Daily Biofuels Summary for October 3: Online biofuel, feedstock exchange launches as global policies in focus
Top Story: A new company has launched to provide an online exchange and marketplace for trading of smaller biofuel feedstocks and fuels. Green Fuels Exchange, at www.gfex.org, launches Oct. 15 as “the first marketplace in North America dedicated to green fuels and their raw materials.”
Producer News: Archer-Daniels-Midland said that it will continue with plans to build 550 Mgy in new ethanol capacity in 2008, but said that ADM would switch to high fructose corn syrup or lysine production if ethanol became unprofitable.
International News: In Australia, farmers indicated overwhelming support for ethanol mandates. 61 percent of surveyed farmers supported mandates, with 20 percent undecided and 18 percent opposed….In India, 10 sugar-producing states have agreed to a framework for a national E10 mandate. India’s sugar crop this year is expected to exceed 29 million metric tons. With domestic consumption at 19 million tons and exports at 1.5 million tons, the country is facing a daunting sugar glut. The ethanol mandate is seen as an alternative to the potential collapse of the Indian sugar industry….A renewable energy law has been passed in the Dominican Republic which removes all taxes from all equipment, sales, and income for at least 10 years, pays up to 75% of the cost of installing solar or wind in homes or community co-ops, and an incentive for utilities for renewable energy production.
Research News: In Switzerland, the International Institute for Sustainable Development (IISD) published a study calculating a $760-$1000 cost per metric ton for reducing carbon dioxide emissions through sugar beet ethanol. For the same cost, 160 tons of carbon offset credits could be purchased through the Chicago Climate Exchange. The study indicated that a carbon tax was a more cost effective path for climate control….At the Greenhouse 2007 conference, a report was released citing that among plants under investigation as biofuel sources, two — jatropha and spartina — were banned in Australia and featured on a global list of the 30 most invasive plants….The Energy Information Administration reported that July US ethanol production was 13.05 million barrels, up 519,000 from June. Imports grew to 1.45 million barrels in July, up from 596,000 barrels.
Policy and Policymakers: US Presidential candidate Fred Thompson said that the world has changed since his two votes against ethanol subsidies and tax credits in the 1990s. He was speaking after campaigning in Iowa, the leading US ethanol and biodiesel producing state which is home to the critical Iowa presidential caucuses in January 2008….In Michigan, Congressman John Dingell (D-Mich) has proposed a 50-cent-per-gallon tax on gasoline and $50-per-ton tax on carbon emissions. Ultra-low sulfur diesel fuel and biodiesel would be exempt from the carbon tax. Proceeds would go to highways, mass transit, medicare, social security and health care….In Washington, lawmakers expect to proceed this week with a conference on the 2007 Energy Bill, or new legislation to reconcile differences between the House and Senate versions of the Bill. A battle is looming over CAFE standards increases which are opposed by US auto makers
Consumer and Fleet News: Nissan indicated that it would focus on electric hybrid cars rather than biofuels, citing concerns about the availability of fuel.
Financial News: Cleantech investment by venture capital increased to $1.1 billion in the first half of 2007, up 35% from 2006. Activity focused on US solar investment and alternative fuels….The Biofuels Digest Index, a basket of publicly traded biofuels stocks, lost 1.76% to close at an all-time low of 96.67 as weak job data caused jitters in the broader markets and continued problems among ethanol producers resulted in lower profit estimates and share price targets from analysts. Aventine fell 6.46% to $9.12 after Aventine (AVR) CFO Ajay Sabherwal attempted to make the case yesterday for his company at Citigroup’s “Ethanol on the Cob II” biofuels conference. Aventine has fallen more than 10 percent in the past two days. VeraSun (VSE) and US BioEnergy (USBE) were also off more than 2%, while Archer-Daniels-Midland (ADM) and The Andersons (ANDE) were down less than 2%. Microcaps had a more mixed day, with Green Energy Resources (GRGR.PK) up over 11% on the day while Environmental Power (EPG) was down 3.04% to close at $5.10.
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