South Africa’s biofuel policy has kept the country out of the rush towards biofuel, to the detriment of thousands of jobs, according to South Africa’s Business Report. Andrew Makenete, the SA Biofuels Association president, said interest in the biofuels sector had died down "substantially, which was a bit of shame. We are missing out on the big energy spurt. Renewable fuels must be viable when crude oil is at about US$140 a barrel. "The local biofuels sector has the potential to create billions of rands in investment and thousands of jobs," he told Business Report. "The sector would also have helped to stimulate agriculture." He conceded that food security was a concern, but added that Brazil had demonstrated that there was scope for both biofuels and food production.
The US government needs to ante up more in loan guarantees to convince lenders to back commercial development of cellulosic ethanol, according to Reuters. Verenium Corp Chairman Carlos Riva said the Farm Bill was a good start in boosting cellulosic technology, which aims to produce large quantities of ethanol for fuel from switchgrass, crop residues and other plant cellulose wastes. Ethanol in the United States is now mostly made from corn. The new farm law provides US$320 million in loan guarantees for the next two years for construction of cellulosic refineries. But an additional US$150 million may be allocated if lawmakers are able to find the funding. But Riva said a moderately sized plant costs more than US$150 million, so more guarantees are needed if the fledgling industry is to meet a renewable fuel standard goal of producing 16 billion gallons of cellulosic ethanol by 2022. "They need to give a helping hand ... so the commercial lending industry can get involved. To meet the mandate ... we need a greater focus, more support," Riva said in an interview on the sidelines of the BIO International Convention. "It's going to be very difficult to convince a commercial bank to take the technical risk associated with the new technology," he added. Based in Cambridge, Massachusetts, Verenium operates one of the nation's first cellulosic ethanol pilot plants. It is in the start-up phase of a larger facility in Jennings, Louisiana, that would produce 1.4 million gallons of ethanol a year. Verenium refines local feedstocks, including sugarcane bagasse and specially bred high energy sugarcane.
Florida’s Governor Charlie Crist suggested the US$1.75 billion buyout of US Sugar in November when negotiating over environmental regulations, according to the Palm Beach Post newspaper. Officials for the Clewiston-based sugar giant requested the meeting with Crist to find out where he stood on their plan to back-pump water into Lake Okeechobee. Crist said he wasn't keen on the idea. "About halfway through that conversation, the governor looks at us and says, 'I have an idea. Why don't we just buy you out?' " said Mac Stipanovich, a Tallahassee lobbyist who represents US Sugar Corp. "And after we climbed back into our chairs, we discussed that ... for a little while longer and we brought that to our client and that began the discussions." "I think they saw the writing on the wall as it relates to the administration's view of this thing, and wouldn't it ... be more productive to start to explore what the land values might be and how that might affect the company going forward?" Crist said Tuesday. US Sugar was originally looking for US$2.5 billion for the land sale.
BRAZIL: Copersucar sees 2008/09 ethanol exports up 50%
Copersucar says Brazilian ethanol exports from the centre-south could rise this season by at least 50% over last year's crop as US demand for the biofuel surges, according to Reuters. "Total exports could reach 4.5 billion to 5 billion litres ... due mainly to the increase in US ethanol prices," said Soren Jensen, international trading manager at Copersucar, one of Brazil's largest sugar and ethanol trading groups. Jenson said the amount of ethanol exported depended more on how much Brazil could produce and its transport infrastructure could handle rather than how much the United States needed since its demand was strong. "Exports this season will rise by at least 50%, possibly 60% or 70%," he said during an agribusiness seminar in Sao Paulo
BRAZIL: Cosan sees sugar price up 34% in two years
Cosan says surging demand for sugar and ethanol should push sugar futures up by about a third in the next two years to 17 cents per pound, according to Reuters. Cosan said current prices were too low to drive up output enough to meet rising world demand for sugar and ethanol. "The world will need more cane, the most competitive country is Brazil, so prices will have to rise to boost investment in new mills. This is a logic we strongly believe in," said Carlos Murilo Barros de Mello, commercial director at Cosan, Brazil's biggest sugar and ethanol producer.
Physical trading continued at a slow pace this week in the cash sugar markets of Mexico, Central America and Colombia, but some origin offers for 2008/09 crop were reported, according to Dow Jones. Supplies from the 2007/08 harvest, which ended in Central America over a month ago and is now in its final stages of processing and milling in Mexico, were "pretty much all sold," said one US-based trader. "There hasn't really been much trade as far as the physical market is concerned, but we have started seeing some origin interest in selling of the new 2008/09 crop," said the trader, speaking by telephone from New York. But despite some 2008/09 offers from Guatemala, the largest producer and exporter in Central America, little actually was seen trading, as traders say it's still too early to start buying the next crop. "The markets are all so volatile at the moment and we need to have a better sense of direction before logging in any pricing for a harvest that won't start until the end of October," said another trader in the region. A number of smaller containerized cargos with white sugar were reported underway from Guatemala to different destinations in the Caribbean, while Mexican sugar was being shipped to the US by truck at the northern border. Cash differentials for all origins in the region remained stable, with offers for raw sugar for nearby delivery out of Colombia quoted at levels between flat and premiums of 20 points to the New York market.
Morocco is seeking advice from Brazil on biofuel production despite its inability to grow sugarcane, according to Business Intelligence Middle East. The Brazilian foreign office said that since Morocco's dry climate is not suitable for sugarcane farming, Moroccan officials are looking at the ethanol-production potential of other plants. The two ministers also discussed the production of oil using bituminous schist in Morocco. In related news, Morocco has devised a national plan aimed at raising the contribution of renewable energies to the production of energy from 4% currently to 10% by 2020, MAP reported. The plan provides for using solar and wind energy, rationing consumption and encouraging investment, Minister Benkhadra said.
Nicaragua President Daniel Ortega and Colombia's agriculture minister sparred over whether the region should grow more crops to be used in biofuels or boost food production to feed the poor, according to Bloomberg. “For Nicaragua, it's a mortal sin to talk about biofuels,” Ortega said at a summit of regional leaders in Villahermosa, Mexico. “Food is what lacks in our region.” Ortega rejected Colombian Agriculture Minister Andres Felipe Arias's comment that “even the smallest Central American countries have land to plant sugarcane.” Arias said Guatemala had 1 million hectares it could use to produce biofuels without jeopardizing food output, while Honduras had 200,000 hectares to devote to such crops. Colombian President Alvaro Uribe responded to Ortega by saying Colombia promoted policies to boost food output as well as increased biofuel production. Mexican President Felipe Calderon urged countries to grow biofuels without replacing food crops. The US government's decision to give financial incentives to produce corn for ethanol has boosted corn prices in Mexico, he said. Colombia can increase its equivalent oil reserves by more than 300 million barrels if it uses idle fertile land to produce biofuel, Arias said.
Rep. Jeff Flake (R., Ariz.) called on the Inspector General at the US Department of Agriculture to investigate inconsistent data presented by Bush administration officials about the impact of biofuels on food prices, according to the Wall Street Journal. On June 2, Secretary of Agriculture Edward Schafer said in a speech on food security at the United Nations Food and Agriculture Organization in Rome that biofuels contributed 2% to 3% of the overall increase in global food prices over the past year. The secretary's report relied on data supplied by Edward P. Lazear, chairman of the White House's Council of Economic Advisers. Ten days later in testimony before the Senate Energy and Natural Resource Committee, USDA chief economist Joseph Glauber said biofuels contributed up to 10% of the overall increase. Now, members of Congress want to know why there are two sets of numbers and whether the government used more benign numbers in Rome as a way to downplay the role biofuels have played in pushing up food prices. "It is unfortunate that two high-ranking officials from the same agency have made such incompatible fact-based statements," reads Flake's letter dated June 26. The USDA "must be able to produce and disseminate clear and accurate information, particularly when it pertains to the culpability of US policy in skyrocketing food prices." It turns out that Glauber's number is higher because he looked at the overall impact on food prices of maize-based ethanol and soybean-based biodiesel. The White House analysis looked at the impact of only corn ethanol. Because Schafer used the White House data in his speech, he should have used the word "ethanol" instead of "biofuels" because the numbers he used were only pertaining to corn ethanol. Schafer used the word "biofuels" nine times in his speech and during a question-and-answer session with reporters.
US: Dozen biofuel plants go under over high feedstock costs
Soaring maize and soy prices on top of rising construction costs and tight credit markets have pushed about a dozen US biofuel plants to file for bankruptcy protection, according to Reuters. "Corn prices are making the feasibility of ethanol plants every day more and more questionable," said Alex Moglia, president of Moglia Advisors in suburban Chicago, which helps biofuel companies restructure. Moglia said about 12 small to midsize biodiesel and ethanol plants have declared bankruptcy in recent months. Renova Energy LLC, a company that owns a partially built 20 million-gallons-per year ethanol plant in Idaho, was the latest to declare bankruptcy last week. Kansas-based Ethanex Energy Inc declared bankruptcy in March. "There will be more to follow," said Moglia. Some plants are restructuring their debt and taking steps to manage risks, but many others are not, he said. Large ethanol players such as private company Poet Energy, food and grain company Archer Daniels Midland and VeraSun Energy Corp are somewhat protected because of their diversification, efficient plants, and access to cheap train transportation for distributing ethanol. "It's those single purpose-type legal entities that gambled everything into a single plant" that are feeling the squeeze the most, said Moglia.
JAMAICA: Infinity Bio-Energy signs deal on ethanol exports
Infinity Bio-Energy Ltd. said it has signed an agreement with the government of Jamaica, providing it privileged access to the domestic ethanol market and a platform for exporting anhydrous ethanol to the United States, utilising the Caribbean Basin Initiative programme, according to Thomson Financial. Infinity and the government of Jamaica will also form a new company, which will hold the government-owned assets of the Jamaican sugarcane industry and an existing dehydration facility that currently belongs to the Petroleum Corporation of Jamaica.
EU: France says may need re-think on biofuel targets
France says the European Union may have to reconsider its target of getting 10% of transport fuel from renewable sources such as biofuels by 2020, or extend the deadline, according to Reuters. "On biofuels, we do not rule out in the long-run reconsidering the target, but that's not the issue now," French secretary of state for ecology Nathalie Kosciusko-Morizet told visiting EU reporters. She said the EU approach of setting a quota target was "probably a mistake", and it would be better to set strict environmental and social criteria for biofuels and then see what level of use was viable.
PHILIPPINES: Roxas seals deal with Indian company on ethanol plant
Roxas Holdings Inc. said Friday its board has approved the offer of India-based KBK Chem-Engineering Pvt. Ltd. to build its sugar milling unit's 100,000-litre a day ethanol plant, according to Dow Jones. Roxas Holdings didn't disclose financial details of the deal, which is scheduled to be signed later Friday. Earlier this year, CADP Group Corp., Roxas Holdings' sugar milling and refining unit, had estimated that building the ethanol plant would cost around PHP1.2 billion (US$26.8 million). The ethanol plant is scheduled to start operating next year. The passage of the country's Biofuels Act, which requires the blending of ethanol and biodiesel with oil-based fuel, has spurred investments in ethanol plants.
ED&F Man thinks Brazilian millers will start producing sugar rather than ethanol because of forecasts for improved weather throughout the rest of the harvest season, according to Reuters. "Despite the wet weather in April/May the indication is for normal winter dry weather to return over the remainder of the crop which will facilitate higher sugar recovery and hence sugar production," ED&F Man said in its latest monthly report It also said sugar storage could become an issue by October or November.
