New ethanol market developments, legislation and trading were just some of the themes analysed at this year’s Argus Biofuels conference.
The conference, which is taking place in London at the Jumeirah Carlton Tower over three days, focused on the topic of ethanol on 17 October, 2017.
Mark Chesworth, CEO at UK-based bioethanol producer Vivergo Fuels, gave an overview of the global markets in bioethanol. He said: “The supply and demand situation has been relatively static around the last two-to-three years. “This has been driven by the ongoing political uncertainty we have seen across the markets.
“We have continued to procrastinate on those next steps, favouring big policy announcements in five years’ time rather than focusing on the things that we can do today. We continue to see the good being made the enemy of the great. There seems to be a lack of definition on what we need to do to decarbonise transport from ‘here to there’ rather from ‘there to there’.”
However, Chesworth maintained that a lot was happening in the European biofuels market on “the demand side”, especially in relation to an increase in biofuel blending mandates in the Netherlands, Finland, Romania and Portugal.
On the supply side, Chesworth mentioned the end of sugar production quotas in the EU, which came into force on 1 October, 2017. Producers can now decide how much beet goes to sugar and how much to ethanol. This means that there could be more sugar-based ethanol produced this year compared to last year.
He added that it was unclear what impact the EU’s decision to significantly lower anti-dumping duties from Argentina will have on the market. Chesworth also explained that anti-dumping duties in the US were due to expire in 2018.
Elsewhere, on the sidelines of the conference, Chesworth told Biofuels International that he was hoping that E10 (90% petrol and 10% ethanol) gets launched in the UK by October 2018.
He explained: “The Department for Transport (DfT) is looking to bring together an E10 working group.
“A cross-industry group of stakeholders will consider what information the consumers need and ensure any fears that they may have are allayed. We need to ensure that computability isn’t an issue and ensure what future taxation looks like.
“We will agree what the steps are from now until October 2018. This could include vehicle testing and a communications campaign. We have to question the labelling regime (labelling of petrol pumps). What will this look like?”
He said the labelling system will be changing over the next few months.
He cited Germany’s recent roll out of E10. The audience heard how the roll out happened negatively because of a negative tabloid press campaign against E10. However, “in Belgium, they rolled out in January and it has gone seamlessly well”.
Chesworth said the UK will be drawing on the lessons on what has been done well and what has not.
Separately, there was a panel discussion during the morning of the conference. Moderator Josefine Ahlstrom, vice president at Business Development at Argus, asked the question: “Does anyone care about first-generation biofuels?”
In response to the question, Timo Huhtisaari, sustainability and biofuels expert at Neot, said: “The ethanol market development hasn’t really developed much in Europe. At the same time, there is still hope. We have to say ‘what could it deliver if we actually tapped its potential?’ From the car manufacturers’ side, it provides much more octanes on the fuel. If we compare biodiesel GHG savings and bioethanol GHG savings, ethanol performs much better on average than biodiesel.”
In relation to phase two of the Renewable Energy Directive (RED), he added: “The negotiations in Brussels are happening all the time. I believe the 7% cap will remain as it is. You need to demonstrate that you have a low-ILUC risk feedstock. At the end of the day we are trying to reduce GHG.
Stephen Walsh, broker at Starsupply, said: “We have just had a year where (German biofuels producer) CropEnergies had fantastic results and so did many other European producers. We had a record 18 months for margins for European ethanol. I am not sure where the doom and gloom is coming from. There are rocky waters ahead due to the legislative environment. However, the reality is that if you haven’t made money as a European ethanol producer, you need to shut the doors because ethanol margins have been fantastic.”
This is story was written by Liz Gyekye, editor of Biofuels International