Brazil Ethanol Mills Eye Move into Plastics with Chemical Firms

Dow Jones just published an interesting article on the state of the investments on bioplastics from sugarcane.

Brazil Ethanol Mills Eye Move Into Plastics With Chemical Firms

SAO PAULO (Dow Jones)–Brazilian ethanol mills are reaching out to chemical companies to develop plastics and other products in a bid to diversify. The mills harvest sugar cane and crush it into sugar or ethanol, but the operators are now looking to earn new revenue by sourcing ethanol as a raw material for plastics and products ranging from solvents to cosmetics. While industry observers see an opportunity for Brazilian mills to partner with chemical companies to tap this market, some say it could take years.

Read more »

Biofuels Investment Fueling Brazilian Move into Africa

Tthe Financial Times has an overview of rising Brazilian investments in Africa, noting that Odebrecht has become the largest private employer in Angola, and Vale’s interest in Mozambique development. The article also notes the six trips that Brazilian president Lula hags led on economic development issues. Imports from Africa to Brazil have grown to $18.5 billion in 2008, up from $3.0 billion in 2000.

Brazil’s CPFL signs deal to build 40MW bagasse power plant

Brazilian power company CPFL Energia has inked an accord with sugarcane and ethanol company Grupo Farias that enables the São Paulo-based electricity company to invest R$127 million in the construction of a new 40 MW biomass power plant to be fuelled with sugarcane bagasse. Grupo Farias will use 15 MW of the plant’s installed capacity for its own needs at a new sugar and ethanol refinery that will be built near the plant. CPFL Energia, which controls the remaining 25 MW, has already sold 70% of its share of electricity in the federal power auction held in 2006.

On Jay Leno, Bill Maher Rips into Corn Ethanol

To watch the segment, scroll to 23:50 minutes.

Analysts Welcome Shell, Cosan Biofuel-focused Venture

The joint venture, recently announced by oil major Royal Dutch Shell and Brazilian sugarcane ethanol producer Cosan, could push Brazilian ethanol into world markets, according to investment analysts. “This is entirely logical — a brilliant move by both sides”, a senior commodities analyst at VM Group in London, Gary Mead said adding that the deal may help “break down barriers, both covert and overt.” After an 11% rise in Cosan’s share price after the venture was announced, Citi analysts confirmed their “buy” recommendation. See Brazil hopes Shell-Cosan can boost ethanol exports.

Even though the Brazilian sugarcane-based ethanol offers sigfnificant greenhouse gas reductions, local producers have struggled to tap export markets and face import duties, especially in the US. And though are a number of other countries eager to diversify away from fossil fuels, John Urbanchuk, a director at Pennsylvania-based consultancy LECG pointed out taking into consideration that expiring tariff barriers on imports of ethanol in the US may remain in some form. “But the US is not the only market for ethanol – a number of other countries are looking to diversify away from fossil fuels, including China,” he added. “This deal gives Shell a really good platform for those export markets as well.”

Dow Jones: EPA’s ‘Green’ Calculation Method For Ethanol Still Opposed

According to Dow Jones’ Bill Tomson,the corn ethanol lobby still doesn’t like EPA’s revised calculations on corn ethanol’s lifecycle emissions. Here’s the article:

The Enivoromental Protection Agency’s unveiling of a new U.S. renewable-fuel standard has revived opposition to a controversial method used by the agency to determine just how ‘green’ corn-based ethanol and other biofuels are. EPA Administrator Lisa Jackson told reporters this week that previous “indirect land use” calculations–for example, judging whether forests are cut down in other countries to make up for farmland used in the U.S. to produce soybeans and corn for biodiesel and ethanol–weren’t accurate.  Newer indirect-land-use calculations by EPA, she said, showed ethanol and biodiesel production have less of an impact on foreign farming practices than the agency had earlier determined.

Still, the industry maintains that it’s uncomfortable with the indirect-land-use principle. Also, Growth Energy spokesman Chris Thorne said, the shift in how EPA viewed ethanol and biodiesel only underscores a lack of reliability in the calculations. Growth Energy is a group representing U.S. ethanol producers. Many U.S. lawmakers also oppose the calculations, even though the newer ones appear more favorable to U.S. ethanol and biodiesel producers. Read more »

Growth Energy’s Gen. Clark Applies Tough Tactics for Corn Ethanol Industry

The Hill’s Ben Geman did an interview with Growth Energy’s chief lobbyist — and former NATO Commander — Wesley Clark. Based on what Gen. Clark says, the recent EPA publication of the new rules for Renewable Fuel Standard (RFS2) was only possible because of his organization’s “aggressive lobbying and public relations” strategy over the last year. Wow!

EPA Decision on Sugarcane Ethanol to Boost Brazilian Industry

The US Environmental Protection Agency’s (EPA) decision to classify sugarcane-based ethanol as an advanced biofuel will benefit Brazilian ethanol producers, Julio Maria Borges, a director at sugar and ethanol industry consultancy Job Economia e Planejamento, told BNamericas. “The US will need Brazilian ethanol to meet its biofuel targets. This classification confirms the quality of our ethanol and will inevitably open a huge market for it,” he said. Read more »

Big Oil: RFS Regs to Drive Prices up; Lawsuits Coming

Not surprisingly, Big Oil’s lobby is expressing displeasure over the Environmental Protection Agency’s (EPA) move to revise the Renewable Fuel Standard (RFS2). Though the oil and gas industry appreciates ethanol’s role in the marketplace, the American Petroleum Institute (API) said, “we are deeply concerned that the announcement could result in higher consumer costs.” The lobby for the refiners, the National Petroleum Refiners Association (NPRA), is already talking legal challenges. In a statement, NPRA said “while we are still in the process of reviewing these lengthy and complex regulations, we are concerned that a few key provisions evade sound science and may even be unlawful.” In fact, this week NPRA filed suit against California’s Low Carbon Fuels Standard (LCFS).

New Biofuels Regs Could Still Face Fight From Capitol Hill

New Obama administration biofuels regulations would give ethanol a larger share of the U.S. renewable fuels mix, but not enough to satisfy some farm-state lawmakers on Capitol Hill, according to the New York Times’ Greenwire. Read more »

EPA Chief Goofs saying Corn Ethanol is an “Advanced” Fuel

Des Moines Register’s Philip Brasher points out in his blog that that EPA Administrator Lisa Jackson goofed on a key issue involving the revised biofuels rules that her agency issued today: What impact the new carbon emission assessments would have on future of the ethanol industry. In response to a question Brasher asked her on a conference call, Jackson said that corn ethanol could now qualify as an advanced biofuel and exceed the 15-billion gallon limit that Congress put on corn ethanol in the Renewable Fuel Standard.

Jackson’s statement surprised all and had a lot of heads scratching around Washington. Tonight, EPA issued a correction: Administrator Jackson misspoke on today’s call. Corn ethanol, based on EPA’s updated modeling, meets the 20 percent GHG reduction requirement qualifying it for use as a conventional biofuel – not an advanced biofuel, which must meet a 50 percent reduction requirement.

What that means is that corn ethanol can’t grow beyond 15 billion gallons in capacity – and still qualify toward meeting the annual usage mandates – unless Congress changes the law. What Brasher asked Jackson was whether the administration would support increasing that limit, something the ethanol industry would like to do. That was one reason it was important that EPA rule that ethanol met the 20-percent greenhouse-gas target.

EPA Confims Sugarcane Ethanol is a Low Carbon, Advanced Renewable Fuel

After months of anticipation, the U.S. Environmental Protection Agency (EPA) issued rules measuring carbon emissions from biofuels such as ethanol or biodiesel. The revised Renewable Fuel Standard (RFS2) requires that all biofuels, except existing corn ethanol facilities, must emit less greenhouse gases than gasoline over the lifecycle of the fuel.

In order to be considered an “advanced” renewable fuel, biofuels have to be at least 50% cleaner than gasoline. According to EPA, sugarcane ethanol far surpassed the minimum threshold with 61% less GHG emisisons than gasoline. Nathanael Greene of the National Resources Defense Council (NRDC) said “the final RFS2 rule confirms that there are major differences between different types of biofuels. Some reduce global warming and some pollute more than gasoline and diesel.” So sugarcane ethanol passes the test then and not surprisingly the Brazilian Sugarcane Industry Association (UNICA) praised the RFS2 with this statement:

EPA Reaffirms Sugarcane Biofuel is Advanced Renewable Fuel with 61% Less Emissions than Gasoline; Brazilian Sugarcane Industry Welcomes U.S. EPA’s Renewable Fuels Rules

The U.S. Environmental Protection Agency (EPA) has confirmed that ethanol made from sugarcane is a low carbon renewable fuel, which can contribute significantly to the reduction of greenhouse gas (GHG) emissions. As part of today’s announcement finalizing regulations for the implementation of the Renewable Fuel Standard (RFS2), the EPA designated sugarcane ethanol as an advanced biofuel that lowers GHG emissions by more than 50%.

The EPA’s decision underscores the many environmental benefits of sugarcane ethanol and reaffirms how this low carbon, advanced renewable fuel can help the world mitigate against climate change while diversifying America’s energy resources,” said Joel Velasco, Chief Representative in Washington for the Brazilian Sugarcane Industry Association (UNICA). Read more »

Obama to Outline Biofuels Strategy as EPA Releases RFS2

According to Reuters’ Jeff Mason, “President Barack Obama on Wednesday will outline a government strategy to boost development of U.S. biofuels and address their environmental challenges, an administration official said. The strategy will be laid out in a report (Growing America’s Fuel) by the Biofuels Interagency Working Group, a body the president established to help spur investment in biofuels and make the industry more environmentally friendly.” U.S. Environmental Protection Agency (EPA) Administrator Lisa Jackson is scheduled to join Obama in a meeting with various of state governors to discuss energy policy and the “opportunities and challenges presented by the transition to a clean energy economy,” the official said.

Coinciding with Obama’s announcement, the EPA also could issue new rules on measuring carbon dioxide emissions from biofuels such as ethanol. (See OMB Completed Review of RFS2 Rules.) Under a 2007 energy law, ethanol made from corn must emit less of the main greenhouse gas, carbon dioxide, than gasoline over the life cycle of the fuel, from production to being burned. Cellulosic fuels, made from crop waste and the woody bits of nonfood crops, would have to be even cleaner. The struggling biofuels industry is concerned that the Obama administration will move too quickly away from ethanol, which is mostly made from corn, to more difficult techniques using wood chips and other biomass.

According to Des Moines Register’s Phil Brasher, the Obama administration will release a report today calling for the rapid commercial development of switchgrass and other biofuel crops. Renewable Fuels Association President Bob Dinneen saluted the initiative, saying, “A more coordinated effort from federal agencies, together with the continuation of sound biofuels policies, such as extending existing incentives, will go a long way toward meeting and exceeding America’s renewable-fuel potential.”

EU Approves Additional Sugar Exports, Defying Calls to Adhere to WTO Quota

The European Union approved exports of an additional 500,000 metric tons of sugar above an annual limit permitted by a World Trade Organization decision, defying calls from Brazil, Thailand and Australia to respect the quota.

Oil Refiners & Truckers File Lawsuit Against California LCFS

The National Petrochemical & Refiners Association (NPRA) and the American Trucking Associations (ATA) has joined the corn ethanol lobby in suing the state of California over the Low Carbon Fuel Standard (LCFS). The lawsuit, like the one by corn ethanol trade associations, was filed at the U.S. Federal Court of the Eastern District of California.

According to NPRA, “the California LCFS is unlawful for a number of reasons, including the fact that it violates the Commerce Clause of the United States Constitution by imposing undue and unconstitutional burdens on interstate commerce. California’s LCFS also would have little or no impact on GHG emissions nationwide and would harm our nation’s energy security by discouraging the use of Canadian crude oil – our nation’s largest source of crude – and ethanol produced in the American Midwest.”

In response, the Chair of the California Air Resources Board (CARB) Mary Nichols (pictured above) responded saying, “Their actions are shameful. This is a critical tool to help us break our dependence on fossil fuels. It will protect us from volatile oil prices and provide consumers with cleaner fuels and provide the nation with greater energy security.  Our analysis shows that producing alternative fuels under this standard can save consumers as much as $11 billion over the next decade, and that’s in California alone. Instead of fighting us in court, they should be working with us to provide consumers in California and the rest of the nation with the next generation of cleaner fuels.”

Amyris and Australian Univ. Developing Jet Fuel from Sugarcane

The University of Queensland, Australia and California-based Amyris are partnering to explore potential business opportunities for the conversion of sugarcane into renewable jet fuel. The agreement, which was signed at the San Francisco offices of Amyris on 20 January, will allow researchers from UQ’s Australian Institute for Bioengineering & Nanotechnology (AIBN), led by Professor Lars Nielsen, to work in a collaborative fashion with Amyris scientists to develop yeast cells capable of converting sugar (sucrose) into long chain alkanes of use in sustainable jet fuels.

OMB Completed Review of RFS2 Rules

According to Rachel Gantz at OPIS, the White House’s Office of Management & Budget (OMB), the inter-agency review of the proposed Renewable Fuels Standard (RFS2) has been completed, clearing the way for the U.S. Environmental Protection Agency (EPA) to public the final rulemaking. Dow Jones is now reporting that the RFS2 will  be made public tomorrow (Wednesday).

The big question now is what’s in the final rule. Here are some recent posts on the RFS2:

Could Sugarcane Ethanol be headed to Sunoco’s Plants?

Sunoco announced it is selling its polypropylene plants in U.S. mid-Atlantic region to Brazil’s Braskem for $350 million. As readers of this blog know, Braskem has been investing heavily in the sugarcane  sector to use ethanol not as a fuel for cars but as a feedstock for its plastics business. While Braskem has not said anything about how it may change the way it uses its new assets in the U.S., one has to wonder if what works in Brazil works for the U.S.?

Soros-Backed Venture Weighs IPO to Fund Brazil Ethanol Mil

Billionaire George Soros’s Adecoagro venture, which invests in agriculture and renewable energy in Latin America, is considering an initial public offering to help fund projects in Brazil that include a $700 million sugar mill. “We never had difficulties in raising capital from shareholders, but if market conditions are attractive, we could go for an IPO, why not?” Marcelo Vieira, a director for sugar and ethanol at the Buenos Aires-based company, said yesterday in an interview with Bloomberg. “The sugar and ethanol sector in Brazil is thriving so we decided to focus our new investments here.”

Brazil, Australia & Thailand Condemn Extra EU Sugar Export

Australia, Brazil and Thailand called on Monday for the immediate withdrawal of an additional export of 500,000 tonnes of out-of-quota sugar by the EU, saying it was illegal under World Trade Organisation (WTO) rules. The three states, which won a WTO dispute with the European Union over its sugar export subsidies five years ago, warned it they did not rule out further action, including the possibility of reopening the case which could lead to retaliation. The European Union’s executive Commission announced the extra sugar exports in the current 2009/10 marketing year last week as sugar prices hit 29-year highs.