A new Frost & Sullivan biofuels research report finds that the European Union’s new targets for biofuels blending through 2020 will require second-generation biofuels.

Because of quality problems with first-generation biodiesel, “Europe is expected to achieve only 5% against a biofuels target of 5.75% by 2010,” the report says..

“The cost disadvantage of producing biofuels is significantly higher than the benefits achieved from their use. This scenario is unlikely to change until 2015, even with the use of second generation biofuels.

Diesel markets world-wide continue to indicate falling prices and rising stocks. Among the key price indicators:

New York February ULSD futures last week sagged to $1.395/gallon, while March ULSD was even weaker, at $1.380 last Friday.

New York ULSD spots were only slightly higher at $1.45, while Houston ULSD spots were in the $1.41/gal range.

Rotterdam ULSD spots were in the $1.52/range, while the benchmark ICE gasoil (high-sulfur diesel) futures were trading around $1.45.

Singapore high-sulfur diesel (gasoil) was trading around $1.31, while Japan export Euro-5 ULSD spots were in the $1.35/gallon range.

As a bellwether of the world diesel engine and equipment business, Cat’s latest earnings story (released Jan. 26) confirms a downward global trend.

While fourth-quarter 2008 sales and revenues were up 6% over 4q 2007, profit fell 28%, Cat said.

Some of the approximately 18 companies involved in a Southwest Research Institute (SwRI) “high efficiency dilute gasoline engine” (“Hedge”) R&D program may introduce a light-duty car in the next couple of years that could compete with diesels on torque, CO2 and fuel economy, at engine loads below 80%.

Key advantage: Hedge engines would employ relatively cheap and simple gasoline three-way catalysts for emissions control, instead of the relatively more expensive combination diesel particulate filter/selective catalytic reduction (DPF/SCR) systems for nitrogen oxides and particulate matter controls for U.S. EPA Tier-2, Bin-5 light-duty vehicle limits, or EPA “Tier 4” non-road diesel limits.

While many of the world’s oil companies are scaling-back expansion in the face of falling oil and product prices, Petrobras announced Jan. 26 that it’s making a huge increase – 71% in upstream and 46% in downstream.

For its 2009-2013 spending plan, “in comparison with the Business Plan 2008-12, the most significant increase [is] in exploration and production, with a growth of 71% in investments equivalent to US $92 billion, or 53% of the US $174.4 billion for the 2009-13 period.

Immediately upon President Barack Obama’s new U.S. EPA Administrator Lisa Jackson taking her new job, California Air Resources Board (CARB) fired off a petition urging EPA to allow California and 13 other U.S. states to impose CO2 emissions controls on motor vehicles.

“We feel strongly that under its new leadership, EPA will recognize that the decision made by the former administrator to deny California the waiver to enforce our clean car law was flawed, factually and legally, in fundamental ways,” said CARB Chairman Mary Nichols.

Contrary to an earlier U.S. EPA analysis of the total greenhouse gas (GHG) emissions of a coal-to-liquids (CTL) plant versus a conventional oil refinery, CTL diesel with CO2 capture & storage (CCS) produces 5-12% less CO2 than oil refinery diesel.

So found the U.S. Dept. of Energy National Energy Technology Lab (NETL) in a new study.