their analysis-there was very little biofuels production, Borg said. "That's one of the biggest problems that we see," she told Biodiesel Magazine. "Why use a period with very little renewable fuels production as a basis to make predictions about future land use change?"

 
 Borg, a "no till" farmer, said that EPA is also not considering the improvements in techniques and technologies that agriculture has made in recent years in the modeling process involving projections about indirect land use. No till farmers do not remove harvest residues like corn stalks or bean stubble, which benefits the soil and helps with carbon sequestration. 
 
 "That's important because EPA wants cellulosic ethanol, but cellulosic ethanol is going to be made from corn stalks among other things," Borg said. "Recent research from Agriculture and Agrifood Canada claims that removing this material has negative soil impacts. So according to EPA, everything we're doing is wrong."

Johanns joins protest against EPA land use theory

Posted June 24, 2009
 
 Indirect land use impacts may not be immediately incorporated into the Renewable Fuels Standard if the verbal deal struck by U.S. House of Representatives leaders reported today holds together in the Climate Change bill, expected to be voted on Friday. Rep. Collin Peterson, chairman of the House agriculture committee, Henry Waxman, chairman of the House energy and commerce committee and Speaker of the House Nancy Pelosi have agreed there should be widespread scientific agreement linking biofuels use to land clearing in tropical countries before the U.S. EPA can impose a related greenhouse gas (GHG) penalty on U.S. biofuels. 
 
 A June 24 press release from the American Coalition for Ethanol said the agreement calls for an entity such as the National Academy of Sciences to conduct a study on whether there is a link between biofuels use in the U.S. and tropical deforestation. In the meantime, EPA would be prevented for at least five years from imposing such a GHG penalty on biofuels. At the end of five years, EPA, the DOE and USDA will all need to agree that such links occur and can be effectively predicted using computer models. Congress will have one year after such a determination to review the issue before EPA could move forward.
 
 National Biodiesel Board Washington spokesman Michael Frohlich said Wednesday that with the agreement just verbal at the point, the NBB is cautiously optimistic. "We should know very soon," he added. Chairman Waxman has set a goal of getting the Climate Change bill to the House floor for a vote by Friday. The American Clean Energy and Security Acts, also known as the Waxman-Markey bill, would establish a federal carbon cap-and-trade program and a Renewable Portfolio Standard. Peterson had announced earlier that he was reluctant to support the climate change legislation unless Congress addressed the inclusion of indirect land use impacts in the Renewable Fuels Standard. EPA's proposed rule to implement the RFS gave soy biodiesel a devastatingly low GHG reduction score due to the incorporation of international indirect land use change impacts. The indirect land use penalty to biofuels has sparked widespread protest from industry and the scientific community that the science behind the modeling is far too full of errors to be the basis of policy.
 
 "The NBB is very pleased with the hard work of Chairman Peterson for biodiesel," Frohlich said. "We hope the deal being reported will move through swiftly so we can have the RFS in place to provide a framework for our producers to get up to speed again."

House deal delays indirect land use in RFS rules

Posted June 29, 2009
 
 The U.S. House of Representatives passed climate change legislation with language that would improve the Renewable Fuels Standard implementation for biodiesel.
 
 The American Clean Energy and Security Act of 2009, also known as the Waxman-Markey bill, passed by a narrow margin of 219 to 212 in the House on Friday, June 26. Among the provisions of a deal struck among the House leadership, biodiesel gets grandfathered into the 1 billion carve-out for biomass-based diesel without a greenhouse gas (GHG) reduction target, similar to the grandfather provision for ethanol. Biodiesel production from all plants in production or under construction in December, 2007, when the 2007 Energy Bill was enacted, is grandfathered into the RFS at 1 billion gallons or the EPA-set volume, whichever is higher.
 
 The bill's language also delays the use of international indirect land use change impacts in determining a fuel's GHG emission profile for the RFS for several years while an independent scientific assessment is done. Six months after enactment, the bill says the USDA and EPA would jointly institute a three-year National Academy of Sciences study to determine whether or not it is scientifically valid to incorporate indirect international emissions. Upon completion, the Secretary of Agriculture and the EPA administrator would jointly determine whether to include indirect emissions in the GHG reduction targets for the RFS program, subject to public notice and comment. Congress would have one year to act on the joint USDA/EPA determination. The earliest an international indirect land use assessment for GHG emissions could be incorporated would be six years from enactment.
 
 The House compromise was negotiated by Rep. Collin Peterson, chairman of the House agriculture committee, Henry Waxman, chairman of the House energy and commerce committee and Speaker of the House Nancy Pelosi to garner the support needed to pass the Climate Change bill. The American Clean Energy and Security Act would establish a federal carbon cap-and-trade program and a Renewable Portfolio Standard setting a 15 percent target for renewable energy content in electrical production by 2020. 
 
 Peterson had announced earlier that he was reluctant to support the climate change legislation unless Congress addressed the inclusion of indirect land use impacts in the Renewable Fuels Standard. EPA's proposed rule to implement the RFS gave soy biodiesel a devastatingly low GHG reduction score due to the incorporation of international indirect land use change impacts. The indirect land use penalty to biofuels has sparked widespread protest from industry and the scientific community that the science behind the modeling is far too full of errors to be the basis of policy. 
 
 "The NBB is very pleased with the hard work of Chairman Peterson for biodiesel," Frohlich said. "We hope the deal being reported will move through swiftly so we can have the RFS in place to provide a framework for our producers to get up to speed again."
 
 While the House language is a positive development for the biodiesel industry, it is uncertain when the Senate will begin its work on energy and climate change since it is expected to complete work on health care reform first.

House bill grandfathers biodiesel into RFS, orders study of indirect land use

Posted July 15, 2009
 
 Just a place to park money-sometimes that's what the commodities futures market is. "Investors who have no interest in taking any physical ownership of crude oil pour a lot of money into the market as a hedge against the weakening dollar," said David Swenson, professor of economics at Iowa State University in Ames, Iowa. "So we've seen some strange behavior in oil prices."
 
 Complaints about "strange behavior" and market volatility have led the Commodities Futures and Trading Commission to hold hearings on oil speculation during July and August. The CFTC currently sets and ensures adherence to position limits with respect to certain agriculture products. This is not the case for energy markets. "For energy commodities, futures exchanges set position limits and accountability levels to protect against manipulation and congestion, but individual exchanges are not required to set and enforce position limits as a preventative measure against excessive speculation," the commission said in an official release. A position is the number of outstanding contracts a particular trader possesses. 
 
 Preventing excessive speculation in the oil futures markets impacts biofuels-both ethanol and biodiesel-because it allows them to perform more closely in their roles as petroleum replacement products, Swenson said. Large liquidation events, or "sell-offs" put downward pressure on the price of oil and restrict the cost competitiveness of biofuels.
 
 Soybean futures, following reports of an excellent crop, have seen a lot of pressure in recent weeks, and for the most part, crude is trading at less than half the price of last year. Therein lies the paradox for the biodiesel industry. Cheap oil makes biodiesel less cost competitive as a substitute transportation fuel, but cheap veg oils lower operating expenses. 

 
 There's not necessarily any logic behind the trend of commodities often rising and falling in tandem, however, other than the influence of a large number of speculators who all buy and sell a certain way, said a trader in a conversation with Biodiesel Magazine. 
 
 A speculator is usually defined as a player who has no interest in executing a contract or taking physical ownership of a commodity, like a fuel or soybean delivery. Powerful speculators like index funds usually "stand long," meaning they bet the price of a commodity will continue to rise at a certain percentage over time. In other words, they have an interest in the continued upward pressure on prices.
 
 The best market situation for biodesel occurs when oil futures prices are high and agricultural commodities are low, but that probably isn't going to happen in any type of business plan timeframe. "Soy oil is not going to be a feasible input for the biodiesel industry because it's been priced out by the speculator," said the trader. "We've seen some huge positions in soy oil."
 
 So feedstock procurement and fuel marketing specialists in the biodiesel Industry are both are affected by the influence of speculative position limits on the commodities futures markets. "It's no longer a hedging market," the trader, who provides risk management and feedstock procurement services for the biodiesel industry, said. "The influence of the speculator has become too great." 
 
 The Commodity Exchange Act states that the CFTC can impose limits on trading and positions as necessary to "eliminate, diminish or prevent the undue burdens on interstate commerce that may result from excessive speculation." The key word here is excessive. "I'm not saying that speculators aren't good for the market," the trader said. "Speculators can help provide liquidity to the market, but their influence, because they don't have to obey position limits, has become too great." 
 
 The Chicago Mercantile Exchange Group which owns the Chicago Board of Trade has repeatedly argued that speculators do not negatively impact supply and demand fundamentals of the market and federal regulations could actually have an adverse affect. In addition, others have said situation might be more about politics than it is about economics. "They have precious little evidence as to the way speculators truly affect prices," Swenson said. "They really don't know."

Hearings set for oil speculation restrictions

Posted June 25, 2009

 
 WASHINGTON, June 24, 2009 - Agriculture Secretary Tom Vilsack announced today that USDA Rural Development has approved a $25 million loan to enable a Minnesota biodiesel facility to diversify its operations and significantly expand the production of advanced biofuels.
 
 "The investment announced today helps fulfill the Obama Administration's goal of increasing production of biofuels while securing jobs in the alternative fuels industry," Vilsack said. "This is great news for a community that recently saw this company cease production of its operations due to tough economic conditions."
 
 USDA Rural Development is providing <a href="http://www.soymor.com/">SoyMor Biodiesel LLC </a>a $25 million guaranteed loan to purchase equipment that will enable SoyMor to convert multiple types of feed stocks, including an unrefined corn oil waste product from nearby ethanol facilities, into biodiesel. In its current configuration, the plant only has the ability to process soybean oil.
 
 The loan is the second USDA Rural Development has made under the Section 9003 Biorefinery Assistance Program of the 2008 Farm Bill.
 
 The funding will have a significant impact on the nearby communities by restoring nearly 30 jobs and providing an additional value-added opportunity for the ethanol industry and bolstering the local economy. High feedstock costs forced SoyMor to suspend operations at its Albert Lea, Minn., facility in spring 2008. The plant opened in 2005 and has an annual capacity of 30 million gallons.
 
 The Biorefinery Assistance Program promotes the development of new and emerging technologies for the production of fuels that are produced from non-corn kernal starch biomass sources. The program provides loan guarantees to develop, construct and retrofit viable commercial-scale biorefineries producing advanced biofuels. The maximum loan guarantee is $250 million per project. The loan is contingent upon SoyMor meeting the conditions of the loan agreement.
 
 USDA Rural Development's mission is to increase economic opportunity and improve the quality of life for rural residents. Rural Development fosters growth in homeownership, finances business development, and supports the creation of critical community and technology infrastructure. Further information on rural programs is available at a local USDA Rural Development office or by visiting<a href="http://www.rurdev.usda.gov"> USDA Rural Development's web site at http://www.rurdev.usda.gov</a>. 

 
 SOURCE: USDA

SoyMor receives $25 million USDA guaranteed loan

Posted June 25, 2009
 
 The world's 28th plant by BioDiesel International (BDI) was opened ceremoniously on June 21 in the Norwegian port of Fredrikstad by the Norwegian Minister of the Environment and International Development in the presence of the Austrian Ambassador to Norway. Its position in the sea port favors logistics and transport routes for raw materials and the 114 million liters (30 MMgy) of biodiesel. This will be bought mainly by the oil companies which will then be able to meet the increase in the blending quota announced by the Minister, which is to rise from the current 2.5 to 5 percent, using "Norwegian" biodiesel.
 
 The customer Uniol AS obtained the Austrian company's multi-feedstock biodiesel technology with an overall investment volume of EUR 35 million, financed by Raiffeisen Leasing Nordic AB, Stockholm. This process, with which BDI is a global market leader, is used to produce biodiesel very cost-effectively in the plant from various raw materials ranging from fresh vegetable oils to residuals such as used cooking oils and animal fats. 
 
 Wilhelm Hammer, CEO of BDI, is particularly pleased that a new directive of the European Parliament now gives biofuels that are produced from waste and residuals a weighting factor for a CO2 assessment which is two times higher than that of other biofuels. This affirms yet again the route the BDI has been following for a long time with its multi-feedstock technology.
 
 In his speech, Erik Solheim, Minister of the Environment and International Development, particularly emphasized the importance of international cooperation for climate protection and in connection with this also welcomed the unflagging efforts of Brazil's President Lula regarding the promotion of biofuels and the most recent initiatives of President Obama.
 
 Wilhelm Hammer said, "Commitment to the production of environmentally compatible fuels in Norway sends a clear message despite the country's rich oil reserves. First generation biodiesel is an affordable reality and no longer merely a scientific vision for reducing CO2 emissions and relieving the burden on the environment. International awareness in the CO2 debate, which began with the Kyoto Protocol, will now become visible again."
 
 About BDI – BioDiesel International AG
 

 BDI – BioDiesel International AG is one of the world's leading suppliers of complete BioDiesel production plants. The services the company provides include plant planning, construction and start-up and subsequent after-sales service. BDI – BioDiesel International AG has had in-depth experience with the production of BioDiesel and owns an extensive patent portfolio that has resulted from its in-house research and development activities. The company considers itself to be among the leading international technology suppliers on the market for the production of Multi-Feedstock plants that can manufacture BioDiesel on the basis of different raw materials, such as vegetable oils, waste edible oils and animal fats.
 
 BDI – BioDiesel International AG currently has more than 140 employees. The BDI – BioDiesel International AG shares are listed in the Prime Standard/Regulated Market at Frankfurt Stock Exchange.
 
 SOURCE: BDI 
 
 Contact for further information:
 Corporate Communications
 BDI - BioDiesel International AG
 Parkring 18
 A-8074 Grambach / Graz, Austria
 Tel: +43 / 316 / 4009-1528
 Fax: +43 / 316 / 4009-110
 www.bdi-biodiesel.com
 bdi@bdi-biodiesel.com

BDI biodiesel plant begins production in Norway

Posted June 25, 2009

 
 General Biodiesel Seattle LLC announces today that it has completed the acquisition of the former Seattle Biodiesel facility, a Seattle-based commercial biodiesel refinery, from Imperium Renewables Inc. General Biodiesel is converting the facility to produce biodiesel from waste oils such as recycled cooking oil and animal fat, which the company collects from restaurants and grocery stores around the region. 
 
 Yale Wong, CEO and founder of General Biodiesel, commented that "the mission of General Biodiesel is to produce high-quality biodiesel fuel from locally generated waste at a competitive price. The acquisition of this plant enables General Biodiesel to deliver a locally produced renewable fuel source that will measurably reduce total carbon emissions in the State of Washington, reduce our dependency on foreign oil, and build a stronger regional economy by creating green jobs in the community."
 
 John Plaza, who founded Seattle Biodiesel (now Imperium Renewables) and built the plant, said "It's great to see our site being put to continued good use as a biodiesel production facility. We are happy to have General Biodiesel as the new owners of our original facility. They are a great example of innovation and leadership in renewable and clean energy in our state." 
 
 Simultaneously with the plant acquisition, General Biodiesel closed on an equity financing arranged by Swiftsure Securities LLC, a Seattle-based merchant bank. "Swiftsure has looked at the biofuels sector for several years now and General Biodiesel represents one of strongest business models we've seen. General Biodiesel's vertically integrated model of collecting local waste, producing biodiesel locally and selling to local fleets is the future of the biofuels industry. The fundamentals of the business are sound, and General Biodiesel is well-positioned to be a leader in the category," added Gordon Gardiner of Swiftsure, who will join General Biodiesel Seattle's Board of Directors. 
 
 For more information, please contact Yale Wong of General Biodiesel at 206-852-1000. 
 
 Swiftsure Securities contact: Gordon Gardiner, 206-903-1002 
 
 Imperium Renewables media contact: John Williams, 206-625-0075, jwilliams@scovillepr.com
 
 SOURCE: General Biodiesel Seattle LLC

General Biodiesel completes purchase of Seattle biodiesel refinery

Posted June 25, 2009
 
 <a href="http://www.vale.com/vale_us/cgi/cgilua.exe/sys/start.htm?tpl=home">Brazilian mining company Vale S.A.</a> is planning to supply its rail and mining operations with biodiesel. On June 24, the company announced founding a consortium with Biopalma da Amazonia S.A. to produce biodiesel beginning in 2014 from dende palm oil.
 
 In the announcement, Vale said the consortium will be the biggest producer of palm oil in the Americas, with an investment of $500 million in the project, $305 million provided by Vale. With a production goal of 500,000 tons of palm oil per year, Vale will use its portion to feed its planned biodiesel plant which will have an estimated capacity of 160,000 tons (48 million gallons) of biodiesel per year. 
 
 Vale said the project will cut Vale's carbon dioxide emissions, plus generate around 6,000 direct jobs and benefit 2,000 families of small rural producers. The project covers 130,000 hectares (320,000 acres) in north-central Brazil. Of the total area, 60,000 hectares will be used for dende palm tree plantations and the remaining will be allotted for native habitat to be restored and protected by the consortium. About 800,000 trees were planted in 2009 on 5,000 hectares, and another 2.3 million saplings are to be planted in 2010. By 2014, Vale expects to begin biodiesel production and become self-sufficient in production of the fuel for B20 blends well in advance of the Brazilian mandate for B20 by 2020.

Brazilian mining company to produce palm biodiesel

Posted June 25, 2009
 
 Researchers at two centers in St. Louis are gearing up to launch five-year research programs on algae, backed by U.S. DOE grants. The Donald Danforth Plant Science Center received $15 million and Washington University $20 million from the DOE's fund for Energy Frontier Research Centers. A total of 46 centers were funded from a pool of some 260 applications.
 
 Danforth's Center for Advanced Biofuels Systems will be led by Richard Sayre, who also serves as director of the Enterprise Rent-A-Car Institute for Renewable Fuels. Sayre said the new team of researchers will be studying the conversion of energy captured from photosynthesis in the single cell algae and how it is channeled into oil. With algae oil production ranging from 5 percent to 70 percent lipids, the researchers will be working to identify ways to increase oil production. "We'll take apart the system step by step and develop mechanisms to work around the bottlenecks," he explained. The researchers hope to identify catalysts and enzymes that could be engineered into the organism to improve oil yields.

 
 Robert Blankenship, professor of biology and chemistry, will direct the Washington University Photosynthetic Antenna Research Center which will use its DOE support to delve into the science of photosynthesis and how light energy is harvested using algae as the model. Blankenship will be coordinating the efforts of 16 other principal investigators from around the world. The Washington University project will focus on the biophysics of light while the Danforth Center project focuses on biochemical conversion of that light into oil. Both programs are hiring personnel and organizing to officially launch the programs in August.
 
 "There's a growing nexus of research here in the St. Louis area, based around the Danforth Center and Washington University in St. Louis that may help define how the algal biofuel industry develops," said Dave Claborn, vice president marketing and communications for The Missouri Partnership, an economic development group.

St. Louis researchers launch algae research

Posted June 25, 2009
 
 Rentech, Inc. (NYSE AMEX: RTK) announced today that the aviation fuels subcommittee of ASTM International, the standards development organization, yesterday passed specifications for synthetic jet fuel for commercial aviation use. The new jet fuel specification, once issued, will enable the use of fuels from the Fischer-Tropsch process, including Rentech's RenJet synthetic jet fuel.
 
 The subcommittee's passage sets the stage for final approval and certification of synthetic jet fuel specifications by the ASTM International's full governance committee, expected to occur this fall. Acceptance by the Federal Aviation Administration (FAA) will occur as part of the ASTM process. The specification calls for a 50/50 blend of synthetic Fischer-Tropsch fuels and petroleum-derived fuels.
 
 Once approved, fuels produced from the Fischer-Tropsch process, including RenJet produced from renewable and fossil feedstocks, will be the first and currently only non-petroleum derived jet fuel certified for use by commercial aircraft. Rentech's Product Demonstration Unit currently produces jet fuel that, when blended with petroleum-derived fuel, meets the ASTM International specifications passed by the subcommittee. 
 
 D. Hunt Ramsbottom, President and Chief Executive Officer of Rentech, stated, "Rentech is pleased by ASTM International's progress on certifying synthetic fuels. With the subcommittee's approval, RenJet is one step away from regulatory acceptance and use by commercial aviation." Mr. Ramsbottom continued, "Rentech was the only U.S.-based producer of Fischer-Tropsch fuels to participate in the CAAFI team that expedited subcommittee approval."
 
 Richard Altman, Executive Director of the Commercial Aviation Alternative Fuels Initiative (CAAFI), stated, "The achievement of this landmark passage of the first non-petroleum derived jet fuel by the ASTM could not have been achieved without Rentech's participation and leadership. Rentech supplied guidance, data and its jet fuel during the development of the specifications process for synthetic jet fuel. We look forward to the full committee's approval of synthetic jet fuel this fall."
 

 According to the International Air Transport Association, global commercial aviation fuel consumption was 71 billion gallons in 2007. In recommending the specifications of synthetic fuel for approval by ASTM International, the subcommittee completed an exhaustive review of the fuels during a two-year process, drawing from independent testing data and results from U.S. Air Force laboratory and flight tests. The U.S. Air Force has already certified synthetic fuels from the Fischer-Tropsch process, including RenJet, for use in most of its aircraft.
 
 CAAFI's statement on the fuel specification passage is accessible at www.caafi.org.
 
 
 
 About Rentech, Inc.
 
 Rentech, Inc. (www.rentechinc.com), incorporated in 1981, provides clean energy solutions. The Rentech Process is a patented and proprietary technology that converts synthesis gas from biomass and fossil resources into hydrocarbons that can be processed and upgraded into ultra-clean synthetic fuels, specialty waxes and chemicals. Rentech Energy Midwest Corporation, the Company's wholly-owned subsidiary, manufactures and sells fertilizer products including ammonia, urea ammonia nitrate, urea granule and urea solution to the corn-belt region.
 
 Safe Harbor 
 
 This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 about matters such as the certification and qualification of RenJet® for use in commercial aircraft. These statements are based on management's current expectations and actual results may differ materially as a result of various risks and uncertainties. Other factors that could cause actual results to differ from those reflected in the forward-looking statements include changes by the ASTM International's full governance committee and those of synthetic jet specifications set forth in the Company's press releases and periodic public filings with the Securities and Exchange Commission, which are available via Rentech's web site at www.rentechinc.com. The forward-looking statements in this press release are made as of the date of this release, and Rentech does not undertake to revise or update these forward-looking statements, except to the extent that it is required to do so under applicable law.
 
 SOURCE: RENTECH INC.

Rentech hits milestone in synthetic jet fuel certification

Posted June 29, 2009

 
 SRS Engineering Corporation announced the company just finalized a contract with ReNvision Biofuels Inc. to build its 10 MMgy biodiesel plant in, Alberta, Canada. SRS Engineering Corp. will provide the complete design and engineering services and the equipment required to build this biodiesel plant. ReNvision has the advantage of utilizing several different feedstocks as Alberta has several different feedstocks to offer, including animal fats, canola and camelina. 
 
 "We are thrilled to be working with ReNvision on their plant" says Clayton Hawranik, CEO of SRS Engineering Corporation "the company has an incredible and feasible business plan and a great group of people to execute it." 
 
 The federal government of Canada recently mandated that the renewable fuel content for diesel and heating oil should be at least 2 percent by the year 2012 creating demand for 500 million liters per year (about 132 million gallons). To promote mandates and to help with costs associated with technologies and market integration, the Alberta provincial government has set aside $239 million in funding. This funding has helped companies like ReNvision get started. 
 
 "We are very exited to be working with SRS. We feel the support offered by forward thinking institutions such as SRS and the Government of Alberta is exactly what this industry needs!" says the ReNvision Biofuels team.
 
 SRS Engineering offered an in-kind contribution on its plant in return for a small stake in ReNvision. This established an infrequent opportunity for both parties for which both parties are incredibly excited about. 
 
 About SRS Engineering Corp. 
 Headquartered in Murrieta, California, SRS Engineering Corporation has been manufacturing custom process equipment for various industries for more than 20 years. The company offers a wide range of biodiesel equipment, including high-FFA pretreatment systems, high-purity methanol recovery systems, continuous-flow reactors, and complete turnkey biodiesel plant solutions. SRS is uniquely positioned to deliver everything from small biodiesel plants to large-scale biodiesel refineries. 
 For more information, visit www.srsbiodiesel.com or call (800) 497-5841. 
 
 SOURCE: SRS Engineering Corp.

SRS Engineering to build Alberta plant

Posted June 30, 2009

 
 Planted soybean acreage for 2009 is at a record high and stocks in storage down some as reported by USDA it its acreage and grain stocks reports released June 30.
 
 USDA estimated soybean planted area for 2009 at a record high 77.5 million acres, up 2 percent from last year. The estimated area for harvest, at 76.5 million acres, was up 3 percent from 2008, and will be the largest harvested area on record, if realized. Compared with last year, planted acreage increased by 200,000 acres or more in Kansas, Mississippi, Missouri, North Dakota, and South Dakota. The largest decrease was in Nebraska, down 400,000 acres from 2008, as many farmers switched to corn this year. Record high planted acreage was estimated for in Kansas, New York, North Dakota, and Pennsylvania. 
 
 Corn planted area in 2009 is estimated at 87.0 million acres, up 1 percent from last year but 7 percent below 2007. This is the second largest planted acreage since 1946, behind 2007. While early planting was slowed by wet weather, farmers reported that 97 percent of the intended corn acreage had been planted at the time of the survey interview compared with the 10-year average of 98 percent.
 
 Soybeans stored in all positions on June 1, 2009, totaled 597 million bushels, down 12 percent from June 1, 2008. On-farm stocks totaled 226 million bushels, down slightly from a year ago. Off-farm stocks, at 371 million bushels, are down 18 percent from the previous year. Indicated disappearance for the March - May 2009 quarter totaled 705 million bushels, down 7 percent from the same period a year earlier.
 
 Corn stocks in all positions on June 1, 2009, totaled 4.27 billion bushels, up 6 percent from June 1, 2008. Of the total stocks, 2.21 billion bushels are stored on farms, up 12 percent from a year earlier. Off-farm stocks, at 2.06 billion bushels, are up slightly from a year ago. The March - May 2009 indicated disappearance is 2.69 billion bushels, compared with 2.83 billion bushels during the same period last year. 
 
 Wheat rebounded from the previous years' record low stocks worldwide-creating a shortage that helped spur last year's market gyrations along with other factors. USDA reported all wheat stored in all positions on June 1, 2009, totaled 667 million bushels, up 118 percent from a year ago.

USDA: Soybean acres at record high, stocks down 12 percent

Posted on July 1, 2009
 
 Shipping biodiesel through a pipeline might not have a direct sales impact for North Alabama Biodiesel in Florence, Ala., but there will be indirect benefits, according to NAB vice president Jeremy Rogers. "The benefit we'll see is in consumer confidence," he said. "There will be more of a temptation for the bigger distributors to use biodiesel now, and that will just increase the availability." 
 

 Kinder Morgan Energy Partners LP announced June 30 that Plantation Pipeline Company is the first in the United States to transport biodiesel for commercial purposes-B5 on a mainline segment of the pipeline. "The company injected B99 into ultra low sulfur diesel at Plantation's Collins, Miss., pump station and breakout tank farm creating a 15,000 barrel batch of B5 that it then shipped to marketing terminals in Athens, Ga., and Roanoke, Va.," KMP stated. "Upon receipt of the product at both facilities, Kinder Morgan performed testing on samples from the batch and found that the samples arrived on specification."
 
 Rogers said this development is good for an industry that has had supply and distribution problems in the past. "Being able to ship biodiesel through a pipeline is going to help ensure that there are significant volumes available in the marketplace," he told Biodiesel Magazine.
 
 There have been concerns that biodiesel shipments on segments of the Plantation Pipeline-and pipeline transport in general for that matter-could lead to "trailback in jet fuel and other types of fuel that follow biodiesel through the system. "If we can work through these issues, we will evaluate the possibility of moving blended biodiesel to every market on the Plantation system," said Tom Bannigan, KMP products Pipeline president.

Kinder Morgan completes first commercial shipment of biodiesel

Posted July 1, 2009
 
 Collecting used cooking oils from restaurants for biodiesel production is a diligent and multifaceted task. For instance, there are 5,000 restaurants in the city of Austin, says Jason Burroughs of DieselGreen Fuels. Identifying potential customers, establishing collection routes and conducting titration tests on samples are all aspects of managing a waste grease-to-biodiesel business. 
 
 "The Biodiesel Control Center is web-based software that helps new or future producers manage their business," Burroughs said. "When we needed software to help with our management needs, we found that there really wasn't anything specifically for the biodiesel industry. And what was available was dated, and cost as much as $14,000."
 
 Users of the Biodiesel Control Center do not need to install any programs on their computers; they simply log in to a secure website and access several databases and management programs. The starting price will be $50 per month for up to 25 restaurants, and it scales up from there. Web hosting, weekly leads, and data backups are included in the price. Setup fees vary but can include importing private data into the system and helping set up collection routes.
 
 "If we have been taking oils to a producer who complains about the free-fatty-acid content of the feedstock for instance, we can trace where that particular batch of feedstock comes from," Burroughs said. "If we discover it's a Dairy Queen giving us grease that really isn't suited for biodiesel production, we can eliminate them from our route…so this software helps us separate our good customers from the bad ones."

 
 The Biodiesel Control Center website was launched in late June and is offering free trials through Aug. 1, when the commercial subscription service will then be available.
 
 "Right now the service is targeted for community scale producers," Burroughs said. "Our long term plan, however, is to continue developing this software as a management tool for even the biggest biodiesel producers." 
 
 For more information, see <a href="http://www.BiodieselSoftware.com">www.BiodieselSoftware.com</a>. For a product demo, contact Jason Burroughs at jason@dieselgreenfuels.com or 512-247-3835.

DieselGreen Fuels launches Biodiesel Control Center

Posted July 1, 2009
 	
 Feather biodiesel is the latest work of the researchers at the University of Nevada-Reno-the same team whose work with coffee biodiesel gave them a moment of fame-who recently published a paper on extract useable oils from another waste material-feather meal.
 
 Currently, feather meal left after poultry processing is used as an animal feed, given its high protein content, and also as a fertilizer because of its high nitrogen content. The fat content varies from 2 percent to 12 percent depending on the type of feathers, with chicken feathers containing approximately 11 percent oil content while turkey and duck features contain about 7 percent oil. Removing the fat from the meal would provide a new coproduct and boost the value of the feed and fertilizer coproducts. 
 
 The fatty acid profile of the feather meal is similar to the profile of chicken fat, with oleic acid and palmitic acids in the majority. The researchers extracted the fat from the feather meal in boiling water. UNR researcher Narasimharao Kondamudi said the laboratory process used would be applicable in the processing plant's rendering unit, removing it from the watery waste stream before it is baked and dried down into meal. Using standard transesterification methods the feather meal oil was processed into biodiesel meeting ASTM specifications showing a good cetane number and high oxidation stability, although with a cloud point of 23 degrees Celsius.
 

 "Foster Farms supplied the materials for our research," Kondamudi said. "They are interested in the fuel as well as higher protein feather meal." While the research is at early stages and no commercialization effort is underway yet, the team estimates that the feather meal produced by the poultry industry -based on a 10 percent oil yield- could produce about 153 million gallons of biodiesel annually, and potentially nearly 600 million gallons worldwide.
 
 The team's paper, <a href="http://pubs.acs.org/doi/abs/10.1021/jf900140e">"A Green Process for Producing Biodiesel from Feather Meal,"</a> was published in late June by the Journal of Agricultural and Food Chemistry. The four authors from the Chemical and Materials Engineering Department at UNR include Kondamudi, Jason Strull, Mano Misra and Susanta Mohapatra. 
 
 Following up on the coffee biodiesel project (for the article in Biodiesel Magazine visit <a href="http://biodieselmagazine.com/article.jsp?article_id=3238 ">http://biodieselmagazine.com/article.jsp?article_id=3238 </a>) Kondamudi reports that the university has licensed the technology to two companies in Europe. "I hope coffee biodiesel will be in the market very soon," he said.

Nevada studies feather meal for waste-based biodiesel

Posted July 2, 2009
 
 While the U.S. EPA officially extended the comment period on its proposed rule for the revised Renewable Fuels Standard, the National Biodiesel Board fears the hardship that may fall on the biodiesel industry if the implementation of the new standard is delayed.

 
 The EPA announced July 2 that it extending the comment period by 60 days on the proposed rule. The original comment period was to eng July 27, and will now end Sept. 26. The agency said it seeks to provide the public adequate time to provide meaningful comment while still finalizing and implementing the standards in a timely manner.
 
 "Everyone agrees with the need for a thorough public review of the EPA's proposed RFS-2 rule and a comment period of sufficient duration to accommodate public input, There are clearly ways to improve the proposed rule," the National Biodiesel Board said in a statement. "With that said, it important to note that RFS-2 was supposed to be in place at the beginning of this year, and extension of the comment period could further delay the implementation of the program. This will provide additional hardship to the U.S. biodiesel industry. 
 
 "RFS-2 by law requires the use of 500 million gallons of biomass-based diesel in 2009. Biodiesel is the only fuel available in the marketplace in commercial volumes able to meet this requirement. Given the extension of the RFS-2 comment period, it is only appropriate that EPA take immediate steps to ensure that the 2009 volume goals provided for in statute are met. Accordingly, the EPA should use its existing regulatory authority to ensure that biomass-based diesel volume requirements are met and issue a notice requiring obligated parties to use biodiesel in 2009 to meet its 2009 volume requirements. 
 
 "In addition, NBB will continue working with policymakers and the EPA through the rulemaking process to promote the use of sound science and to ensure that the U.S. biodiesel industry can play a constructive role in meeting the nation's energy security and climate change needs." 
 
 The comment period extension came the day after the NBB launched a <a href="http://www.biodiesel.org/news/RFS/">RFS-2 Action Center on the NBB Web site</a> to make it easier for the industry to submit comments. Several documents explaining the problematic areas in the proposed rule for biodiesel are posted along with links to the areas where comments can be submitted to the EPA. The action center also offers short and long versions of sample comments. "We need as many biodiesel supporters as possible to submit consistent comments to the EPA," said Michael Frohlich, NBB's Washington, D.C., director of communications. The sample comments can be used as provided, but he encouraged biodiesel producers to personalized the comment by telling their own story. "How many people have they had to lay off? Have they had to shut down? The impact on jobs in this nation is an important thing for the EPA to know," he said. 
 
 To access the EPA Web site directly for more information and instructions on submitting comments visit:<a href=" http://www.epa.gov/otaq/renewablefuels/index.htm"> http://www.epa.gov/otaq/renewablefuels/index.htm

 </a>

EPA extends RFS-2 comment period, NBB expresses concern, encourages comment

Posted July 2, 2009
 
 <a href="http://www.mansfieldoil.com/ ">Mansfield Oil Co. </a> is expanding its biofuel marketing capabilities with the purchase of C&N Companies. "Our acquisition of C&N is a win for producers who need a thriving independent marketing partner with the financial strength to compete in today's tough economy," J. Alexander, president of Mansfield Oil, said. The Georgia-based company saw a 415 percent increase in renewable fuels sales last year in the company's 2 billion-gallon sales volume last year. 
 
 The Bloomington, Minn.-based C&N will continue to operate under its name and with its current staff, using the added resources of Mansfield to expand its business. C&N currently represents 500 million gallons of ethanol production and 150 million gallons of biodiesel production capacity. "I welcome this development with open arms and see it as delivering on my promise to create the best marketing possible for producers," said C&N founder Jon Bjornstad. "Mansfield's deep roots with major refiners will give our customers an advantage that they simply can't get anywhere else."

 
 In 2008, Mansfield Oil sold biodiesel in 33 states, according to Dough Haugh, executive vice president of Mansfield. "One-third of our business comes from all levels of government," he explained, saying that out of the 700 government bids last year, a number have a biodiesel option or requirement, although the current pricing situation makes it difficult for biodiesel to compete. "In biodiesel so much of the production right now is shut in. We need to find the right markets so our producers can compete and make a little money," he said.
 
 Ranked number 66 by Forbes, Mansfield Oil is a downstream oil company doing business with nearly all of the refiners in the United States. It operates 650 bulk terminals and 900 supply points in 49 states.

Mansfield Oil acquires C&N Companies

Posted July 2, 2009
 
 FORT COLLINS, CO, Jun 30, 2009 Solix Biofuels Inc., an alternative energy technology company for the large-scale commercialization of microalgae-based fuels and co-products, announced the completion of its Series A funding that now includes the international investment group, Shanghai Alliance Investment Ltd. ("SAIL"). Solix will use the additional funding to complete construction and begin operations at its Coyote Gulch Demonstration Facility, which is expected to be in full-scale commercial operation by late summer 2009. SAIL's contribution to the Series A Funding will increase development opportunities for Solix in Asia and Solix's AGS(TM) Technology is well suited for international deployment.
 
 "The need to develop a low-cost, alternative energy source is a growing global concern. Having an international investor take interest in Solix gives us confidence that exciting changes will take place within the global energy market in the coming years. In addition, developing a relationship with SAIL facilitates deployment opportunities for us in Asia and other international markets," said Doug Henston, CEO of Solix Biofuels. He continued, "Algae is an ideal feedstock to produce biofuel because it can be grown in diverse climates, uses little water and does not compete with food crops for land. These factors combined allow for the global adoption of Solix's AGS(TM) Technology."
 
 Other investors in Solix's Series A Funding include: I2BF Venture Capital, Bohemian Investments, Southern Ute Alternative Energy LLC, Valero Energy Corp., and Infield Capital.

 
 About Shanghai Alliance Investment Ltd.
 
 Shanghai Alliance Investment Ltd. is international investment firm based in Shanghai, China that is heavily invested in numerous technology, bioscience and renewable energy companies including international investments that are focused on entities with potential to be deployed within China.
 
 About Solix Biofuels
 
 Solix Biofuels, based in Fort Collins, Colo., is an alternative energy production technology company with emphasis on supplying low-cost, scalable photo-bioreactors that will enable the global production of biofuels using microalgae as a feedstock. Solix Biofuels is an intellectual descendant of the U.S. Department of Energy's Aquatic Species Program, which started in 1978 to explore ways to produce biodiesel from algae. In early 2006, Solix Biofuels was created to continue this work, with a goal of creating a commercially viable biofuel that will help solve climate change and petroleum scarcity, without competing with global food supply. Solix began construction of its Coyote Gulch Demonstration Facility, located on the Southern Ute Indian Reservation, on February 18, 2009 and it is expected to be in full-scale commercial production by late summer 2009. For more information visit www.solixbiofuels.com. 
 
 SOURCE: Solix Biofuels

Solix completes $16.8 million in Series A funding

Posted July 8, 2009
 
 In a bill introduced to the Indian Parliament on July 6 meant to "give effect to the financial proposals of the Central Government for the financial year 2009-2010," the Indian Ministry of Finance said it wants to reduce the basic customs duty on biodiesel from 7.5 percent to 2.5 percent. It also seeks to exempt blended fuels from an excise tax on domestically produced goods. 
 
 Previously exempting biofuels from the excise tax-while petrol continued to pay-was seen as a way to promote the success of renewable energy in the market place. Allowing blended fuels tax benefits too, however, could grow the use even more. "I see a lot of value [in India], but the question will be transport and logistics," a Chicago trader told Biodiesel Magazine.

 
 India and Asia have huge market potential for U.S. biodiesel sales. "India lacks sufficient domestic energy resources and must import much of its growing energy requirements," reported the U.S. DOE. "The country's ability to secure a reliable supply of energy resources at affordable prices will be one of the most important factors in shaping its future energy demand."
 
 Last year when India raised oil prices citizens took to the streets in protest. The Indian government controls the nation's fuel pricing mechanism, and despite the riotous episode in 2008, it has taken steps to deregulate the market in recent years. The state does, however, still heavily subsidize domestic prices of oil products such as diesel, liquid propane gas, and kerosene for consumers. "As such, demand for petroleum products in India has been substantially influenced by the government's pricing scheme," The DOE stated. "With diesel prices significantly lower than other fuels, such as gasoline, demand for diesel rose substantially, by as much as 25 percent between 2006 and the first half of 2008." 
 
 Certainly India is a huge market for transportation fuels, and the international tariff game that could play out as more countries look to increase their biofuels usage while limited resources are available. This should all be good news for the biodiesel industry-diesel demand rising sharply in the world's second most populous nation, which is growing its wealth, and a recent lowering of an import tax on biofuels. "I've seen a handful of shipments to India-from Argentina and a couple from the Northwest-and I've been selling biodiesel for ten years," said the trader.
 
 In 2007, India consumed approximately 2.8 million barrels of oil per day, making it the fifth largest consumer in the world, and demand grew to nearly 3 million barrels per day in 2008. This is a sales situation that the biodiesel industry will play a part in once it positions itself to move large volumes half way around the world. "Without a doubt the U.S. will be a net exporter of biodiesel, it will go to the highest bidder and tariffs will dictate the economics," the trader said. "But right now there is absolutely no market, and the commercial volumes aren't available to make a shipment to India feasible."

India considers cutting import tax on biodiesel

Posted July 8, 2009
 
 Israel's Seambiotic Ltd., located in Ashkelon, started up in 2003 to "grow and process marine microalgae for the nutraceutical and biofuels industries." The company uses carbon dioxide emissions from power smokestacks for cultivation, and recently entered into an agreement with NASA Glenn Research Center to "develop an on-going collaborative [research and development] for optimization of open-pond microalgae growth processes."
 
 Seambiotic uses these waste products as a raw material to cultivate the microalgae, making it the cheapest method to harvest the organism. The research was previously conducted on a pilot level but is now transitioning to a larger, more industrial scale, the company stated. Noam Menczel, director of investor relations and business development at Seambiotic, told the Jerusalem Post Tuesday that not many companies are recognized by NASA as a technology leader.
 
 "Under a Space Act Agreement, NASA is partnering with Seambiotic USA to model growth processes for microalgae for use as an aviation biofuel feedstock," said Ami Ben-Amotz, chief scientific advisor to Seambiotic in an official statement. "The goal of the Agreement is to make use of NASA's expertise in large scale computational modeling and combine it with Seambiotic's biological process modeling to make advances in biomass process cost reduction."
 

 NASA's Glenn Research Center in Cleveland is one of the agency's 10 field centers, focused on conducting basic-level research. The center works to develop technology and advance scientific projects.

NASA, Seambiotic partner in algae project

Posted July 13, 2009
 
 USDA projected the U.S.soybean supplies higher and prices slightly down in its July 10 World Agricultural Supply and Demand Estimates report. Global oilseed production was projected to hit a record for 2009-'2010. USDA dropped its projections for soybean oil used for methyl esters in the U.S. to 2,000 million pounds compared to 2,200 million pounds projected in the previous month's report. That compares with USDA's estimates of 1,650 million pounds used for biodiesel in the 2008-'09 marketing year and 2,345 million pounds in 2007-'08. 
 
 U.S. oilseed ending stocks for 2009-'10 were projected at 8 million tons, up 1.1 million from last month. Higher soybean stocks accounted for most of the increase. Oilseed production was projected at 96.3 million tons, up 1.8 million tons, with increased soybean production accounting for most of the change. Soybean production was projected at 3.26 billion bushels, up 65 million due to increased harvested area. Harvested area estimated in the June 30 acreage report was 1.5 million acres above the June projection. The soybean yield was projected at 42.6 bushels per acre, unchanged from last month. Increased exports and crush partly offset increased supplies, leaving projected 2009-'10 ending stocks at 250 million bushels, up 40 million from last month.
 
 Prices for soybeans and soybean products were all reduced this month. The U.S. season-average soybean price for 2009-'10 was projected at $8.30 to $10.30 per bushel, down 70 cents on both ends of the range. Soybean meal prices were projected at $255 to $315 per short ton, down 20 dollars on both ends. Soybean oil prices were projected at 31 to 35 cents per pound, down 2 cents on both ends of the range.
 
 Global oilseed production for 2009-'10 was increased 2 million tons to a record 423.4 million tons. Foreign production was projected up 0.2 million tons to 327.1 million tons. Soybean production was projected at a record 243.7 million tons, up 2.1 million due mostly to higher production in the United States. Production was also raised for Canada based on higher harvested area reported by Statistics Canada. Increased sunflowerseed production for Ukraine and the United States was partly offset by a reduction for EU-27. Rapeseed production was increased for Canada as higher harvested area was only partly offset by reduced yields. Other changes include reduced rapeseed production for Ukraine and EU-27. 
 
 U.S. soybean exports for 2008-'09 were projected at 1.26 billion bushels, up 10 million from last month reflecting continued strong shipments and sales. In addition, higher projections for soybean meal exports and domestic soybean meal use resulted in a 5-million bushel increase in soybean crush to 1.655 billion bushels. Despite the increase, domestic soybean meal use for 2008-'09 was projected down 8 percent from 2007-'08 due to reduced meat production and increased supplies of alternative protein sources. 
 Increased soybean exports and crush were offset mainly by reduced residual use, leaving ending stocks for 2008-'09 unchanged at 110 million bushels.
 
 For corn, the July 10 WASDE report projected 2009-'10 production at 12.3 billion bushels, up 355 million from last month as higher estimated area from the June 30 acreage report boosted production prospects. Corn supplies were projected at 14.1 million bushels, up 335 million bushels from 2008-'09. The 2009/10 marketing-year average farm price for corn was projected at $3.35 to $4.15 per bushel, down 55 cents on both ends of the range. Ending stocks for 2008-'09 were raised 170 million bushels as lower domestic use more than offsets an increase in expected exports. 
 

 Food, seed, and industrial use was lowered 120 million bushels with reductions projected for use in ethanol, sweeteners, and starch. The decline in corn prices boosted ethanol producer margins; however, reduced production of gasoline blends with ethanol in May and June, based on the most recent weekly data, indicate lower-than-expected ethanol corn use. Feed and residual use was lowered 100 million bushels as indicated by the June 1 stocks. Exports were raised 50 million bushels based on recent increases in shipments and the high level of outstanding sales for the 2008-'09 marketing year. The marketing-year average price was projected at $3.95 to $4.15 per bushel, down 15 cents on both ends of the range reflecting sharply lower summer price prospects.

WASDE: soy supplies up, biodiesel use down

Posted July 13, 2009
 
 A majority of member states in the European Commission affirmed provisional countervailing duties on July 7 that were <a href="http://www.biodieselmagazine.com/article.jsp?article_id=3338">initially imposed in March </a> on U.S. biodiesel imports into the European Union, effectively shutting down biodiesel shipments. The action was expected and will extend the duties for five years.
 
 "This is an unfortunate decision," Manning Feraci, vice president of federal affairs for the National Biodiesel Board, said. "Throughout this case, we have constantly put data on the record that clearly shows the European biodiesel industry was not being harmed by U.S. competition. In fact, some EU companies have fared quite well. For those that have not, it is factors unrelated to U.S. competition - bad business models; high feedstock costs; and detrimental EU member state policy- that are to blame. The decision to ignore these fundamental facts has yielded a protectionist result that is detrimental to all parties involved. Moving forward, the U.S. biodiesel industry will certainly reserve our right and ability to further address this flawed outcome." 
 
 <a href="http://www.ebb-eu.org/EBBpressreleases/PR%20B99%20publication%20definitive%20measures%20%20070709.pdf ">The European Biodiesel Board</a> lauded the approval of the anti-dumping and countervailing measures. "[The] decision by the Council of Ministers confirms that the U.S. claims were misleading and self-defeating. They could not break the strong causality link between unfair U.S. biodiesel trade and the damage suffered here in Europe. It is our greatest satisfaction to see the positive conclusion of a process initiated by EBB more than two years ago, involving considerable time and resources, for the defense of our endangered industry" said EBB Secretary General Raffaello Garofalo. 
 
 The EBB further said the European Commission actions are not protectionism. "EBB's complaints were motivated by the legitimate right to operate in a level playing field. In that sense, the robust measures ultimately adopted today by EU authorities will benefit fair international trade in biodiesel, also avoiding unnecessary transatlantic shipments that were largely undermining CO2 reduction efforts," the EBB statement said.
 

 To read the July 7 documents from the Official Journal of the European Union regarding the countervailing duties, see <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:179:0001:0025:EN:PDF">Council Regulation 598</a> and <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:179:0026:0051:EN:PDF ">Council Regulation 599.</a>

July 2009

Business Briefs

Business Briefs: Companies, Organizations & People in the News

Columns

Indirect Land Use and Y2K

Biofuel Producers to Bear New Burden of Proof with RFS2

Tell EPA its RFS2 Proposed Ruling is Fatally Flawed

Featured

Winds of Change: German Biodiesel Industry Faces Challenges

Adjusting the Quality Spec Won't Alleviate Post-Production Concerns

A Solid Catalyst Unlike the Rest

Brewing Biobutanol in Salem

A Lasting Legacy

July 2009.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

Business Briefs: Companies, Organizations & People in the News

Columns

Indirect Land Use and Y2K

Biofuel Producers to Bear New Burden of Proof with RFS2

Tell EPA its RFS2 Proposed Ruling is Fatally Flawed

Featured

Winds of Change: German Biodiesel Industry Faces Challenges

Adjusting the Quality Spec Won't Alleviate Post-Production Concerns

A Solid Catalyst Unlike the Rest

Brewing Biobutanol in Salem

A Lasting Legacy

July 2009