Recently in Government Category

It's always nice to hear our tax money going to something (hopefully) useful.

This one is a $24m grant from the US Department of Energy (DOE) and Department of Agriculture (USDA) being given to companies that are develop technologies to produce biofuels, bioenergy and high-value biobased products using biomass as feedstock.

The awardees must contribute a minimum of 20% of matching funds for R&D projects and 50% of matching funds for demonstration projects. For biobased products and biofuels development, companies selected include GE Global Research, Gevo, Itaconix, Yenkin-Majestic Paint Corporation, and Velocys.

Gevo, which was awarded $1.8m, said that this grant will help fund ongoing development of its yeast strain to produce biobutanol from cellulosic biomass. The company started up its biobutanol demonstration plant - said to be the first in the world, last September. The facility was designed from retrofitting an existing demonstration scale ethanol plant to produce biobutanol.

Itaconix, meanwhile, aims to produce green polymers from itaconic acid fermented with sugars extracted from hardwood biomass. Their product polyitaconic acid is a water soluble polymer, said to have a 2 million ton/year market potential as a replacement for petrochemical dispersants, detergents, and super-absorbents.

Other awardees include Exelus, which aims to develop a Biomass-to-Gasoline (BTG) technology; and universities such as University of Tennessee (working on switchgrass), Oklahoma State University, University of Minnesota, and Purdue University.

Energy crop company Ceres also won a separate grant ($5m) from the DOE to develop high-yielding, low-input energy grasses. The company aims to expand an advanced trait development project to increase biomass yields of several energy grasses by as much as 40%, and at the same time decreasing the use of inputs such as nitrogen fertilizers.

This "amazing grass" could displace 1.3 billion barrels of oil and 58 million tons of coal over a ten year period, according to Ceres.

Thanks to the Green Underworld Reporter for sending this information about Elevance Renewable Sciences in a proposed joint venture with biodiesel producer Renewable Energy Group (REG) to build a 2.6m gallon/year demo-scale integrated biorefinery in Newton, Iowa.

In an application filed by Elevance late last month to the Iowa Dept. of Economic Development (IDED) for funding assistance, the company said the proposed biorefinery will convert renewable raw materials primarily sourced from Iowa such as soybean oil, ethanol DDG corn oil, animal fats, algae oil and other emerging oils, into olefins, fuels and specialty chemicals.

About 15-16 million pounds/year of vegetable oil feedstock could be used to operate the proposed facility at 90% capacity. According to Elevance, success of the demo plant will enable the company to retrofit existing biodiesel facilities in Iowa with a fully diversified biorefinery.

REG is expected to provide their existing biodiesel production plant in Newton for the biorefinery location as well as provide their experiences in raw material sourcing/transportation/handling, and in constructing novel, continuous flow operating systems.

REG's experience in fuel and glycerin marketing and logistics will also come in handy, the company said.

Elevance is seeking $800,000 in financial assistance from the IDED and another $2.67 million from the Iowa Power Fund to contribute to the $8.7m estimated cost of the project through 2011. The rest will be funded by the company.

According to the filing, the project is estimated to create around 40-60 full time jobs in 2010 for engineering construction, site preparation and installation. The project will create 7 permanent jobs when the biorefinery starts around 4th quarter of 2010. Full operating capacity is expected in 2012.

Elevance said the company is actively considering locations outside Iowa such as Illinois, Washinigton, Texas and Louisiana, if the project will not proceed in Iowa.

European manufacturers of tall oil fatty acids (TOFA) - a chemical produced from the byproduct of the pulp and paper manufacture, are hoping to have the product exempted from Europe's chemical regulation REACH (registration, evaluation, authorization and restriction of chemical substances).

The Hydrocarbon Resins, Rosin Resins and Pine Chemicals Producers Association (HARRPA) said that TOFA and certain salts should be exempted based on their interpretation of the REACH text. Manufacturers involved in this petition include Arizona Chemical, DRT, Forchem and Kemira. Their arguments include:

• That TOFA is naturally-sourced

• That TOFA is not chemically modified

• It is not included in REACH's dangerous substance list

• It is a natural fatty acid

The first high-volume products, whether produced in the EU or imported into the region, have to be registered by 1 December 2010.

A study* from John Hopkins University estimated that animal testing of substances registered under REACH will cost $13.6bn (€9.5bn) over the next ten years, rather than the $2.3bn estimated by the EU when the programme was drafted.

One thing to note is that it will sure make it easier for chemical companies (and their customers) to overcome this kind of legislation if their products are based on renewable feedstock or already incorporating green chemistry principles.

*Subscription required

[Image of TOFA from University of Arkansas, Fayetteville]

I guess pesticide is the topic for this week after reporting about carbofuran. This time, the US Environmental Protection Agency (EPA) is proposing a new pesticide labeling to reduce off-target spray and dust drift. The agency is also requesting comments on a petition to evaluate children's exposure to pesticide drift.

The new labels will have uniform and specific directions on restricting spray drift as well as prohibit drift that could cause health or environmental effects. Examples of guidelines could include no spray buffer zones, restrictions on droplet or particle size, nozzle height, weather conditions, etc.

The agency is also taking other actions to reduce drift problems such as developing a new voluntary program called Drift Reduction Technology (DRT) programs that encourages development, marketing and use of application technologies to significantly reduce spray drift; developing information on best management practices (BMPs) to reduce off-target drift for specific application methods; education and training programs on drift management; and examine scientific issues associated with field volatilization of pesticides.

As far as DRT program is concern, the EPA plans for that program to be operative by 2010.

The green blog has been covering the carbofuran issue ever since the US Environmental Protection Agency (EPA) decided in 2008 to cancel the pesticide's registration because of concern for its health safety.

Carbofuran is an N-methyl carbamate insecticide and nematicide that has been registered to control pests in soil and on leaves in a variety of field, fruit, and vegetable crops.

In October 30, the EPA finally decided to implement its final rule to ban the pesticide and said that farmers who use the product should switch to safer alternatives instead. The carbofuran ban will start after December 31, 2009.

"EPA has carefully evaluated the scientific issues and has provided more than 500 days of public comment on this decision. It is now important to move forward with the needed public health protections, especially for children."

The EPA said the objections and science arguments presented were flawed and FMC's proposed amendments to the carbofuran registration is said to be insufficient.

FMC and the three commodity crop associations plan to take legal action against the EPA's decision in a federal court. FMC said the EPA's attempt to link carbofuran food residues to symptoms of potential poisoning in children is unwarranted.

"EPA's unprecedented attempt to deny any review of its science deprives the registrant and the growers who use carbofuran the right to prove that the product is safe, and represents a bold abuse of power in contradiction of the agency's earlier commitments to transparency and good science," said Dr. Michael Morelli, Director of Global Regulatory Affairs, FMC Agricultural Products Group.

Pine chemical company Arizona Chemical is complaining about the possibility of losing their black liquor-based feedstock because of the federal tax credit that are being given to pulp mills who mix black liquor with diesel and burn them as fuel for their operations.

Black liquor, by the way, is a liquid byproduct you get at a paper mill when wood is turned into pulp. Pine chemical companies rely on these byproducts such as black liquor soap/crude tall oil and crude sulphate turpentine as feedstocks to make renewable-based chemicals.

Arizona Chemicals noted that burning black liquor for biofuels could lead to plant closings across the pine chemicals industry and increased imports of replacement products, which are primarily made of non-renewable petroleum sources.

Pulp and paper mills have long used black liquor as an occasional fuel source, according to the paper industry. But with the 2007 biofuel tax credit legislation, Kraft paper mills who were already using the natural black liquor could now add as little as 0.1 percent of diesel to the fuel mixture and they could qualify for a tax credit.

Recent earnings report from major pulp and paper companies such as International Paper (IP), Weyerhaeuser, and Domtar revealed big federal tax credit gains from these operations.

In the third quarter this year, IP reported a $525 million pre-tax credit ($320 million after taxes) for alternative fuel mixture credits in addition to the $482 million pre-tax credit ($294 million after taxes) gained in the second quarter.

IP received its first biofuel tax credit check from the Internal Revenue Service in March this year with an amount of $71.6 million. The company produced (and used) the alternative fuel mixture at 15 of its mills for the period of November 14 to December 14, 2008.

Third quarter earnings also saw biofuel tax credit profits for Weyerhaeuser amounting to $74 million while Canada-based Domtar's profits impressively jumped in the third quarter mostly thanks to a $159-million federal biofuel tax credit (which came to $116-million after tax).

Domtar was able to earn (before tax) $131m in the second quarter and $46m in the first quarter from the tax credits alone.

I found this intriguing blog called "Dead Tree Edition" talking about this issue and the author of blog estimated that US kraft pulp mills could could generate $50 billion in tax credits before it expires at the end of 2012.

That is one heck of a big tax credit although it makes sense seeing that International Paper alone is on track to earn nearly $2 billion in alternative fuel mixture credits this year. The company paid less than $200 million in U.S. income taxes last year and had less than $400 million in earnings during the first half of this year, according to the blog's author.

Even paper company Marcal is calling on Congress to eliminate the credit stating potential further deforestation "under the guise of alternative fuel production." Marcal's paper products are mostly recycled-based, the company assures.

"Organizations across industries are scrambling for bailouts for survival, yet many paper manufacturers are taking advantage of taxpayers' dollars and are being rewarded with a bonus for pillaging our forests." - Marcal

The UK's Department for Environment, Food and Rural Affairs (DEFRA) is considering the ban of inorganic phosphates in domestic laundry cleaning products (DLCPs) and is soliciting comments about it since October 22 up until January 21, 2010.

According to DEFRA, a regulatory ban is needed to reduce phosphorus pollution in the UK's water system as well as reduce the energy and chemicals used by the water industry to remove phosphorus from sewage effluent. Domestic laundry cleaning products are said to contribute 3-4% of phosphorus pollution load to the freshwater environment in the UK and Wales.

The plan is to ban on sales of all DLCPs containing more than 0.4% phosphorus by 2015. Estimated costs of the ban, which will affect manufacturers and their customers who will bear the costs of the change, are around £5-8 million/year ($8-13m/year) within 15-year period and a one time cost of £10-15 million for the transition.

Water companies, however, will be able to save a total cost (in 15-year time frame) of around £59-123 million. There is of course the environmental benefits of not having phosphorus in the water system, according to DEFRA.

The group estimates 41,600 tonnes of phosphorus is discharged to England, Wales and Scotland's water environment each year. DEFRA estimates phosphates from household products account for 61% of the phosphorus discharged; 28% from agriculture; 5% from industry and 6% from other sources.

For phosphate updates in the US, check out my posts from the AOCS conference in May.

One of the issues hotly debated in the ICIS oleochemicals conference that I attended last week in Berlin is the sustainability of palm oil. Palm oil and palm kernel oil account for majority of oleochemical feedstock used most especially in Southeast Asia.

Non-government organizations such as Friends of the Earth and GreenPeace have increasingly sounded the alarm on the unsustainability of palm oil stating fast deforestation in Southeast Asia especially Indonesia to make way for palm plantations.

One speaker from a biofuel/oleochemical producer in Belgium noted the tightening scrutiny of European Union officials in the use of palm oil and derivatives for food, biofuel and chemical production in Europe because of NGO reports of the unsustainability of palm oil. I thought I heard him mention that European regulators might even use Google map to check if palm producers are properly using land for their plantations (such as not destroying forest or using peatlands). Hmmmm.

To counteract the growing negativity of palm oil production, producers and consumers of palm oil have organized the Round table on Sustainable Palm Oil (RSPO) association and one of their goal is to form a certification proving that their palm oil products are sustainable.

Unfortunately, a recent news from the Guardian caught my attention (hence this blog post) about RSPO members having issues on setting up their sustainability standards. The problem is including calculations of greenhouse gas emissions (including emissions from land use) in their standards. Some RSPO members especially palm plantation owners are reportedly against this idea. They reasoned out that the economic and social benefits of palm oil are being eclipsed by environmental issues associated to the industry.

Palm oil, by the way, is not the only biofuel feedstock that could be affected by potential greenhouse gas emissions regulations being mulled by various governments worldwide.

Presenters at the ICIS oleochemicals conference also talked about the possible effects (especially in the US) of the new Renewable Fuel Standards (RFS2) being proposed by the US Environmental Protection Agency (EPA). Under RFS2, renewable fuels must reduce GHG emissions by 50% compared with the conventional diesel they are replacing. It must also take into account indirect emissions such as land use.

The US biodiesel industry states that soybean oil-based biodiesel will not be able to meet the EPA's 50% requirement and therefore would restrict most of biodiesel feedstock to animal fats and restaurant grease.

California's Department of Toxic Substances Control (DTSC) believes green chemistry will wipe away the problem of trash in the ocean as seen in this promotional video.

DTSC via its Green Chemistry Initiative program is currently developing a "Safer Alternative Regulations" that will establish a process to identify and prioritize chemicals of concern in consumer products, and a process to evaluate safer alternatives. Comments and reviews regarding the current proposed regulation is being considered, the DTSC said.

Thanks to the Green Underworld Reporter about this green tech company called Itaconix that I have not encountered before.

Based in Hampton Falls, New Hampshire, Itaconix (and its partners Microbia Inc. and the University of Maine) recently received a $1.8m grant from the US Department of Agriculture and Department of Energy to produce green polymers from itaconic acid fermented with sugars extracted from hardwood biomass.

Itaconix just introduced this year its polyitaconic acid-based product line Itaconix Super Absorbent and Itaconix Dispersant, which is produced from fermented itaconic acid with corn glucose as feedstock. With the grant, the company hopes to use waste biomass and lignocellulosic instead of corn as feedstock.

"The research possible through this biomass initiative offers another major step toward sustainability and away from petroleum dependence by allowing us to use biomass wood and not divert corn away from food uses," said John R. Shaw, principal of Itaconix.

According to the USDA, polyitaconic acid (PIA) is a water soluble polymer with a wide range of applications including superabsorbents (SAP), anti-scaling agents in water treatments, co-builders in detergents, and dispersants for minerals in coatings.

Itaconic acid was identified as one of the top 12 value added chemicals from biomass in 2004 by the DOE but its polymerization was identified as a key barrier to commercial development. This technical barrier was said to have been overcome by the University of Hampshire researchers which licensed the technology to Itaconix.

PIA is said to be an attractive replacement to the well established petroleum-based polyacrylic acid. According to Itaconix, potential global market for PIA is 1.65m metric tons/year with SAP occupying 67% of the market; 3% adhesives, 9% dispersants; 6% water treatment; 11% detergents; and 4% for new SAP markets.

In order to displace polyacrylic acid, Itaconix said it must reach a production cost below $1.5/Kg using biomass feedstock. PIA has been produced by Itaconix using commercial itaconic acid obtained by the fermentation of dextrose typically derived from corn or rice. Under such non integrated structure, PIA can be produced at a cost of $3/Kg.