The Rumour Mill
12/05/11 -- News reaching Nogger Towers suggests that the shops have sold out of these in the Recar area. Officially unconfirmed reports suggest that the Ensus bioethanol refinery in Wilton, one of - if not the largest - wheat bioethanol refineries in the world which only went into production early in 2010 will be "moth-balled" for "2-4 months" around the end of the month.
It would seem that with UK wheat prices now at well over GBP200/tonne the economics of the equation of turning food into fuel clearly don't currently stack up.
There Goes The Exportable Surplus (And The Neighbourhood)
23/11/10 -- Give it a wave, there she goes, bless. At the rate we've been exporting wheat we should have just about hit our Defra target of 1.3 MMT for the entire 2010/11 marketing year by now, according to my calculations. From here on in we are eating into our 2 MMT of projected carryover. Indeed, at the current rate of exports that will also all be gone before a single field of UK wheat is combined next summer.
One can only hope that we won't approach the 2011/12 marketing year with such a gung-ho attitude to exports. We will, after all, have another hungry mouth to feed in the shape of Vivergo by then.
Further down the line we have little Vireol expected to arrive on the scene in 2013. Whereas Ensus and Vivergo are big strapping lads, consuming over a million tonnes each of our surplus wheat, Vireol is more like Tom Thumb. His little calipered legs mean he can only manage to get half as much down his neck before he's full.
So there you go, by 2013/14 we won't have an exportable surplus at all in the UK, not unless we ramp up wheat production that is. Still, at least we can all rest in our beds at night resplendent in the knowledge that the planet is safe. The three new arrivals will be churning out more bioethanol than we can shake a mucky stick at by then.
Well, not quite, by 2020 you see the UK is mandated to have 10% of it's motor fuel coming from renewable sources. That's around 6 billion litres of the sort of stuff that our mates at Ensus, Vivergo and Vireol will be manufacturing. The problem is at these rates of wheat consumption they only have a capacity to produce around one billion litres between the three of them
What? We will be using up 2.5 MMT plus of wheat annually to make just one sixth of our renewable fuel requirement? That's the way it looks from where I'm standing. So what's the alternative then? Build another fifteen similar sized bioethanol refineries by 2020 and use the entire UK wheat crop to make it? The entire east coast of England would be awash with refineries, and think of the smell. There would go the neighbourhood along with the exportable surplus.
Nah, we can't do that can we, here's the solution....we'll ship in what we can't manufacture ourselves from Brazil. That's right, we'll save the planet by cutting down the Brazilian rainforest to grow sugar cane to ship bioethanol to Europe in enormous great belching boats.
Erm, couldn't we just say that we've had a bit of a rethink and this renewable fuel mandatey thingy probably wasn't thought through properly and we've changed our minds? Nah, don't be silly, there's too much money riding on this one, press on as you were....
Abengoa Rotterdam Ready To Rumble
Abengoa's flagship Rotterdam bioethanol refinery is set to start production this week, according to media reports.
The plant is slightly larger in size than Ensus and will churn out 480 million litres of bioethanol, if and when it gets up to running at full capacity. Abengoa themselves are saying that they expect to be running full tilt as early as June.
Although the company list the feedstock as "grain" I gather that this means "wheat normally". Hurrah, that's another 1 MMT+ of surplus wheat taken care of.
The plant will also kick out 360,000 MT of DDGS, according to the official company website. That's a lot more DDGS on the European market, maybe we aren't going to miss Bunge Mannheim as much as we thought come the autumn? I wonder if they've put in a pelleting press to allow the by-product to more easily "travel"? Answers on a postcard please to the usual address.
EU Bioethanol Plants Under Construction
I stumbled across this interesting list of bioethanol plants currently under construction in Europe today which I thought you might find interesting (capacity in million litres per annum):
Country Company Capacity Feedstock
Bulgaria Euro Ethyl GmbH (Silistra) 30 Maize
Crystal Chemicals 13
Denmark Dong Energy (Kalundborg) 17.6 Straw,
wheat
France Roquette (Beinheim) 35 Wheat
Germany Wabio Bioenergie (Bad Köstritz) 8.4 Waste
ESP Chemie GmbH 140
Hungary First Hungarian Bioethanol Kft 90 Maize
Lithuania Bioetan 100 Cereals
Netherlands Abengoa (Rotterdam) 480 Wheat
Nivoba BV (Wijster) 100 Cereals
Slovenia Slovnafta (Bratislava) 75 Wheat
Spain Biocarburantes Castilla & Leona 5 Ligno-
cellulose
SNIACE II (Zamora) 150 Wheat
Alcoholes Biocarburantes Albiex 110
UK Ensus plc (Teesside) 400 Wheat
Vivergo (Hull) 420 Wheat
The Bioethanol Beast Is Amongst Us
Vivergo Fuels - the illegitimate love-child of an incestuous relationship between BP, British Sugar and DuPont - say that it's new plant at Saltend is expected to be in production in the summer of 2010, taking in 1.1mmt of UK wheat and spitting out 420 million litres of bioethanol and up to 500,000mt of by-products (including some wet).
Vivergo have signed exclusive contracts with grain marketing business Frontier to procure all of the wheat for its feedstock. Under a similar agreement, animal feeds supplier KW Trident will market all the resulting co-products.
That's what we call a nice level playing field there then. Anyone for a game of Monopoly?
For more info dial Saltend 666.
Work starts on GBP200m Saltend bioethanol plant
FWi -- Construction work has started at the site of a new GBP200m bioethanol plant in Saltend, near Hull. The plant, which will take 1.1m tonnes of mainly UK-grown wheat, is a joint venture between Associated British Foods (45%), BP (45%) and DuPont (10%), called Vivergo Fuels.
All regulatory approval and funding is in place and preparatory groundwork at the 25-acre brownfield site is almost complete, Vivergo managing director, David Richards says. "We're now moving on to the next stage of construction and are on target to start producing ethanol in summer 2010. It's fully equity funded, so all funding is in place."
Frontier will be the exclusive grain supplier, taking grain from over 1000 growers, and trading director Jon Duffy says the firm is already talking to farmers to develop growing regimes that ensure wheat supplying the plant is grown in a sustainable manner. Ultimately, you need to grow for maximum yield to reduce the carbon footprint, but we are also looking at all other aspects of production.
This grower protocol is likely to be included within contracts, details of which have not been drawn up, he says. The bulk of grain will be for harvest 2010, or drilling in autumn 2009, so we're still a year or so away from offering contracts. We haven't confirmed what varieties will be used, but high-yielding, starchy feed-type wheats will obviously be preferable.
Mr Duffy stresses that wheat supplying the plant will not detract from supplies going into existing food customers. Most will come from Yorkshire and Lincolnshire and is grain that would have otherwise been exported from Hull and Grimsby, he says. Even with this plant and another [ethanol plant] on Teeside, there will be an exportable surplus of wheat in the UK it's more a case that the patterns of grain movement are changing.
We want to source wheat from UK growers, and for 90% of the time, that will be the case. The only time we may have to buy in grain is when the UK has a poor harvest.
Mr Richards welcomed some findings of the recent Gallagher Review, particularly the focus on sustainability and reducing greenhouse gas emissions, but said the slow down of targets was counterproductive.
Counterproductive to who or what Mr Richards? Counterproductive to you raking in a mountain of profit in an industry that is 100% reliant on governmental policy to make it viable all in the name of saving the planet perhaps? Two hundred million quid is a lot to spend on an industry that could be worthless before the plant is even finished at the stroke of a pen in Whitehall - Nogger
Wheat prices unlikely to affect bioethanol plant - Oh really
From that bastion of knowledge the Darlington & Stockton Times, it seems like it's good news all round:
The region's first bioethanol plant is on schedule to start production early next year.
John Pinkney, technical director of Ensus, told farmers that building work was going well at Wilton on Teesside.
The plant will use 1m tonnes of wheat a year to produce 400m litres of ethanol for Shell and about 400,000 tonnes of high protein animal feed by-product.
The site is on target to be commissioned in the first quarter of 2009 and in full production by the middle of the year.
Mr Pinkney told the NFU's North-East regional livestock board that he did not believe today's high wheat prices of about £190 a tonne would affect their plans.
He said: "We don't expect the price will be the same when we open, our expectation is that the price will have fallen back."
However, he was relieved that funding for the project had been raised before today's financial volatility which has led to the mothballing of some plants in Europe.
Mr Pinkney said the animal feed by-product was "a very important part of the package", which many had forgotten about. (But not astute people like you Mr Pinkney eh - Nogger).
Only one-third of the crop - the sugars and starches - is used in ethanol production. Another third produces carbon dioxide, which is captured and used as a co-product, and the final third is turned into distilled dried grains plus solubles (DDGS) - the high-protein animal feed.
Most of the DDGS would be dried but some wet product may be available to local farmers.
The DDGS would not only provide a valuable feed, but could also replace a large amount of soya, which is currently imported from South America and Brazil.
That in turn could reduce the amount of forest clearance in those countries and relieve pressure on land elsewhere.
The DDGS would be available from April next year and is expected to cost between £185 to £225 a tonne - it is always likely to lie between the cost of wheat and soya.
Footnote: Thanks for explaining that for us Mr Pinkney. Despite the fact that your new factory adds 1mmt of extra demand for wheat in what isn't, lets face it, the hot-bed of UK wheat production, you expect the price to fall back. Meanwhile you expect the price of the by-product to hold up well in, lets face it, what is not the hot-bed of the UK livestock industry. An industry that is contracting by the minute.
Right then, who would like to tender to take some of these distillers grains at around £200/tonne for 12 months hence? Come on, we've only got 400,000mt to sell then that's yer lot. It's got to be done via a tender because we'll be inundated with demand. And don't forget soya prices will be the same then, Mr Pinkney has already told you that. And by buying them you will be saving the Brazilian rainforest to boot. Hello, this line seems to have gone dead...
