The document provides a summary of recent news and announcements from the global biofuels market. Key points include the European Commission proposing to limit the use of food crops for biofuel production to 5% by 2020 and encourage advanced biofuels. US groups urged Congress to support the Renewable Fuel Standard. A US report highlighted trends in biodiesel and ethanol use and challenges facing further growth. Several companies announced capacity expansions or new facilities for biodiesel and cellulosic ethanol production.

1. NNFCC Market Review
Biofuels Issue Seven, October 2012
E
While at the same time there remain serious
ach month we review the latest
question marks over how the government will
announcements and news from
deliver the remainder of the 10 per cent EU
across the global biofuels market. transport fuels target using „advanced‟
This service is exclusively for our business biofuels made from non-food feedstocks such
members. as algae and straw.
Foreword Industry was forewarned about the changes,
when a leaked document was published last
Welcome to the October issue of our biofuels month. The proposals have remained largely
market review. This month, the European unchanged, but there was some respite for
Commission released their proposals to limit the biofuels industry as the Commission made
the use of food crops in biofuel production a u-turn on plans to include indirect land use
and encourage the market for a new change emissions in sustainability accounting,
generation of „advanced‟ biofuels that do a change which will has been welcomed by
not create additional demand for land. the industry and will chiefly benefit first
generation biodiesel producers. However,
The plans include a 5 per cent cap, by others like Oxfam criticised the decision
energy, on using food crops in producing saying the proposals “don‟t go far enough”.
transport fuel in the EU. By putting a cap on
the use of food crops, the Commission has Read on for all the latest biofuels news.
effectively announced the slow death of the
European first generation biofuels market.
Highlights
Biofuels currently account for around 4.5 per
cent of transport fuel used in the EU; much of Page 2 Market News
which comes from food crops.
Page 3 Crop-based Biofuels
Couple this with the future increase in crop-
Page 4 Advanced Biofuels
based biofuel production capacity already
planned and the fact that most operational Page 6 Aviation Biofuels News
biofuel facilities are not running at full
capacity, it is likely the 5 per cent cap will be Page 7 Commodity Prices
reached within the next twelve months. Page 8 Events
NNFCC Market Review, October 2012, Page 1 of 8

2. Market stock changes caused by indirect land-use
change in the FQD. This will be used to
calculate the life cycle greenhouse gas
emission savings from biofuels and bioliquids,
but will not be used in the sustainability
accounting rules for biofuels.
However, the Commission has confirmed it will
review the effectiveness of the proposed ILUC
measures and, if appropriate, will produce a
legislative proposal for introducing estimated
indirect land use change emissions factors
into the appropriate sustainability criteria to
European Commission reveal plans to be applied from 1st January 2021.
limit use of food crops in biofuel
production In addition, the Commission intend to
increase the minimum greenhouse gas saving
The European Commission have announced threshold for biofuels produced in new
changes to the Renewable Energy Directive installations with effect from 1st July 2014 in
and Fuel Quality Directive (FQD), with the aim order to improve the overall greenhouse gas
of limiting the use of food crops in producing balance of the biofuels and bioliquids
biofuels, while encouraging the market for consumed in the EU as well as discouraging
advanced biofuels made from feedstocks further investments in installations with low
that do not create additional demand for greenhouse gas performance.
land.
Click here for more information.
Under the proposals the amount of food
crops being used in the production of biofuels Groups ask Congress leaders to back
will be capped at just 5 per cent of the final
Renewable Fuel Standard
energy consumption of each European Union
member state in 2020. Currently biofuels
A coalition of US biofuel trade organisations
contribute around 4.5 per cent of the final
have urged House and Senate leaders „to
energy consumption in the European Union,
stay the course‟ on the Renewable Fuel
meaning there is little scope for further
Standard (RFS). A drafted letter tells the
development in this area.
Environmental Protection Agency that a
waiver of RFS requirements is neither
Member states are required to generate at
„desirable nor warranted‟.
least 10 per cent of their final energy
consumption in transport from renewable
The letter provides evidence to demonstrate
sources in 2020. To make up the shortfall, the
that waiving the RFS will have a minimal
Commission announced there would be an
impact on grain prices, weaken the US
"enhanced incentive scheme" to further
commitment to renewable fuels thus
promote advanced biofuels made from
increasing gas prices, would cool investment
feedstocks that do not create an additional
in advanced biofuels and destabilise a
demand for land. These fuels, made from
cornerstone of the US economic recovery.
feedstocks like algae and straw, will count for
Any decision on a RFS waiver is expected to
double or even quadruple towards targets.
come by the middle of November.
There will also be greater emphasis put on
Click here for more information.
reporting estimated emissions from carbon
NNFCC Market Review, October 2012, Page 2 of 8

3. Crop-Based Biofuels There was also caution looking to the future;
with almost all gasoline in the US already
blended with 10 per cent ethanol (E10), the
maximum level approved for use in all cars
and light trucks, ethanol use is facing a blend
wall unless higher percentage ethanol blends
can achieve significant market penetration.
While the US Environmental Protection
Agency (EPA) has approved a 15 per cent
ethanol blend (E15) for vehciles made after
2001, concerns remain about vehicle
warranties, liability for misfueling and
infrastructure costs, which could limit E15 use.
Ethanol share of US gasoline consumption,
2009-2012. Source: EIA Anticipated growth in the use of cellulosic
ethanol has failed to materialise, says the
report, and there was no production of
cellulosic biofuels in 2010 or 2011, while
production of cellulosic biofuels in 2012 is likely
to be well below targets.
Click here for more information.
German bioethanol business records
positive yearly results
Diesel share of US distillate consumption,
2009-2012. Source: EIA German bioethanol producer CropEnergies
has posted new record revenues for its first
US report highlights biofuels trends half financial results. Company revenues grew
and issues to €319.9 million, an increase of 16 per cent
from the same period last year (Mar-Aug). Its
The US Energy Information Administration operating profit also rose by 28 per cent to
have published their biofuels issues and trends €37.2 million and its net financial debt was
report. According to the report biodiesel use reduced by €37.3 million to €121.1 million.
grew from less than 1 per cent of US distillate CropEnergies attributed the jump in profits to
consumption at the start of 2009 to around 3 its “diverse supply chain”, which provides
per cent in August 2012. Ethanol use grew bioethanol and vegetable proteins for the
from 7 per cent of US gasoline consumption food sector.
to nearly 10 per cent over the same period.
Click here for more information.
The report reveals that in the 2010/11, 40 per
cent of the US corn crop and 14 per cent of New investment to double Bangchak
soybean oil production was used to produce biodiesel output
biofuels and other products, including animal
feed. However, a serious drought in the Thailand-based oil refiner Bangchak
midwestern US during summer 2012 lowered Petroleum says it is set to invest THB1.2 billion
crop production estimates, resulting in higher (€30.2 million) in two biodiesel projects.
prices and a reduced forecast for biofuels Bangchak will invest two thirds of the money
production for 2012/13. in doubling the capacity of it Ayutthaya
NNFCC Market Review, October 2012, Page 3 of 8

4. biodiesel plant to 600,000 litres per day and tonne of petrol every day, within two years
the remaining investment will go into building and a refinery scale facility within 15 years.
a palm oil crushing facility in Rangsit. It is
believed that downstream biodiesel Click here for more information.
production will start in 2013 before
commercial operations begin in 2014. DuPont contracts Fagen to build
commercial cellulosic ethanol
Click here for more information.
biorefinery
DuPont has selected Fagen to build one of
the world‟s first commercial-scale cellulosic
Advanced Biofuels ethanol biorefineries in Iowa, US. Fagen has
constructed more than 85 ethanol plants and
recently entered into collaboration with
Butamax Advanced Biofuels, a joint venture
between BP and DuPont, to retrofit ethanol
plants to produce biobutanol.
DuPont have already purchased land
adjacent to their existing Lincolnway Energy
ethanol plant to build the refinery; which they
Source: Air Fuel Synthesis
say will enable synergies in energy and
logistical management.
British engineers produce 'petrol from
air' technology Click here for more information.
At this month‟s Institution of Mechanical TMO Renewables signs feedstock
Engineers Conference, UK-company Air Fuel
contract with Brazilian sugar and
Synthesis presented their new “petrol from air”
technology concept. The technology works ethanol business
by taking sodium hydroxide and mixing it with
carbon dioxide from the atmosphere before During a recent UK business delegation to
„electrolysing‟ the sodium carbonate, so that Brazil led by Prime Minister David Cameron,
it produces pure carbon dioxide. Hydrogen is TMO Renewables signed a Letter of Intent
then produced by electrolysing water vapour with Copasucar, the largest Brazilian sugar
captured with a dehumidifier. The pure and ethanol commercialisation operation
carbon dioxide and hydrogen are then with integrated production.
combined to produce methanol which is
passed through a fuel reactor, making petrol. With the support of the Prime Minister, TMO
presented its waste to ethanol technology to
The £1.1m project, in development for two industry leaders in Brazil; the second biggest
years, is funded by a group of unnamed producer of ethanol and an expanding
investors who believe the technology could market for next generation ethanol. The
prove to be a cost-effective way of creating agreement secures a 25 year contract for
carbon neutral transport fuel. Company 400,000 tonnes per year of bagasse (leftover
officials say they have produced five litres of sugarcane residues), to support a 10 million
„drop-in‟ petrol in three months from a small litre per year ethanol refinery to be built
refinery in Teesside, but hope to build a larger alongside the Copasucar Sugar Mill.
plant, which could produce more than a
Click here for more information.
NNFCC Market Review, October 2012, Page 4 of 8

5. as a solution to finding a reusable catalyst for
converting biomass into fuel.
While scientists are now able to produce
these nanospheres in ways that control the
size of the pores and the type and position of
the catalytic groups, understanding precisely
how these chemical reactions take place is
allowing further fine-tuning and predictable
Source: Ensyn control of catalytic processes.
Ensyn and Fibria establish strategic A team of scientists at Ames have now
determined that though these particles were
alliance for the production of fuels
designed with hollow passages specifically to
and chemicals from cellulose maximise the surface area available for
chemical reactions, these reactions don‟t
Ensyn and Fibria Celulose have announced happen uniformly across the entire surface
the creation of a strategic alliance, which area of the particle.
includes the establishment of an equally-
owned joint venture for the production of This issue prompted the Ames team to
cellulosic liquid fuels and chemicals in Brazil, develop a new model which allows better
as well as a US$ 20 million equity investment in predictions of how these complex systems will
Ensyn Corporation by Fibria. behave. Consequently, researchers found
that increasing the pore size of the spheres by
Fibria are one of the world‟s largest pulp less than one nanometer improved the
producers, while Ensyn have developed the catalytic activity more than twenty times.
Rapid Thermal Processing™ pyrolysis
technology, which converts cellulosic Click here for more information.
biomass into bio-based fuels and chemicals.
The US$20 million investment will provide Fibria
New technology using ionic liquids to
with ownership of approximately 6 per cent of
Ensyn and also provides Fibria certain rights, break down cellulose could pave
which, if exercised, would allow Fibria to way for cheaper biofuels
invest additional capital and increase its
holdings to as much as 9 per cent of Ensyn. Hyrax Energy and the Wisconsin Alumni
Research Foundation have agreed a
Click here for more information. licensing agreement for a new method of
producing bio-based chemicals and fuels
New research on nano-catalysts that promises to accelerate commercial
development of the technology.
could improve processes for refining
bio-based fuels and chemicals The process uses ionic liquids to break down
cellulosic or non-food plant biomass without
Scientists at the US Department of Energy‟s using enzymes or costly pre-treatment. The
(DOE) Ames Laboratory have announced company‟s process creates fermentable
major progress in the refining process for bio- sugars, which can be converted into a variety
based fuels and chemicals using of important chemicals, including biofuels
nanospheres. These tiny spheres of silica, and bioplastics.
embedded with catalytic groups and a
honeycomb of pores, have been developed Click here for more information.
NNFCC Market Review, October 2012, Page 5 of 8

6. Biocaldol cease trading
UK-based next generation biofuel specialists
Source: MJ Daly, USUHS Biocaldol and their R&D business
Bioconversion Technologies Limited went into
Deinove create bacteria strain that administration on 14th Sept 2012 and have
transforms biomass into next ceased trading. Biocaldol developed micro-
organisms, custom-made process design and
generation bioethanol
engineering for the production of next
generation biofuels, animal feed and other
French biotechnology company Deinove
biomass-derived products. No reason has
have announced that its R&D team and its
been given for the closure.
partners in the Deinol program have isolated
and optimized a strain of Deinococcus
Click here for more information.
bacteria able to generate ethanol from
wheat-based biomass. With production of an
alcohol content of more than 3 per cent,
Deinol exceeded its goal for this proof of
concept milestone. Aviation Biofuels
Deinove‟s Deinococcus bacteria can
degrade complex biomass residues into
simple sugars and convert them into ethanol,
all in a single process and without additives
(such as enzymes, yeast or antibiotics). This
successful milestone triggers the payment of
€1.15 million to Deinove by the French ministry
of industry.
Click here for more information.
Large-scale production of algal
biofuels poses sustainability concern Pilot-scale reactor, Source: ARA
Scaling up the production of biofuels made New biojet fuel test on course in
from algae to meet at least 5 per cent – October
approximately 39 billion liters – of US
transportation fuel needs would place
US-based Applied Research Associates and
unsustainable demands on energy, water,
Chevron Lummus are working with Agrisoma
and nutrients, says a new report from the
Biosciences, the National Research Council of
National Research Council.
Canada (NRCC) and the US Air force
Research Laboratory to evaluate and
However, these concerns are not a definitive
ultimately produce a 100 per cent drop-in
barrier for future production, and innovations
biojet fuel. Carinata seeds form the basis of
that would require research and
the new RediJet fuel, which will be tested in a
development could help realize algal
NRC Falcon-20 twin engine jet at the end of
biofuels' full potential.
October in Ottawa, Canada.
Click here for more information.
Click here for more information.
NNFCC Market Review, October 2012, Page 6 of 8

7. Abu Dhabi biojet fuel project step Sustainable jet fuel will then be produced
closer using sea water pumped into agricultural
ponds that contain local shrimps and sea
bream. The waste water from those ponds will
A demonstration farm at the Masdar Institute
also be used to irrigate local fields.
of Science and Technology (MIST) is closer to
finding a home. MIST, in collaboration with the
This research is being supported by Etihad
Abu Dhabi Urban Council and Western
Airways, Honeywell, Safran and Boeing while
Region Municipality, is evaluating several
the demonstration farm will be funded by the
options to acquire 200 hectares of land by
Abu Dhabi Government.
the end of this year.
Click here for more information.
Commodity Prices
Arrows indicate rise (↑), constant (–) or fall (↓) from previous month.
Price, US$/US gallon
Item Sep 07 Sep 12 % Price increase
Diesel (NY) 2.32 ↑ 3.23 39.18
Unleaded petrol (NY) 2.10 ↑ 3.27 55.57
New York Harbour petrol and diesel prices, source www.indexmundi.com
Price, US$/US gallon
Item Oct 11 Oct 12 Expected 2012 avg. Index value (2000=100%)
Jet Fuel (Global) 3.029 ↑ 3.165 ↑ 3.076 363.4
Global jet fuel prices, source www.platts.com
Expected average fuel price for airline industry in 2012 is provided by IATA please see www.iata.org
2012 aviation fuel costs estimated to cost aviation industry $31 billion on 2011 fuel costs
Bio jet fuels 2010 cost: $6.39-6.94/gallon (likely to cost $2.22/gallon by 2030), source Indian Oil
Price, US$/US gallon
Item Nov 12 Dec 12 Jan 13 Feb 13
Ethanol Futures (CBOT) ↑ 2.406 ↑ 2.390 ↑ 2.374 ↑ 2.361
Ethanol Futures (NY) ↑ 2.490 ↑ 2.475 ↑ 2.460 ↑ 2.450
Chicago and New York ethanol futures, source www.cmegroup.com
Item Price, €/tonne Oct 12
Ethanol Spot (FOB T2) ↓ 665.00
Biodiesel Spot (FAME 0°C, CFPP FOB ARA) ↓ 1079.25
Biodiesel Spot (SME, CIF ARA T2) ↓ 1099.25
Biodiesel Spot (PME, CIF ARA T2) ↓ 976.75
Biodiesel Spot (RME, FOB NWE) ↓ 1234.25
European ethanol and biodiesel spot price, www.kingsman.com
NNFCC Market Review, October 2012, Page 7 of 8

8. Biofuels: the Renewable Transport Fuel
Events
Obligation, progress on adoption and
F.O. Lichts World Ethanol & Biofuels the next generation, 08 Nov 2012 in
2012, 05-08 Nov 2012 in Munich, London, UK
Germany www.westminsterforumprojects.co.uk/forums/
web.agraevents.com event.php?eid=450
Leading event for the global biofuels industry This seminar will be a timely opportunity to
with 70+ speakers, 700+ delegates from 45+ assess the development of biofuels in the UK‟s
countries, 40 different sessions, social events energy mix, the impact of the recently
and structured networking over four days. amended Renewable Transport Fuel
Obligation (RTFO) and development in
NNFCC Head of Biofuels and Bioenergy, Dr advanced biofuels.
Geraint Evans, will be speaking on the future
of advanced biofuels. NNFCC CEO, Dr Jeremy Tomkinson, will be
speaking at 12.00 on the advancements in
Life Cycle Assessment Workshops, the development of advanced biofuels.
07-08 Nov 2012 in York, UK
www.nnfcc.co.uk/events Rushlight BioBriefing: The Future
Prospects for Biofuels, 29 Nov 2012 in
Two workshops have been developed to London, UK
provide a basic understanding of LCA and www.rushlightevents.com/index.php/em/eve
how to set about doing one. The first nt/action/view/frmEventID/3/frmPageID/190/
workshop covers the principles of LCA,
requirements, problems and issues. The The main focus of this event is on the future
second provides a „hands on‟ opportunity to prospects for biofuels; looking at the
learn to carry out an LCA. The workshops can opportunities, regulatory regime and
be taken together or separately. technical challenges facing the industry.
Credits and Disclaimer
NNFCC Market Review is edited by Dr Matthew Aylott for NNFCC members. Feedback is welcome.
The Review has been compiled in good faith and NNFCC does not accept
responsibility for any inaccuracies or the products or services shown.
NNFCC
The Bioeconomy Consultants
NNFCC, Biocentre, Phone: +44 (0)1904 435182
York Science Park, Fax: +44 (0)1904 435345
Innovation Way, E: enquiries@nnfcc.co.uk
Heslington, York, Web: www.nnfcc.co.uk
YO10 5DG.
NNFCC Market Review, October 2012, Page 8 of 8