Today in Biofuels: Brazil blasts US, Europe biofuels protectionism; three new US biofuels plants; Global Forest Coalition chief tells Bali conference that “biofuels must be stopped”

Top Story:

Brazil accused the United States and Europe of having a “biased and protectionist agenda” at the World Trade Organization. Brazil was criticizing a proposed compromise on commercial rules which it said are biased towards the US. The offer from the US and the European Union was to exempt 43 “green products” from trade tariffs to stimulate use of climate-friendly products, but excluded ethanol and other goods primarily produced in Brazil.

Producer News:

In North Carolina, construction is set to commence at a 75 Mgy corn ethanol plant at Raeford owned by Clean Burn Fuels. The plant has received 10 year county tax abatement and a $35 million loan guarantee from the USDA.

In Iowa, East Fork Biodiesel has opened its 60 Mgy soy-based biodiesel plant in Algona. The plant will be Iowa’s largest and bring the state’s biodiesel capacity to 250 Mgy.

In New York, Western New York Energy opened its 50 Mgy corn ethanol plant in Orleans County. The $90 million plant will produce distillers grains and 95,000 tons of carbon dioxide for beverage companies.

International News:

In Canada, a 5 percent ethanol mandate will commence in Manitoba on January 1, 2008. The province expects to increase the mandate to 8.5 percent by April 1, 2008. The mandate is not expected to affect consumers in the pocketbook, due to the low price of ethanol.

In Peru, Pure Biofuels completed its acquisition of InterPacific Oil’s biodiesel plant. Pure Biofuels will expand the plant’s capacity to 10 Mgy by the end of the year. Pure Biofuel’s total capacity will exceed 60 Mgy when the InterPacific output is combined with the 52.5 Mgy output at Pure Biodiesel’s new plant in the Port of Callao, scheduled to open in the first quarter of 2008.

In Indonesia, First Resources expects to raise $170 million from an IPO on the Singapore exchange, the company announced. The crude palm oil producer recorded revenues of $84 million for the first half of 2007, up 101.8 percent from a year ago. Profit rose 145 percent to 15.2 million dollars on the impact of rising palm oil prices.

In South Africa, the long-awaited national biofuels strategy is said to exclude corn as a biofuel feedstock, according to reports. The farmers union criticized the rumored exclusion, saying that South Africa has the capacity to produce 13 million tons of corn per year while the domestic market, which the industry experts described as “stagnant”, demanded only 10 million tons.

Research News:

Researchers at Kansas State University said that cattle that are fed distillers grains have elevated levels of E. coli 0157 bacteria, and that this raises a potential health hazard to humans eating undercooked meat. Each bushel of corn processed for ethanol produces 18 pounds of distillers grains, which have been considered an excellent livestock feed.  Meanwhile, the National Corn Growers Association said that ” 30 million metric tons of U.S.-produced distillers grains have been traded effectively in the last five years with minimal government participation.“More than 12 million metric tons of distillers grains were produced and sold in 2006/07, up from 8.4 million metric tons in 2005/06. Distillers grains production is expected to top 17 million metric tons in 2007/08.”

The US Department of Energy announced four grants totaling $7.7 million for support of cellulosic ethanol projects. The winning teams developed projects that showed new methods to eliminate contaminants generated during the ethanol conversion process.

Policy and Policymakers:

At the 13th UN Conference on Climate Change in Bali, Indonesia, attended by more than 10,000 delegates from 187 countries, Global Forest Coalition chairperson Miguel Lovera said “agrofuels only take land away from forests and people. They must be stopped.” Lovera said that biofuels are a cause of global warming because they promote deforestation and the destruction of ecosystems which help regulate the climate. He referred to Indian farmer protests as a sign that small landowners were already rebelling against the conversion of lands to biofuel plantations. Lovera warned that if biofuels were not stopped, there would be a dramatic rise in world hunger.

Consumer and Fleet News:

In Washington, lawmakers are expected to vote this week on the House Energy bill. Among is lesser-publicized features is a provision to improve the potential for E85 sales. The bill prohibits franchise agreements by oil companies that place restrictions on the installation of E85 pumps, or on marketing or sales activity associate with the sale of E85. The bill also establishes grants and tax credits to encourage the installation of E85 pumps. Although there are 4.3 million flex-fuel cars on the road, a study by the Union of Concerned Scientists found that less than 1 percent use E85, primarily because there are fewer than 1300 stations that sell it.

Financial News:

The Biofuels Digest Indexâ„¢, a basket of public biofuels stocks, rose 2.5 percent yesterday to close at 107.49. Among large cap diversified agribusiness, Archer-Daniels-Midland (ADM) was up 2.58 percent to $37.03, while pure play ethanol stocks rose across the board, led by Aventine Renewable Energy (AVR) which was up 6.01 percent to $10.76 at the close. Among small caps, BioSolutions Manufacturing (BSLM.OB) fell 19.18 percent to close at $0.059. Overall, gainers led losers 3 to 2 on the day.

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