Today in Biofuels: Major study finds switchgrass potential much larger than anticipated; Brazil’s Santelisa Vale makes its move; Thailand biofuels boom; feedstock costs drive innovative approaches to canola, grease in NZ and US

Top Story:

In the first comprehensive report on the biofuel potential of switchgrass, a new study published in the Proceedings of the National Academy of Science says that switchgrass has a yield of more than five times the energy inputs needed to grow and process it into ethanol. The 10-farm, five year study was conducted across the Midwest and potentially is key to unlocking the potential of cellulosic ethanol in the US.

Producer News:

In Missouri, Bunge announced that it will become the process implementation partner in the launch of Verenium’s new Purifine enzyme for seed oil refining.

In Connecticut, CT Biodiesel has applied for zoning permits for a 50 Mgy canola and soy-based biodiesel plant in Suffield, the first commercial-scale facility in Connecticut. Under its proposal, the company would provide 35,000 gallons of biodiesel free to Suffield.

In Nebraska, Agri Energy has announced that it will sell its interests in Beatrice Biodiesel to a management group backed by Pangaea Technology Finance, for $42.5 million. In a note to shareholders, Agri Energy CEO Peter Anderton said that the company was selling its main asset to reduce debt while it reassesses its biofuels strategy in light of worldwide increases in feedstock prices. Under the agreement, the new ownership group has secured an additional $50 million in debt financing towards completion of the plant.

In Texas, Earth Biofuels has signed an agreement with Alliance Processor to acquire 267,000-400,000 gallons per month of yellow grease, primarily from restaurants. The price of yellow grease is materially lower than the price of soybean oil, the feedstock used by most US biodiesel processors.

International News:

In Brazil, the state development bank, BNDES, will pay $85 million for new shares issued by Santelisa Vale, the country’s second largest ethanol producer. Santelisa Vale has planned an IPO and has announced an investment in six new sugar and ethanol plants, which will increase its processing capacity to 35 million tons of cane by 2012, up from 19 million today.

In New Zealand, Biodiesel New Zealand said that it is testing canola production in the South Island to produce lower cost feedstocks for a proposed 6 Mgy biodiesel processing plant. Biodiesel New Zealand, now 90 percent owned by Solid Energy, the state-owned coal mining concern, is expanding its production from its original feedstock of restaurant and food processor grease. Solid Energy announced plans to increase production capacity as much as 4000 percent, but a 90 percent increase in canola prices has affected its plans.

In Israel, Ormat Industries said it was shelving plans to build a biodiesel plant, and writing down a $1.8 million investment in R&D in support of the proposed facility. The company will focus on its partnership with Evogene in the developing of high-yield, non-edible plants for as biodiesel feedstocks. The company said that high feedstock prices were the cause of the decision to suspend development.

In Thailand, Energy Minister Piyasvasti Amranand said that biofuels sales would increase in 2008 to $469 million from $157 million in 2007. He said that the cost of oil imports have fallen 10% as a result of biofuel usage and a stronger currency, adding that gasoline would be replaced by E10 and E20 blends by 2012.

Research News:

In North Carolina, the new Biofuels Center of North Carolina held its first meeting yesterday, and set a goal of eliminating the state’s dependence on 5.6 billion gallons of imported fuels by as soon as 2018. The Biofuels Center will identify next-generation crops and processes for biofuels, building on the advantages provided by North Carolina’s robust $60 billion agriculture industry platform.

Policy and Policymakers:

In Florida, state agriculture commissioner Charlie Bronson said five ethanol plants were in the planning process in the state, and U.S. Rep. Tim Mahoney, D-Palm Beach Gardens, added that the state has as much as 60 Mgy in production capacity based on citrus waste. The two spoke to the 25 x 25 group, which aims to reduce US energy dependence on foreign oil by 25 percent by 2025.

Consumer and Fleet News:

Magellan announced that it is constructing biofuels blending systems at its terminal in west Tulsa, and will build four more systems in Oklahoma, Georgia and Delaware. The system permit trucks to load blends of ethanol from E10 to E85 and deliver within a 75 mile radius. Magellan currently has blending capabilities at 36 of its 81 US terminals.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, fell 0.29 percent yesterday to 132.49, while losers and gainers evened out overall but weakness among ethanol stocks caused a slight fallback. Among diversified agribusiness, The Andersons (ANDE) fell 1.13 percent to $46.23, while Pacific Ethanol fell 7.34 percent to $8.20 to lead an overall pullback among mid cap ethanol pure plays. Among small caps, Better Biodiesel fell 17.99 percent to $1.55 in the turbulence of its reverse merger with GAT, while Xethanol continued a strong rise with a 12.37 percent gain to $1.09, finally erasing a series of losses that occurred during the overall investor flight from ethanol last fall.

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