Europe biodiesel players fear effects of US plant

06 June 2008 15:52  [Source: ICIS news]

By Ben Lefebvre

 

LONDON (ICIS news)--With the largest biodiesel refinery in the US now open for business, some European market players are hoping the new material takes its time crossing the Atlantic as they fear it may have a further negative impact on prices.

 

With a recent run up in new US biodiesel plants - some of which receive government subsidies - several European sellers feared prices could be pushed down further.

 

“Europe is not waiting for exports,” said one producer. “Our own industry is an injured industry, with B99 coming in below profitable prices.”

 

GreenHunter Energy, based in Grapevine, Texas, officially started commercial operations at its 105m gallon/year biodiesel plant in Houston on Monday.

 

At the plant’s opening ceremony, US Energy Department Deputy Secretary Jeffrey Krupfer called the new refinery “important, not only to the city of Houston and the great state of Texas, but also to the nation and the world”.

 

Fatty acid methyl ester prices were assessed at $1,510-1,560/tonne (€966-998/tonne) FOB (free on board) Rotterdam on Wednesday, down by an average of $35/tonne from the week before, according to global chemical market intelligence service ICIS pricing.

 

GreenHunter representatives were not available to discuss how much of what its new $70m plant produces might be targeted toward the export market but information on the company’s website indicated it was looking to Asia as a potential growth market.

 

US biodiesel producers depend on overseas buyers to offset a domestic market that is less undeveloped by comparison.

 

The Houston refinery, which the company advertised as being emission free, could produce high-purity “water-white” biodiesel using feedstocks of 100% animal fat, 100% vegetable fats or a blend of the two, the company said.

 

The US was on track to produce 550m gallons in its fiscal 2008, up by more than 20% from 450m gallons the year before, according to the US National Biodiesel Board.

 

There are nearly 110 biodiesel refineries running in the US now, although some have cut back production or closed due to a recent run up in soybean prices, and more are in the planning stages.  

 

Besides biodiesel production, the new $70m facility includes a 200m lb/year glycerine distillation system, a 45,000 bbl/month methanol distillation tower and 700,000 bbl terminal operation.

GreenHunter, a publicly traded company with market capitalisation of $420m, has been expanding its strategy to include various renewable energy projects. Prior to 2007 it worked solely in developing wind-energy power plants but last year it started developing a bio-massed powered electric plant in California. In May, it announced plans to eventually enter the solar and geothermal energy markets.

 

($1 = €0.64)

 

Bookmark Simon Robinson’s Big Biofuels Blog for some independent thinking on biofuels

For more information on biodiesel, glycerine and methanol visit ICIS chemical intelligence

 

 

 

 

By: Ben Lefebvre
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