Ethanol & Biofuels News

Ethanol prices steady with previous week

Ethanol prices at the rack fell slightly but largely held on to gains made in recent months in the most recent week, with traders citing continued tighter supply and lower gasoline prices as impacting the market.

The aggregated national average was $1.98 a gallon last week, virtually even with the previous week’s level. In most markets, rack pricing was reported to be either unchanged or down 1 to 2 cents.

Ethanol producers’ hypothetical net profit using DeWitt & Co.’s methodology was at zero last week due to an increase of corn prices, but lower natural gas prices last week helped mitigate the result.

U.S. imports of ethanol in September dropped to levels not seen since January and February of 2006, according to the latest data from the U.S. Energy Information Administration (EIA).

Latest Senate maneuvering has RPS dropping from energy bill

Momentum on the two big policy packages being pushed in Congress appeared to shift to the 2007 farm bill from the energy bill on Tuesday, with the Senate spending much of the day debating – and ultimately rejecting – an amendment to the farm bill that would make deep cuts to federal supports and expand crop insurance.

Nevertheless, one of the critical pieces of the energy bill was on the agenda throughout. Senate leaders are working to push through an amendment by Pete Domenici (R-N.M.) that would make the Senate’s expanded Renewable Fuels Standard (RFS) part of the farm bill instead.

Majority Leader Harry Reid (D-Nev.) indicated Tuesday that an expanded renewable fuels mandate would be part of the farm bill, along with a provision that would provide more than $1 billion to encourage use of cellulose as a feedstock for biofuels.

A similar provision is included in stalled energy legislation, and the view is that supporters want to include the language in the farm legislation in case the energy bill doesn't pass.

European Biodiesel Board to formally lodge complaint against U.S. producers

The European Biodiesel Board (EBB) have begun to seek formal redress against U.S. biodiesel producers who are taking advantage of a well-known subsidy loophole that gives them huge pricing support in European markets.

Representatives of the EBB, which more than 8% of European biodiesel production, have unanimously agreed to initiate a joint anti-dumping and anti-subsidy complaint to the European Commission because they are having to contend with dumping competition from U.S. B-99.

Biodiesel subsidized $1 per gallon in the U.S. is also eligible for European subsidies when blended, and U.S. producers are splashing shipments with a token amount of diesel fuel.

Last month, the EBB estimated that 800,000 metric tons of biodiesel have been imported from the United States by Europeans in 2007 to date, up from 100,000 tons for the whole of 2006.

Chinese biodiesel producer to IPO in U.S.

China’s largest biodiesel producer, Gushan Environmental Energy Ltd., is looking for about $171.6 million in an initial public offering of American Depositary Shares (ADS).

Gushan, which is located in Fuzhou City in Fujian Province, plans to use proceeds from the IPO to expand its production capacity and research and development efforts, as well as for other general corporate purposes.

Gushan filed a preliminary prospectus with the SEC last week and expects the offering to price between $11.50 and $13.50 per ADS. The company plans to list its shares on the New York Stock Exchange under the symbol “GU.”

Investors might view tepidly the prospect of a biodiesel IPO, except for the fact that the Chinese market is a wholly different creature from the heavily subsidized and oversupplied biodiesel animal of the West. According to China's National Grain and Oil Information Center, biodiesel demand will exceed the country's domestic production by 2010.

China’s annual demand for biodiesel is expected to reach 1 million tons that year, which is 20% more than the country's expected domestic biodiesel production volume.

EU planning 10% biodiesel directive

The plan, if adopted, would require European member states to meet a 10% biofuels target and a 20% renewables target for energy by 2020, as EU energy ministers had agreed in February.

Caribbean ethanol industry says CBI not enough for revival

Even tariff exemption and flourishing ethanol demand from the U.S. market has failed to renew the Caribbean sugar industry.

Reduced Manitoba province ethanol mandate to begin next month

Manitoba passed its Biofuels Act in 2003, but the start of the ethanol mandate fell more than two years behind schedule.

Brazil lashes out on US-EU “green trade” proposal

Brazil’s stance bodes poorly for the chances of a new global commerce pact, which the 151 WTO members are struggling to advance six years into the negotiations.

Shake-up possible for Chevron biodiesel investment in Galveston

The plan for the facility could change to use funding improve its rail, barge and deep water transportation options.

Ethanol construction suspensions, cancellations continue

VeraSun Energy, Glacial Lakes Energy and Chippewa Valley Ethanol Co. have also all suspended expansion projects in recent weeks.

Shell forms JV to study algae feedstock potential in Hawaii

An academic research program will support the project, screening natural microalgae species to determine which ones produce the highest yields and the most vegetable oil.

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