green and sustainable business

Biofuel convergence: first gen down, second gen up

with 4 comments

Lots going on,  from Obama in Europe and the G20, a new task force and another biofuel company hitting the skids.

Government role on support, access to biofuel feedstocks crucial

Second generation biofuels are taking center stage as the market shakes out the first generation biofuel producers.The research firm Frost and Sullivan says that nearly all of the technologies for the production of second generation biofuels are in the final stage of commercialization and their launch is expected within the next two years.

These are biofuels that are derived from non-food biomass such as agricultural and forest waste, or energy crops like miscanthus and switch grass.

The conclusion: The success of these fuels will depend to a large extent on the sustainability policies and measures that nations develop and implement, says Frost & Sullivan Analyst Phani Rajkumar Chinthapalli.

Then there’s the questions of availability and access: “Ensuring access to the required feedstock for second generation biofuels is also crucial for the sustainability of the market.” Accessibility to this biomass will play a catalytic role in ensuring the long-term commercial viability of second-generation biofuels.

“The accessibility changes for different feedstock,” Chinthapalli says. “Agricultural waste, forest residues and energy crops have different supply models to get them to the gates of biofuels manufacturers. Frost & Sullivan believes it would be most profitable for producers to partner with forest and food industries.”

Availability is not as big a concern. The estimates of biomass by different organizations such as the European Environment Agency (EEA) and the International Energy Agency (IEA) at local, national and international levels have shown that there will be no lack of feedstock for second-generation biofuels.

The Palo Alto, CA firm believes that the policies and the long-term renewable fuel targets set by the European Union and the US will significantly assist in establishing second-generation biofuels. They will also help sustain the commercial success of such fuels up to 2020.

Related to that premise, on Wednesday U.S. Congressional leaders were asked to help biofuel producers and biotechnology companies overcome economic obstacles to obtaining financial backing and bring commercially ready advanced biofuels to the marketplace. The Biotechnology Industry Organization (BIO) weighed in with a letter to Congressional leaders proposing “six principles to guide development of legislation needed to support continued development and deployment of advanced biofuels.”

The principles, as outlined by BIO:

· Implement a comprehensive systems policy approach to federal support for advanced biofuels and biobased products deployment that recognizes the need for coordinated end-to-end infrastructure development;

· Inject immediate capital for biorefinery construction, feedstock development, and fuel delivery infrastructure by boosting funding and quickly issuing loans and loan guarantees for biorefinery construction;

· Ensure a strong market for advanced biofuels by maintaining the Renewable Fuel Standard, addressing the blend wall, and extending the cellulosic producer tax credit;

· Incentivize the full range of biobased products produced by biorefineries by ensuring renewable chemicals and biobased products facilities are eligible for grant and loan programs;

· Aggressively fund ongoing research, development and deployment to maximize economic competitiveness, sustainability and greenhouse gas benefits of advanced biofuels and biobased products; and

· Explicitly incentivize greenhouse gas reducing biotechnologies in climate change legislation.

Second generation biofuels could also find an ally in the forest and food industries Frost & Sullivan said. The paper and pulp industries, which have low operating profits for the last 30 years, would benefit from expanding into this new market.

“Sugar companies across the globe are looking to participate in the biofuels market with their waste by-products,” says Chinthapalli. “Large joint ventures and partnerships between forest and food companies and technology providers are being formed across the world. Biomass power plants can also be viewed as potential customers for the second generation biofuels technology providers.”

In addition to biomass, algae represents a potentially lucrative alternative market for fuels in the future. Companies and researchers are increasingly investigating the development of high yield algae and the production of fuel from algae, Frost & Sullivan says.

“In Japan, fuels that are based on camelina, jatropha and algae have successfully been tested,” Chinthapalli says. “The competition from algae-based biofuels is expected to be strong in the future due to its high yield potential compared to other biomass feedstock.”

Industry, experts join “low carbon prosperity task force”

In response to an invitation from UK Prime Minister Gordon at the World Economic Forum Annual Meeting in Davos, 52 companies joined forces with 34 experts and organizations to create a “Low-Carbon Prosperity Task Force.”

The Task Force, launched at a press conference in London and timed to coincide with G20 economic summit in London, will work with government and UN officials to develop a set of practical projects and policy proposals around the world designed to stimulate the low-carbon economy from 2010 onwards.

An open letter signed by The Climate Group was sent Tuesday to Prime Minister Brown, setting out the Task Force’s suggested agenda for the coming months.  The Task Force’s recommendations for ready-to-implement “low-carbon projects” will be delivered to UN Secretary-General in September.

Low Carbon Prosperity Task Force

Nova Biosource Fuel goes belly up

Earlier this week I wrote about the financial problems of the Denver ethanol producer Biofuel Energy, which has posted huge losses and warned that a bankruptcy filing could be in its future.

Well, another biofuel outfit, Nova Bioresource Fuels (AMEX-NBF), a Houston-based refiner and marketer of ASTM quality biodiesel, announced on Monday that it has filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. Chapter 11 usually means continued operation while restructuring operations and finding new funding sources.

NBF cited the drop in energy prices as the catalyst for its decision. The company also said that it has $50 million in liabilities and assets The company posted an $11 million first quarter loss, and included 10 affiliate companies in the bankruptcy filing.

Nova produces biodiesel from fats, oils and greases, and from a total of five refineries.

Nova joins other recent bankruptcies such as VeraSun Energy, and another filing may be imminent from Aventine Renewable Energy, which is attempting to restructure outside of court.


Written by William DiBenedetto

2 April, 2009 at 12:22 pm

Posted in alternative energy, biofuel

Tagged with

4 Responses

Subscribe to comments with RSS.

  1. […] AND BIOFUELS – Finally, put this one on your bloglist.  WRDFOWRD.  Good reporting on the business of alternative energy.  Today’s report comments on Frost […]

  2. Interesting, I`ll quote it on my site later.


    20 April, 2009 at 1:17 am

  3. Hi! Really good information, I have bookmarked your site, perhaps you would like to take a look at http://www.bio-partners.co.uk as we have some information you may find usefull in the members area – Keep up the Good Work!

    Tim Andrews

    5 January, 2010 at 4:36 am

  4. This is some really information, I just finished up my paper for school and think i may need to bookmark or save this for the second class lol. You may have just made me a regular :)

    Bankruptcy Blog

    13 January, 2010 at 11:52 pm

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: