Ethanol prices plunge 3.6% in latest week

Peter Ngo

        Ethanol rack prices took a substantial dive. All tracked spot locations fell by at least 7¢, with the Gulf Coast drop-off less dramatic but East and West coastal markets even weaker.

        Early in the week, dealers reported that they were still seeing strong buying activity at terminal locations, prodded by record corn and oil prices. But by Thursday, ethanol prices had fallen 3.6% – in a marked separation from both historical anchors.

        The market has already been factoring in reduced corn production, a market source said, but prices could re-align after traders digest Tuesday's USDA Prospective Plantings report.

        Much of the decline in overall prices stemmed from a fall in Midwest racks, which were about 9 to 11¢ a gallon lower on the week to about $2.38 to $2.39 a gallon.

        The national average declined 9¢, to $2.43 a gallon, or 3.6%, according to data tracked by Ethanol & Biodiesel News, putting prices at near-March levels.

        There was renewed speculation from observers that blending was inching closer to saturation, including a note from Antoine Halff, an analyst at brokerage firm Newedge.

        In the East Coast, more than 92% of the gasoline produced in March contained ethanol, meaning there isn’t much more room to blend in more, Halff said. The same goes for the Midwest, where more than 82% of gasoline production in the same month contained ethanol.

        About the only place that has room to significantly boost the amount of ethanol in its gasoline pool is the Gulf Coast, where only 14% of gasoline production contains ethanol, Halff said.

        Still, much of the gasoline produced in the Gulf Coast is then shipped to other parts in the country, Halff said.

        Ethanol futures on the Chicago Board of Trade were higher Monday. July ethanol, the near month, was up $0.007, to $2.458 per gallon, and December ethanol was up $0.018, to $2.508.

Record-high feedstock prices point to unprecedented margin pressure

Peter Ngo

        Ethanol producers are bracing for record-high feedstock prices after July corn surged to a new trading record of $6.6725/bushel Monday on the Chicago Board of Trade.

        Heavy rains, severe winds and tornadoes throughout the Midwest have propelled corn futures to their third straight record session.

        Meantime, the U.S. Department of Agriculture said Tuesday it expects the 2008/09 marketing-year average farm price for corn at 30¢ higher on both ends of the range, at $5.30 to $6.30 per bushel.

        Farmers are experiencing the worst weather they have seen since 1993, when U.S. crops suffered from weeks of rain that eventually led to the severe flooding of the Mississippi river. Agriculture Secretary Ed Shafer said he had "a lot of concern" for the corn crop at last week’s Rome summit meeting on the global food crisis.

        On top of that, this season's U.S. corn crop was planted late because of heavy rain and emerged from the ground later than in past years, which could lead to mid-summer heat damage and lower yields.

        USDA said Tuesday it expects the season's corn crop is projected at 11.7 billion bushels, down 390 million from last month based on lower expected yields.

        "This month's reduction reflects slow planting progress, slow crop emergence, and persistent, heavy rainfall across the Corn Belt," USDA said in its report Tuesday, "The latest rounds of torrential rainfall are expected to reduce plant populations and nitrogen availability, particularly for corn planted after mid-May.”

        Corn supplies for 2008/09 are projected 340 million bushels lower this month, though partly offsetting lower production is a 50 million-bushel increase in beginning stocks resulting from lower projected 2007/08 exports.

        The excessive wet weather also propped up world soybean prices. But news that an Argentine farmer strike may be ending countered that support and weighed on soy futures. The farm strike in Argentina, the world's third-largest soy exporter after the U.S. and Brazil, had been shifting soy export business to the U.S.

        News that Russia may act as a donor country to meet food needs around the world – according to comments by World Bank Managing Director Ngozi Okonjo-Iweala at the 12th St. Petersburg Economic Forum last week – may also help to mitigate prices.

        In its report Tuesday, USDA left its predictions for soybean production and trade unchanged, but reduced crush to 10 million bushels, mainly reflecting reduced prospects for domestic soybean meal use.

        Soybean ending stocks for 2008/09 were projected at 175 million bushels, down 10 million from last month.

        Based on high soybean oil prices that have reduced the soybean oil share of total biodiesel production "more quickly than expected," USDA reduced its projections specifically as well on soybean oil used for biodiesel production for both this year and next year.

        Soybean prices for 2008/09 were subsequently all raised. The U.S. season-average soybean price is projected at $11.00 to $12.50 per bushel, up 50¢ on both ends of the range.

Seed biotech promises to double feedstock yields by 2030, says Monsanto

Peter Ngo

        Both ethanol and biodiesel producers perked up when the CEO of Monsanto, the leading producer of genetically engineered seed, pledged last week to develop seeds that would double the yields of corn and soybeans and cut water, land and energy requirements by 30% worldwide.

        Chief Executive Hugh Grant announced the initiative during a company meeting, indicating that the company's research and development team has been developing crops that are increasingly resistant to drought and pests.

        "If we succeed in doubling yields, it absolutely changes the opportunity for food availability," Grant said, referring to rising food prices and growing food shortages that led to last week's U.N. summit meeting in Rome.

        "We believe that it’s possible to double corn yields in the United States by 2030 to 300 bushels per acre," said Brett D. Begemann, Executive VP at St. Louis, MO.-based Monsanto at a Merrill Lynch analyst conference on Wednesday.

        Monsanto, whose development of genetically engineered seeds has often made it a target of controversy, said it made the commitment after consulting farmers, political leaders, academics and advocacy groups as to what’s needed to be done to increase food production in an environmentally conscious manner.

        Monsanto said a new technique called marker-assisted selection, which does not involve altering crops by putting in foreign genes, could double the rate of yield gain made from breeding. That technique uses genetic tests to help choose which plants to use in conventional cross-breeding.

        At the Merrill Lynch conference, Begemann indicated that yield increases could also come through the company's existing genetics and triple-stack corn, as well as its insect-protection and weed control seed trait platform called SmartStax, "which is right around the corner."         

        "We are building the [SmartStax] seed already today. We planted some of it in the field this year to start building the seed supply that we’ll have for an estimated launch of SmartStax in 2010."

        As for soybeans, Monsanto says it has a number of lines growing this year across the Midwest. Begemann said that seed companies are working with Monsanto to distribute its higher-yielding Roundup Ready 2 Yield soybeans.

        "By 2010, when we reach the first year of true commercial launch, we’ll have 5 to 6 million units of soybeans available with some 200 companies working with us," Begemann said.

GreenHunter Energy opens largest biodiesel plant in U.S.

Peter Ngo

        GreenHunter Energy opened last week the largest-capacity biodiesel plant in the U.S., a 105 million gallon facility in Houston.

        In light of the ongoing controversy over high food prices, the Grapevine, Texas company has designed the plant to be “feedstock agnostic”, meaning that it can use 100% animal fats, 100% vegetable oils, or any combination of the two.

        The first rail shipments of animal fats to the refinery and storage facilities will be processed under a tolling arrangement beginning in June.

        "We now have the opportunity to participate in our country's goal of reducing its continued dependence on foreign crude oil supplies," said GreenHunter chief executive Gary Evans.

        The new plant, whose capacity just edges out the Imperium Renewables 100 million gallon nameplate being built in Grays Harbor, Wash., was once a waste-oil refinery along the Houston Ship Channel. GreenHunter acquired the 20 acre site from Channel Refining last year with an eye toward taking advantage of the location's on-site access to barge, rail and truck shipping.

        Company officials are also hoping to take advantage of byproducts and complementary products of biodiesel production to help offset the vagaries of biodiesel economics, which is contending with high input costs as well as an uncertain demand outlook in both the U.S. and Europe.

        In addition to biodiesel production, the new facility houses a 700,000 barrel bulk liquid terminal operation, a 200 million pound-per-year glycerin distillation system, and a 45,000 barrel-per-month methanol distillation tower.

        What's more, GreenHunter plans to generate enough electricity at the new plant to sell surplus power back to the grid.

        Some other cost savings are built in. GreenHunter BioFuels, Inc., a wholly-owned subsidiary of GreenHunter Energy, has signed a two-year biodiesel toll processing agreement with a third party specifically related to the company's new biodiesel refinery located at the GreenHunter Renewable Fuels Campus in Houston, Texas.

        Texas Gov. Rick Perry and other state officials were on hand for the plant's grand opening Tuesday morning. Perry, who has petitioned the U.S. EPA for a one-year reprieve from federal ethanol blend mandates, is gangbusters for biodiesel, which does not compete for resources with the state's crucial livestock industries.

        "In the same way that Texas set the pace in petroleum production and refining, we are now leading the way into a new era of renewable energy production which will move us closer to independence from foreign oil," Perry said in a statement accompanying the opening ceremony.

        In addition to the new biodiesel plant, GreenHunter's assets consist of leases of real property for future development of wind energy projects located in New Mexico and California, and a biomass power plant located in El Centro, Calif.

San Francisco to build first-ever yellow/brown grease biodiesel facility

Peter Ngo

        Biodiesel feedstock innovation apparently does not always come from the private sector. The city of San Francisco is publicly funding the construction of a first-of-its-kind biodiesel plant that will be fed entirely by both yellow and brown waste grease.

        The San Francisco Public Utilities Commission has issued the development a $1 million grant in a plan that would recycle both restaurant fryer grease and brown grease, a lower-quality feedstock for making biodiesel made up of pan scrapings and trappings under restaurant sinks.

        The new facility will be located at the Oceanside Sewage Treatment Plant. The city ultimately wants to create a closed loop where all restaurant grease is recycled for powering the city's fleet of biodiesel trucks.

        The benefit would be more apparent for the much more ubiquitous brown grease, which is typically discarded at sewage treatment plants. Sewage treatment plants account for 3% of the nation’s electrical consumption, said SFPUC General Manager Ed Harrington.

        According to the San Francisco Public Utilities Commission, the city produces about 2.5 million gallons of brown grease annually, versus 1.5 million gallons of yellow grease.

        “Our program to turn waste cooking oil and yellow grease into biodiesel has been an enormous success, but San Francisco must continue to raise the bar when it comes to reducing our greenhouse gas emissions and exploring alternative energies,” said San Francisco Mayor Gavin Newsom.

“With [last week’s $1 million] grant, our unique brown-grease-to-biodiesel plant will break new ground for sustainable fuel production in California and serve as a model for the entire state.”

Energy bills blocked from U.S. Senate floor

Peter Haldis

Two U.S. Senate bills claiming to respond to record prices for oil and petroleum products failed to make it through cloture votes Tuesday morning, effectively killing the bills before they could be debated and voted upon.

One bill, the Consumer-First Energy Act (S. 3044), would have enacted new taxes on oil companies and increased federal oversight of energy futures trading.

The other, the Renewable Energy and Job Creation Act (H.R. 6049), would have extended $27 billion of expiring temporary tax provisions, including research and development credits, special rules for active financing income, and state and local sales tax deductions.

S. 3044 received 51 votes for and 43 votes against, while the vote for H.R. 6049 was 50-44. The bills needed 60 votes in order to invoke cloture and be brought to the Senate floor.

One bill would have placed a tax on any “unreasonable” profits for any “major integrated oil company.”

It would have also given the U.S. Federal Trade Commission (FTC) the authority to penalize companies for “price gouging” on oil and gasoline sales. The legislation specifically gives the FTC the authority to penalize those companies with sales of at least $500 million, though it does not exclude companies that have lower sales.

Additionally, the bill would have enabled the U.S. Department of Justice to bring price fixing charges against OPEC members.

Frost & Sullivan: biofuel industry revenues to double by 2012

Peter Ngo

        North American biofuel industry revenues will double by 2012 if latest forecasts from Frost & Sullivan are on the mark. According to the consulting firm, North American producer revenues would hit $18.52 billion by 2012, almost double the $9.98 billion for 2007.

        In its report, “North American Biofuels Market: Investment Analysis,” Palo Alto-based Frost & Sullivan says that regulatory support, coupled with the need to address the geopolitical risk posed by relying on the Middle East and Venezuela, is driving the growth of the North American biofuels market.

        Though negative association with escalating food prices remains a major concern, biofuels enjoy many inherent advantages such as regulatory, infrastructural, environmental, geopolitical, and agricultural support. The North American market has adopted strategies such as improving crop yield, tie-ups with the developing world, and focusing on alternative feedstocks.

        Moreover, given the high feedstock prices for first-generation biofuels, next-generation biofuels have garnered increased attention and will likely be commercialized after 2012, according to the report.

        In the meantime, the expanded Renewable Fuel Standard, Volumetric 'Blender' Tax Credit, Small Agri-biodiesel Producer Tax Credit, and Alternative Fuel Refueling Infrastructure Tax Credit provide the necessary regulatory support for the North American biofuels industry, the report points out.

        The report also notes there is a strong venture capital investment climate in next-generation biofuels, which are expected to be more efficient. Such biofuels would tap algae, waste, straw, wood, and other forest-based inputs, some of which could be found in abundance in the United States.

        Currently, U.S. dependence on foreign oil continues to increase, and costs approximately $1 billion per day. Oil from Venezuela and the Persian Gulf accounted for 26.3% of the total oil imports in 2007.

        By 2012, biofuels are expected to account for 15.2 billion gallons of the total motor fuel source in the United States, up from an estimated 9 billion gallons in 2008.

Bill to cut ethanol import tariff introduced in Senate

Peter Ngo

        U.S. Sens. Dianne Feinstein (D–Calif.), and Judd Gregg (R–N.H.), introduced legislation last week to lower the import tariff on ethanol.

        The bill would cut import tariffs to 45¢ per gallon from the current level of 54¢ per gallon, bringing the tariff in line with the newly lowered subsidy under the recently enacted farm bill.

        If passed, the legislation would allow U.S. refiners to purchase cheaper ethanol from foreign sources,” which could then help lower gas prices at the pump," Feinstein's office said.

         Brazilian production costs for sugar-based ethanol are at 81¢ per gallon, while domestic ethanol production costs are currently above $2 per gallon, according to the U.S. Department of Agriculture.

         Furthermore, the California Energy Commission recently estimated that the greenhouse emissions from Brazilian sugar-based ethanol were 68% lower than traditional gasoline, compared to domestic corn-based ethanol, which produces about 15 to 28% fewer greenhouse emissions than traditional gasoline.

        The measure, endorsed Monday by the Consumer Federation of America as a way of lessening the demand for corn, is co-sponsored by Sens. Maria Cantwell (D-Wash.), Susan Collins (R-Maine), and Wayne Allard (R–Colo.)

        But the bill, which has been referred to Senate Finance Committee, is likely to see little progress forward. The proposal would re-hash much of the biofuels controversy in last December's energy bill and furthermore has been introduced late in the legislative session.

Sen. Max Baucus (D–Mont.), the Finance Committee chairman, has previously said he is against cutting the ethanol import tariff. Sen. Chuck Grassley (R–Iowa) also would seek to block the bill.

Grassley, likely one of the U.S. ethanol industry's strongest proponents, pointed out recently that Brazil and other countries can export more than 452 million gallons of ethanol duty-free to the United States this year under a special trade agreement with Caribbean nations, but that threshold has yet to be met.

        "Until Brazil and other countries take full advantage of their existing ability to ship ethanol duty-free to the U.S. market, we shouldn't even discuss providing them with yet more duty-free access," Grassley said last week.

Short-term supply issues, input costs seen responsible for high food prices

Peter Ngo

        Alternative energy research group New Energy Finance found in a study that biofuels play a “far from dominant” role in food price increases around the world.

        Environmentalists and academics have blamed biofuels for part of the increase in costs since the beginning of 2007 and resulting food shortage riots in more than 30 countries.

        Price speculation, for one, is not to blame because no amount of speculation can alter the fundamental laws of supply and demand, the analysts said. In the four-year timeframe that New Energy Finance studied, the number of physical deliveries grew faster than speculative trades.

        A big influx of investment into commodities including wheat, sorghum, and palm oil “is to a certain extent driving a short-term price spike,” said the London-based group, which tracks investment in alternative energy.

        While U.S. corn is indeed pricier thanks to mandates to produce ethanol, the researchers said the expansion of the biofuels sector since 2004 is responsible for a maximum of 8% out of the 168% rise in grain prices, and a maximum of 17% out of the 136% rise in food oil prices.

        “Increased biofuels production has been a meaningful driver of food price inflation, but it is far from the dominant factor," said Michael Liebreich, New Energy Finance's chairman. "Increases in input costs have played a much larger role, as have changes in consumption habits and increases in global population.”

        The consultancy concludes ultimately that supply and demand is the biggest culprit for price gains of up to 244% for some crops in the last four years, as people in countries such as China started eating more beef. The next biggest cost factor, in both grains and food oils, is oil and gas, crucial inputs for everything from tractor fuel to fertilizer.

        Finally, the weak dollar is playing a big part as well, making global commodities trade at higher levels.

        But overall, crops being redirected toward biofuels does not appear as much to blame as short-sighted subsidies policies which create market distortions, New Energy Finance found. The findings are similar to analysis by the United Nation’s Food and Agriculture Organization (FAO), which also points to higher energy costs as the main culprit, but says that greater biofuel production could explain 10% of the price rise.

        Still, the head of the FAO said at last week's Rome summit on the food crisis that the role of biofuel subsidies in distorting food supply was still quite pertinent.

        “Nobody understands how $11 to $12 billion a year on subsidies and protective tariff policies had the effect of diverting 100 million tons of cereals from human consumption, mostly to satisfy a thirst to fuel for vehicles,” said Jacques Diouf, director-general of the FAO. "Nobody understands how the rich countries have created a distortion of world market with the $272 billion spent on supporting their agriculture."

        In the opening address of the conference last week, United Nations Secretary-General Ban Ki-moon called for a 50% increase in food production by 2030, saying that failure to feed the world's growing population will spark civil unrest and starvation.

        Shortages of staples such as rice threaten to fuel civil unrest, said Ban, who also wants an end to farm subsidies, agricultural taxes and export controls.

Tyson-ConocoPhillips renewable diesel production now at 300-500 bbls/day

Jack Peckham and Peter Ngo

        Tyson Foods said its venture with integrated energy company ConocoPhillips to convert animal fat is now producing 300 to 500 barrels of renewable diesel per day.

“The progress we've made in producing renewable diesel helps animal agriculture and does not directly impact the food chain," Tyson senior VP Jeff Webster said in a report to investors this month. "We hope future decisions by Congress regarding investment incentives do not impede our company's ability to make these contributions."

A bill in the U.S. Congress would eliminate the $1/gallon biodiesel tax credit if biofuel is “co-processed” along with petroleum diesel at a refinery.

The renewable diesel, which will be shipped and distributed through existing pipelines from ConocoPhillips refineries, purportedly burns cleaner than conventional diesel. Feedstock for the fuel comes from Tyson rendering plants.

Webster also provided an update on Dynamic Fuels – the Tyson Foods/Syntroleum joint venture formed to produce synthetic biofuels for the diesel, jet and military fuel markets – saying that equipment has been ordered, process engineering for the project is completed and final cost estimates are expected this month.

“Construction is expected to begin in the fall of 2008 with start-up planned for the first quarter of 2010. Once in operation, the plant is expected to produce about 75 million gallons of renewable synthetic fuel annually,” Webster said.

Dynamic Fuels won preliminary approval for tax exempt bonds to fund the building of the company's first renewable synthetic fuels facility in Geismar, Louisiana.

        The Louisiana State Bond Commission (SBC) has approved the partnership's application for tax-exempt Gulf Opportunity Zone (GO Zone) Bonds, though rules recently adopted by the SBC may limit bond allocation for any single project to $100 million.

        The total estimated project cost for the Geismar facility has been estimated at $150 million. So, Tyson and Syntroleum will have to come up with the remaining financing themselves.

        Construction is expected to begin in the fall of 2008 with completion targeted for the end of 2009. Once in operation, the plant is expected to produce about 75 million gallons of renewable synthetic fuel annually.

        Tyson said it expects the first facility to produce about 81% diesel, in addition to 14% naphtha and 10% liquefied petroleum gases.

        Dynamic Fuels, a 50:50 venture, plans to build and operate several facilities to produce next generation renewable synthetic fuels using Syntroleum’s Biofining process.

        Syntroleum, which specializes in converting natural gas to synthetic liquid fuels, is contributing its GTL expertise, while Tyson, for its part, is supplying the feedstocks, including animal fats, greases and vegetable oils.

        Meanwhile, Tyson is also examining the potential use of poultry litter to generate energy and other products.

Conventional refiners have increasingly been visible in the next generation biofuel space. BP has been working with DuPont to make cellulosic ethanol as well as biobutanol. Chevron has also formed several research alliances in cellulosic ethanol after pulling out of a FAME biodiesel investment earlier this year.

Last week, Chevron and timber giant Weyerhaeuser Co. created a joint venture company to make cellulosic ethanol from pulp and waste forestry products.

4Rivers to buy Midwest Renewable’s ethanol plant

Taylor Graham

Three months after the first buyer filed for bankruptcy, Midwest Renewable Energy has found another buyer for its ethanol plant in Sutherland, Neb.

        Kentucky-based 4Rivers BioEnergy agreed to buy the plant last Thursday. The plant will give 4Rivers the means to produce 28 million gallons of ethanol annually.

4Rivers Vice President and Executive Director, Stephen Padgett told EBN that the company has publicly stated it is embarking on a parallel acquisition strategy to the flagship greenfield development project in Kentucky.

4Rivers has a unique team, covering a number of disciplines and intends to be a major player in the BioEnergy industry, he said.

“We are currently on an equity road show to raise up to $30 million of equity to commence the acquisition strategy and to supplement the existing cash resources of the business. However, we are approaching the acquisition strategy on a very disciplined basis with strict criteria for selecting opportunities,” Padgett added.

Midwest Renewable Energy happened to meet a number of 4Rivers acquisition criteria, which will further add to its assets to maximize efficiency in terms of value extracted from the corn that is processed and create energy to power the facilities from internal sources, he said.

        An expansion of the Sutherland plant that has already begun will increase capacity to 70 million gallons of ethanol a year. 4Rivers also liked the logistics of the site and local infrastructure.

The company has begun technical, financial and commercial due diligence. It still needs to complete this work, arrange contracts to complete the construction of the expansion project and complete the definitive agreements to acquire the facility. Along with this activity it needs to raise funds to demonstrate cash resources of a minimum of $25 million, Padgett said.

Also, with further investment, the company hopes to apply proven technology from other industries, such as corn fractionation and energy generation via gasification or combustion, to optimize the value created from each kernel of corn processed, said 4Rivers President Gary Hudson in a statement.

Padgett added that the company first hopes to obtain a foothold in the marketplace. This is part of a long term strategy, leading to a cash-positive business, he said.

The ethanol plant is the first of a number of plants 4Rivers has identified among possible acquisition targets. The 130 million gallons per year bio-energy project at Calvert City, Ky., is progressing as planned and will be the flagship greenfield opportunity to be developed by 4Rivers as part of its acquisition plans.

“We are working with our advisors to select a number of targets that meet our requirements for acquisition growth and that fit strategically with the greenfield development opportunity in Calvert City, Ky.,” Padgett said.

Earlier, Midwest had announced an agreement to sell the Sutherland plant to Kansas-based Ethanex Energy. That was killed in March because Ethanex could not raise enough money for the deal, which was valued at $220 million in cash and stock.

Dow and Brazilian company to make plastic from ethanol

Taylor Graham

Dow Chemical’s Brazilian subsidiary is about two months away from acquiring farmland to grow sugarcane for ethanol, for a new ethylene process.

        Dow and Brazilian sugar company, Crystalsev will form a joint venture in Brazil to design and build the first integrated facility of its scale in the world, according to Dow.

        It is expected to start production in 2011. The new facility will use ethanol derived from sugar cane, an annually renewable resource, to produce ethylene—the raw material necessary to make polyethylene, the world’s most widely used plastic.

        Ethylene is typically produced using either naphtha or natural gas liquids, both of which are petroleum products. Polyethylene can be produced from natural gas or crude oil, through crude is the primary source.

        When using ethanol feedstock, the new process would generate considerably less CO2 compared to the traditional polyethylene manufacturing process, the proponents say.

        The new facility will use Dow’s proprietary solution technology to manufacture DOWLEXT polyethylene resins—linear low density polyethylene, which is touted as combining toughness and puncture resistance with high performance.

        The material also offers considerable advantages in a range of different applications, including pipes, films, membranes, and food and specialty packaging.

        By 2012, Crystalsev and Dow aim to grow 8 million tons of sugarcane for the project. Furthermore, the ethanol from the cane will produce 350,000 tons of DOWLEXT.

        The advantage of this material compared to most renewable resource-based plastics is that customers will be using a drop-in replacement made with a renewable resource, not a different polymer. Furthermore, as with the traditional PE product, the sugar cane-based polyethylene would be fully recyclable under existing infrastructure.

        Polyethylene is the most widely used of all plastics and can be found in everyday products, such as food packaging, milk jugs, plastic containers, pipes and liners.

        On a related front, Amyris Biotechnologies recently entered into a joint venture with Crystalsev, which will supply 2 million tons of sugarcane crushing capacity (see EBN 5/2/08).

        The Amyris-Crystalsev JV will begin by launching a new research and development facility in Campinas, Brazil this month. The construction of a pilot plant in the same location is expected in early 2009.

        From that plant, Amyris-Crystalsev expect to begin producing biodiesel commercially in late 2010 or early 2011, with plans for similarly produced “bio-gasoline” and “bio-jet fuel” to follow a year or two after that. The project’s technology can be used with a wide variety of stocks.