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Posts Tagged ‘Department Of Agriculture’

The next few months could be “make or break time” for the soy biodiesel industry in the U.S.

Biodiesel faces several challenges right now, including the high cost of the feedstock and the loss of the one dollar biodiesel blenders’ tax credit, which Congress allowed to expire on December 31^st.  Indications are that most biodiesel plants have ceased production as they await Congressional action on the tax credit, which may not happen until March.

In Iowa, the state’s Renewable Fuels Association has launched a campaign to highlight the importance of biodiesel—and renewable fuels, in general—to Iowa’s economy.  Monte Shaw is the executive director ofIRFA. “We’ve got a lot of exciting thing coming down the road for this industry—things that are going to really redefine renewable fuels for the future,” says Shaw. “Whether it’s exciting feedstock projects like the algae project at Shenandoah, or maybe it’s the biorefinery  project that’s scheduled to go into Newton.”

Good reasons, Shaw says, to keep Iowa’s biodiesel industry viable.

“If we let the current biodiesel industry wither away and lose the jobs we have today, it also means we’re not going to be the place—we’re not going to be the state—where those next generation investments and next generation jobs come either,” he says.  “So we’re really at a turning point, not just for the investors and jobs of today, but for making Iowa the place to be for the future of this industry as well.”

In addition to the federal tax credit extension, Shaw says IRFA will also be lobbying for a five percent biodiesel mandate in the Iowa legislature.

“We really do need a B5 fuel quality standard to create a low level of demand,” says Shaw. “It’s constant, it’s year-around, it’s predictable—and that’s what can help these plants cash flow during the good times and the bad times.”

A bill creating a B5 fuel quality standard passed the Iowa Senate in 2009, but time ran out before the Iowa House could consider the legislation.

Earlier this month, the US Department of Energy announced almost $600 million in funding for advanced biofuel projects.     This money is intended to push forward next generation biofuels, since corn based ethanol plants have come under fire for increasing food costs.   One of the beneficiaries of the funding is Sapphire Energy, who received $50 million from the DoE and another $54.5 million load guarantee from the Department of Agriculture, under the Biorefinery Assistance Program (part of the 2008 Farm Bill).

Sapphire Energy has developed a process  to produce oil from algae and then turn this oil into gasoline that is virtually identical to the gasoline that is used in cars.   Sapphire calls its gasoline a “drop-in” replacement since its fuel can be used in existing engines without any modification to the vehicle.    Sapphire is currently ramping up production of its biofuel and is looking to produce 1 million gallons of algae based fuel per year by 2011, and 100 million gallons per year by 2018.

The Department of Energy said Friday it would give $564 million in stimulus funding to 19 projects aimed at turning biomass into fuels, chemicals and power.

The grants are hoped to help the federal government meet its aggressive deadline to get 36 billion gallons of biofuel production up and running by 2022 – a goal government and industry analysts have said will be hard to reach.

The 19 winning projects span 15 states, and include both giants like Archer Daniels Midland (ADM) and Honeywell’s (HON) UOP and startups such as ZeaChem, Amyris, Solazyme and Algenol.

The projects are aimed at using non-food feedstocks such as wood chips, grasses, algae and municipal waste to make biofuel. A federal mandate calls for 100 million gallons of cellulosic ethanol to be made by next year, but it appears increasingly likely that this target will not be met.

The grants aren’t all for biofuel production – some are aimed at the production of biochemicals or generating power from biomass, though most of those are linked to biofuel production.

While most of the projects haven’t received DOE funds yet, one has – BlueFire Ethanol (BFRE.OB), which will get an additional $81.1 million to help along its plans to build a 19 million gallon-per-year plant making ethanol from biomass and waste in Fulton, Miss. BlueFire had received $40 million to build a plant in California, but moved the project to Mississippi in October.

Also on Friday, the U.S. Department of Agriculture said it would give San Diego, Calif.-based algae biofuel startup Sapphire Energy a $54.5 million loan guarantee from the 2008 Farm Bill’s Biorefinery Assistance Program to build a demonstration plant in New Mexico. Sapphire also received $50 million in DOE grants.

Some selected DOE grant winners include:

• Algenol Biofuels will get $25 million to make ethanol from algae at a 100,000 gallon-per-year demonstration plant in Freeport, Texas.
• American Process Inc., of Alpena, Mich., will get $17.9 million to build a plant to make 890,000 gallons of ethanol and 690,000 gallons of potassium acetate from processed wood.
• Amyris Biotechnologies, of Emeryville, Calif. will get $25 million to help build a pilot plant to use its genetically altered yeast to turn sugar from fermented sweet sorghum into hydrocarbons closely resembling diesel fuel, as well as lubricants, polymers and other petrochemicals.
• Archer Daniels Midland, of Decatur, Ill. will get $24.8 million for a facility to use acid to break down biomass to convert to ethanol or ethyl acrylate.
• Clearfuels Technology, of Commerce City, Colo. will get $23 million for a plant to make woody biomass into diesel and jet fuel using processes from the company and partner Rentech (RTK).
• Enerkem will get $50 million to build a plant in Pontotoc, Miss. to convert municipal wastes into syngas for conversion to biofuels.
• Logos Technologies will get $20.4 million for a Visalia, Calif. plant to convert switchgrass and woody biomass into ethanol.
• Solazyme will get $21.8 million for a Riverside, Penn. plant to produce algae oil to convert to oil-based fuel.
• UOP, a Honeywell company, will get $25 million to develop a Kapolei, Hawaii plant in partnership with Ensyn to turn a variety of crops and feedstocks into fuels.
• Zeachem will get $25 million to build a wood-to-ethanol plant in Boardman, Oregon.