The Big Biofuels Blog

Bioenger G has opend a website mainly aimed at UK farmers who don't want to sell their oil seeds or oil  just to the big buyers.

The Chicago Board of Trade (CBOT) will be offering mini-sized Agricultural Futures for people who want to trade smaller lots electronically from 14 May 2007.

Over on Biodiesel BioDieselSpain.com, they have stumbled upon an excellent source of cheap biodiesl that Brazil has in abundance: Bovine tallow, could that be Brazil's secret biodiesel weapon? It looks cheap enough.

The post is in Spanish, thanks to Babelfish

What is the price of addiction? There's an interesting counter over on allegrobiodiesel's site which claims to show how much the US is spending on imported fossil fuel. It's rather jolly to watch the numbers zoom past, but when did they start the clock. I think we should be told.

If you're dabbling or playing seriously in the Chicago Board of Trade Mini corn and wheat futures, you can see what the market's doing at no charge and live.

Brazil launched a futures contract for anhydrous ethanol on its Mercantile and Futures Exchange. The announcement was made on 24 April and the aim is to give producers and investors a chance of some certainty in the market in the future.

According to my friend, William Lemos, writing for ICIS news in Houston, Texas :

The new anhydrous contract is quoted in US dollars, and it debuted on Friday on Brazil's futures exchange (BM&F) at $396/cubic metre (cbm). The contract ended on Tuesday 5.3% lower at $375/cbm.

(Disclosure: I work for ICIS: About ICIS)

George Soros, who among other things, has a stake in the Brazilian Ethanol industry, wants the tariffs on ethanol from that country into the US and also Europe (something I didn't know about and will investigate) lifted, according to Domestic Fuel.

EU opens distillation tender to convert unwanted wine into industrial ethanol, according to the Turkish Daily News.
The distillation will help take excessive wine off the market and support prices in Europe.
As I said in July, this is not a satisfactory state of affairs, why can't the market operate and to help people pay a fair price for wine. The EU will be looking at the structure of the wine market later this year, according to the daily news... Lets hope the EU devises a solution that will benefit both the farmers and the consumers.

There's been a potentially big biofuels win for Brazil's President Lula, reported on Biopact.

The Swedish government has signed a biofuel cooperation agreement with Brazil and will remove its heavy import tax on ethanol produced in the South. The move is seen as a way to push EU member states to do the same. Both governments will also work together to help African countries become biofuel producers who can supply global markets. Sweden is thus creating the kernel of a genuine 'biopact'

If this pressure works, and its easy to see why Sweden could make such a deal -- minimal sugar beet and probably about enough grain to feed itself. What is important here is the pressure that the Sweeds will bring to the rest of the European Union. I don't think that it will be enough on its own to bring the trade bloc's tariff walls tumbling down. I think we can expect pretty stiff opositon from the French, British and German farming lobbies as well as the sugar resellers and producers. But once again the Sweeds with with an ethical foreign policy that has the potential to help some of the poorest farmers in the world raise their standards of living.

The Chicago Board of Trade has altered the way it deals with ethanol, slightly. In a release on Monday it said:

Ethanol futures have been trading at the CBOT, now part of the CME Group, since March 2005. The Ethanol futures prices will be used in the settlement of both the options on Ethanol futures and the cash-settled options. Forward Month Ethanol Swaps, launched in December 2006, will serve as the underlying value for those options.

I like this analysis of the US ethanol from corn market as it now stands and Geoffrey Styles, proposal for a smarter ethanol policy for the US. Styles points out that after 25 years' of subsidies the US ethanol market is not economically viable.

He says there is a strong case for

shifting the focus of the ethanol portion of US energy policy--and agricultural policy. Considering all the above factors, I believe a wiser ethanol policy would consist of the following:

1. Freezing the federal RFS at the current level of 7.5 billion gallons per year.

2. Phasing out all subsidies for ethanol derived from food sources within five years.

3. Phasing out the tariff on imported ethanol within two years.

4. Shifting the point of subsidy from the blender to the ethanol plant, to ensure that future subsidies go to US producers, rather than offshore.

5. Increasing the subsidy on cellulosic ethanol to $1.00/gallon until 2010, falling by 10 cents per gallon per year thereafter.

Such a program would focus federal incentives where they will do the most good, promoting the commercialization of cellulosic ethanol, which offers much larger energy and emissions-reduction benefits than corn ethanol and entails fewer concerns about sustainability.

I particularly like his proposal for the end of subsidies on ethanol from food sources and the end to protective tariffs. I guess there would need to be support for cellulose production in the short therm and I'd argue for it to be phased out over 3-5 years after commercial production starts.

Since cellulosic ethanol is expected to be cheaper to produce, once it achieves economies of scale, it should not require permanent subsidies or tariff protection, as corn ethanol has. The result would be a very tough market for current ethanol producers, but it would ensure that the ethanol we use as an oil substitute is produced as efficiently as possible, without merely substituting LNG imports for oil imports

It would also allow corn to be used for what it is best for Food. He asks an unanswerable question which points up the difficulties that the US renewable fuel industry faces.

Whether or not something like this could ever be enacted by the US Congress, this is where the debate should focus, rather than on arguing about expanding an inefficient program by a factor of five.

Of course, there's no debate about fuel efficiency or what the price of any of this fuel will be in the future...

The US looks set to tax imports on the basis of the amount of carbon that they contain, according to Paul Hodges in Chemicals and the Economy. Paul is pretty focused on chemicals, but clearly coal would be pretty heavily taxed, but the so should crude oil and possibly ethanol. It will be interesting to see how imports of those two commodities fair under the new proposal.

Splash dash and a lot of biodiesel pain European Biofuel producers are considering legal action through the European Commission to halt they see as US biofuel producers dumping biofuel within the EU. Exports from the US gain

Oh no, the Brazilains are coming, and they're going to inundate the US with 700m gal of ethanol in 2008, according to my pal William Lemos, reporting for ICIS news in Houston.

(Disclosure: I work for ICIS. About ICIS)

The sneaky Brazilians are going to do it by importing via Caribbean countries so the imports will be free of the 54cent/gal tariff that they would attract if they came directly from Sao Paulo. Lets get this in perspective: in 2006, the US used 179 100million gallons of gas in 2005. This will be coming in at the margin, but it is unlikely to destabilise the US corn-based, subsidy-driven ethanol market which produced around 5000 m gallons of ethanol in 2006, any more than the rising price of corn.

http://www.icis.com/Articles/2008/01/18/9094209/brazil-to-inundate-us-with-cbi-ethanol-in-2009.html

The European Biodiesel board is worried enough about the US exports of biodiesl to the Europe to start drafting a complaint to the World Trade Organisation about it, and warned the US National Biodisel Board meeting in Orlando, Florida that US biodiesel exports to the EU threaten global biodiesel industry.

Hattip to Stephen Burns, a colleague on ICIS news.

The leaders also discussed ethanol production, which Obama acknowledged had been "a source of tension between the two countries."

The US slaps a tariff of US$ 0.14 per litre (US$ 0.54 per gallon) on imports of biofuels, a measure that critics say is a protectionist tactic intended to tilt the playing field in favour of US corn producers. Last summer, Brazil threatened to challenge the tariff at the WTO's Dispute Settlement Body (see Bridges Weekly, 4 September 2008, http://ictsd.net/i/news/bridgesweekly/27688/). But no official complaint has been filed.
 
"It's not going to change overnight, but I do think that as we continue to build exchanges of ideas, commerce, trade around the issue of biodiesel, that over time this source of tension can get resolved," Obama said.
 
The US is the world's largest producer of the biofuel, while Brazil is the largest exporter.