The wait is finally over. The USDA has relaunched the Biomass Crop Assistance Program and is once again accepting applications from biomass conversion facilities (BCFs), including biomass power and thermal plants.&nbsp;
 The redesigned program substantially reduces the list of eligible fuels, imposes new and complex rules, and may have limited funding and longevity. Despite these changes, the updated BCAP presents strong opportunities for conversion facilities to gain access to new fuel sources and to build more robust supply chains. A solid understanding of the new rules and administrative procedures is essential for conversion facilities and producers to benefit fully.
 Birth of BCAP and the 2009-&rsquo;10 Pilot Program
 The 2008 Farm Bill created BCAP to encourage the use of otherwise wasted biomass materials for energy and to stimulate interest in new crops for renewable energy feedstocks. The program was designed to meet these goals through a matching payments component for existing fuel sources and establishment payments and annual payments component for new energy crops.
 USDA, through the Commodity Credit Corp. and Farm Service Agency, initially implemented a pilot version of the matching payments component.&nbsp; Launching the program in 2009 in quick response to a presidential directive to aggressively accelerate biofuel production, USDA did not issue detailed requirements on how biomass materials needed to be produced, collected, harvested or separated from higher-value material. The guidelines also did not require BCFs to purchase eligible materials at fair market value.
 Many biomass facilities benefited from the initial program by negotiating lower fuel prices with suppliers, who then received matching payments to make up the difference. The program, however, negatively affected other industries by distorting feedstock prices for mulch, fiberboard, nursery media, and other products.&nbsp; A report recently issued by USDA&rsquo;s Inspector General also found that the pilot program&rsquo;s brisk implementation led to &ldquo;wide-ranging problems&rdquo; in its operation.&nbsp;&nbsp;
 In February 2010, USDA suspended the program and issued a new proposed rule, allowing matching payments for existing contracts through the end of March 2010. During the pilot program&rsquo;s short life, USDA paid approximately $244 million in matching payments.
 USDA received more than 26,000 comments on the proposed regulations, which delayed release of the final rule until October 2010. On Dec. 14, 2010, FSA published new documents and began accepting applications from BCFs to become &ldquo;qualified.&rdquo; All previous certifications of facilities were revoked. FSA also published documents for the establishment of Producer Areas. Documents and procedures are still being established in early 2011.
 New BCAP Rules
 The new BCAP rules include greater restrictions on what qualifies as eligible biomass and how that material is collected and harvested, as well as requirements for demonstration of sustainable agriculture and forestry practices. The new rules also implement the Project Area program of the 2008 Farm Bill, providing incentives to establish energy crops.
 Matching Payments: FSA will make matching payments of up to $45 per dry ton for eligible fuel delivered to a registered BCF. Eligible fuels must be collected directly from the land, and cannot be collected from another facility.&nbsp; For example, bark stripped from trees in the forest is eligible if the bark is delivered directly to the BCF, even if the wood from the trees goes to another use; bark stripped from trees at a wood processing mill is ineligible because it did not come directly from the land. Similarly, agricultural materials must be picked up directly from the land and transported to the BCF. Corncobs from an ethanol plant are not eligible, but corn stover collected in the field is eligible. Materials that have an existing market in a given area may be ineligible for matching payments. For example, bark is an eligible material unless there are already markets for bark mulch and other products within the geographical area of the BCF. Eligibility is determined by local FSA agents, who must determine whether a given feedstock had a local market as of Oct. 27, 2010.
 The following materials are not eligible for matching payments: Title I crops (such as corn and soybeans); animal, food and yard waste; and algae. Although Title I crops are not eligible, waste from Title I crops, such as corn stover, is eligible.&nbsp; The yard waste exclusion is broad enough to exclude all urban forestry materials.&nbsp;
 The matching payments are to be made at the fair market value of the feedstock.&nbsp; BCFs will be required to maintain lists of all biomass purchases, both from eligible materials owners and sellers who are not participating in BCAP. The arm&rsquo;s length requirement of the original program has been removed, allowing payments between affiliates.&nbsp;
 Perhaps the most complex aspect of the new BCAP rules is the sustainability requirement. Crop residues require a conservation (or equivalent) plan registered with FSA, while forest materials require a forest management, stewardship or equivalent plan. Forest materials must be taken during operations to reduce fuel hazards, remove invasive species or improve forest health. This should not be a major impediment, as sound forest management improves forest health. Material from Federal lands cannot include wood that has timber, lumber or pulp value; material from private lands is not subject to this restriction, but is still subject to the existing markets condition. Some clarification from FSA offices may be required concerning eligibility of forest materials.
 Otherwise eligible material delivered to a BCF may nevertheless fail to qualify for matching payments if the material owner fails to register with the local FSA office before delivery; the material owner fails to provide documentation, including a receipt for payment and an assessment of the material&rsquo;s moisture content; the biomass delivered contains ineligible material; or for a number of other reasons, such as supplying false information.
 Because payments are made on a dry weight basis, actual measurement of moisture content of the delivered material is required. CCC reserves the right to amend the list of eligible fuels.&nbsp; Establishment and Annual Payments: A major goal of BCAP is to mitigate risks that prevent producers from entering the biomass market. Implementation of the establishment and annual payments provisions of BCAP is intended to provide incentives for producers to enter the market. Producers of energy crops, along with the potential consumers of their products, may apply to the FSA to create a Project Area located near a BCF. All approved producers within that Project Area can qualify for matching payments for up to 75 percent of the establishment of an energy crop, and ongoing payments for up to five years for herbaceous perennials and 15 years for woody plants.
 Producers who are registered participants in a Project Area are still able to get up to two years of matching funds for delivery of biomass to the conversion facility associated with the Project Area. In addition, producers in a Project Area who are not participants in the project are eligible for matching payments. The rules regarding eligibility for Project Area approval and establishment and annual payments are stringent. Potential Project Area participants are encouraged to contact their local FSA office as soon as possible to begin discussions of eligibility.&nbsp;
 The final rule states that a producer will enter into a contract with CCC to commit acres to establish and produce an eligible crop. These contracts are intended to promote the production of a long-term source of biomass feedstock that can be harvested in a reasonable period of time. The contracts will take into account the appropriate establishment period for a specific crop. The expectation is that at least one harvest for biomass delivery to the conversion facility will take place within the period of the contract.
 Is the New BCAP Worth the Effort?
 Although substantially more restrictive than the original, the revised program is clearly designed to achieve the original intent of BCAP:&nbsp; to bring more biomass fuel to market and to provide incentives for the creation of supply chains and new energy crops. Despite the new regulations&rsquo; complexities, participation in BCAP provides significant opportunities for BCFs. In most areas of the country, there is a significant lack of capacity within the supply chain, and an unwillingness of producers to establish energy crops. BCAP can help overcome these supply limitations.
 Under the original trial program, BCAP simply lowered the price of fuel for conversion facilities. The new program instead provides a strong price incentive for suppliers to accept the risks of changing their operations in order to provide fuel to biomass facilities.
 The new matching payments program can help bring new eligible biomass material producers and harvesters off the sidelines and into the biomass energy supply chain. For instance, matching payments may turn some waste products previously too expensive to otherwise collect and harvest for energy usage into economical fuel sources. Matching payments can also open up new biomass fuel supplies that were otherwise too far away to use economically due to higher transportation costs.&nbsp;&nbsp;
 Although qualifying BCFs will have to purchase these new sources at the fair market value of similar materials, more fuel sources can help create a larger and more flexible fuel market, possibly providing BCFs more stable fuel supplies. Some plants also can benefit from blending additional biomass types together. Although vendors receiving matching payments cannot charge below-market rates to undercut their competitors, matching payments could indirectly lead to lower prices through greater competition.&nbsp;&nbsp;
 The new BCAP also allows qualifying BCFs and/or their affiliates to constitute eligible material owners that may receive matching payments. This change could create new opportunities for biomass plant owners to become their own fuel suppliers.&nbsp;
&nbsp;&nbsp;&nbsp; As with any new agricultural policy, there are still some uncertainties about the implementation of BCAP. Some uncertainties will be quickly resolved by FSA, but others may take some time. Communication with your local FSA office may help answer questions.&nbsp;
 Major Budget Concerns Remain Potential BCAP participants need to be aware of concerns regarding adequate funding and continued authorization.&nbsp;
&nbsp; BCAP is currently operating under a continuing resolution funding the federal government only through March 2011. Additional congressional action will be required to fund BCAP for the remainder of FY 2011 and FY 2012.&nbsp;&nbsp;
 Congress also must decide whether to authorize&mdash;and fund&mdash;BCAP beyond FY 2012. If BCAP fails to attract a sufficient number of energy crop producers, Congress may be less inclined to extend the program beyond FY 2011.
 Conclusion
 Although portions of BCAP have been scaled back substantially from the pilot program, the final rules still provide significant opportunities for making new biomass materials economically viable for energy usage. Would-be participants need only bone up on the rules, get to know their local FSA agents and ready themselves for a vigorous pursuit of those opportunities. Authors: Daniel Simon Partner, Ballard Spahr LLP. <a href="mailto:SimonD@ballardspahr.com">SimonD@ballardspahr.com</a> Tom Kimmerer Senior Scientist, Moore Ventures LLC <a href="mailto:tom.kimmerer@mooreventures.com">tom.kimmerer@mooreventures.com</a>

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Potentially eligible and ineligible fuels are listed under BCAP. Otherwise-eligible fuels become ineligible if a) they are not collected and processed on the land, or b) the local FSA office determines that there are pre-existing markets for the mate

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The redesigned Biomass Crop Assistance Program may have some shortcomings when it comes to funding and longevity, but it still provides significant opportunities for making new biomass materials economically viable for energy production.

BCAP Relaunch Should Bring New Biomass Producers into the Supply Chain

The solution to some of America&rsquo;s most pressing environmental, energy and economic challenges can quite literally be found at our feet. Sustainable harvesting of forest renewables (woody biomass) is &ldquo;preventive medicine&rdquo; for our forests, helping limit the number and severity of forest fires, reducing the habitat of destructive insects to help ensure that the healthiest trees thrive, and promoting the growth of healthier, stronger trees. In addition, it offers struggling communities a much-needed, new revenue stream and other social benefits.
 As an energy source, forest renewables may still be relatively new, but they have unlimited potential. Forest renewables come from several sources, including:
 &bull; Residues and byproducts from wood processing mills and pulp and paper mills.
 &bull; Residues from logging and site-clearing operations.
 &bull; Biomass from fuel treatment operations to reduce forest fires.
 The USDA and the U.S. DOE estimate 368 million dry tons of sustainably removable biomass can be produced from U.S. forestlands per year.1 Harvesting it represents substantial environmental, social and economic opportunities, particularly for rural forestry communities.
 Fewer and Less Catastrophic Forest Fires
Excessive dead, dry material that has accumulated in our forests poses significant wild land fire risks. Over the past 10 years, these fires have consumed more than 49 million acres of forest in the United States alone, and federal agencies have spent more than $8.2 billion fighting them. Removing forest renewables could help save millions of acres of forest and billions of taxpayer dollars spent battling forest fires.&nbsp;
 According to Danny Dructor, executive director of the 10,000-member American Loggers Council, harvesting forest renewables can go a long way toward reducing that destruction and expense. &ldquo;The impact of forest fires is greatest in the Western states,&rdquo; he points out. &ldquo;If we could take that biomass off the forest floor, the understory and small-diameter trees that really have no market value as timber, we could reduce the fuel that feeds those fires. And I&rsquo;m convinced we could reduce the number and the severity of the catastrophic wildfires that we&rsquo;re seeing.&rdquo;
 Reduced Insect Infestation
 In addition to decreasing fuel for potential fires, harvesting forest renewables also reduces habitat and food for destructive insects such as the mountain pine beetle, which thrives in overstocked areas and kills healthy trees.
 According to the U.S. Forest Service, 2.5 million acres of pine trees in Colorado and Wyoming were affected by the mountain pine beetle epidemic between 1996 and 2008.2 The Natural Resources Defense Council also released a report in July on the dead and dying high-elevation forests in Idaho, Montana and Wyoming. Within these regions, aerial photographs have documented 1 million acres of whitebark pine forest dead or dying from the mountain pine beetle and, to a lesser extent, an invasive fungus. One of the report&rsquo;s authors, Wally Macfarlane, has stated that another million acres of whitebark pine forest are at risk.3
 Harvesting forest renewables can not only reduce insect food and habitat, but it can also thin forests to promote the growth of healthier trees, which are better able to resist infestation, grow to their full potential and contribute to a healthier environment.
 Compatible With Forest Service 
 Recognizing the value of sustainable harvesting of forest renewables, the U.S. Forest Service began implementing its Woody Biomass Utilization Strategy4 in 2008. The program includes harvesting dead trees in 19,000 acres of forests to help reduce the threat and impact of wildfires and prevent further spread of beetle infestation.
 Cody Neff, owner of West Range Reclamation of Crawford, Colo., is happy to be part of that strategy. Neff has been involved in ecosystem management for more than 10 years, working with a wide variety of federal, state and environmental agencies such as the National Park Service, the Bureau of Land Management, Colorado&rsquo;s Division of Wildlife and State Forest Service and the Nature Conservancy. In 2009, the Forest Service awarded his company a 10-year forest stewardship contract that includes reducing hazardous biofuels in Colorado&rsquo;s Arapaho, Roosevelt and Pike-San Isabel National Forests.
 &ldquo;Most of our forests are dangerously loaded with hazardous fuels, including understory and beetle-infested trees,&rdquo; Neff says. &ldquo;Wildfire has historically played an essential role in the natural development of our Western ecosystems, but today&rsquo;s wildfires are not those of the past. They are much more dangerous and devastating. Unhealthy forests are also much more susceptible to disease and insect epidemics, which in turn create even more fuel for wildfires. Sound forest management, including sustainable harvesting of renewables, can help conserve the Western landscape that we all value so much.
 Neff has personally witnessed the positive effect this harvesting can have in limiting a forest fire. &ldquo;A fire broke out near Boulder, Colo., just two weeks after we had removed diseased trees and understory from what had been a particularly dangerous area,&rdquo; he says. &ldquo;The fire had escalated into the canopy, but when it reached our treatment area, the limited understory enabled firefighters to put it out. It was more than gratifying to see the good that had resulted from our work&mdash;the forest that was saved because of it.&rdquo;
 Economic and Social Benefits
 Harvesting and converting forest renewables to energy can provide a solution to some of the country&rsquo;s most pressing economic and energy challenges. These benefits start by making use of logging slash, which is typically left to waste on the forest floor or simply collected and burned. An associate professor of forest operations at Auburn University&rsquo;s School of Forestry and Wildlife Sciences, Tom Gallagher has studied the issue and understands its short- and long-term potential.
 &ldquo;The &lsquo;low-hanging fruit&rsquo; right now is logging slash,&rdquo; Gallagher explains. &ldquo;Millions of tons of this material are available every year without impacting other markets, and it only makes sense to capitalize on this opportunity. Is woody biomass really something we can use to produce energy in a sustainable way? Absolutely. Further research is needed to make biomass harvesting and processing more efficient. But I have all the confidence in the world that with collaborative efforts by all the stakeholders&mdash;government, landowners, loggers and markets&mdash;we can make world-changing use of this sustainable material.&rdquo;
 The ALC&rsquo;s Dructor sums up the problem and the opportunity this way: &ldquo;Most timber-dependent small communities are facing upwards of 20 percent unemployment. By developing energy from woody biomass, we can create new markets, new opportunities and new jobs. We can revitalize rural economies and help kids who are growing up in small communities remain in those communities by providing high-paying jobs.&rdquo;
 Healthy forests rely on sustainable forest management, which includes the removal of excess biomass. Sustainable harvesting of forest renewables represents an important new step in the overall strategy of sustainable forest management.
 To learn more about the importance of harvesting woody biomass, visit the John Deere-sponsored website www.woodybiomass.com. 1Biomass as Feedstock for a Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-Ton Annual Supply, U.S. DOE and USDA, 2005. 2, 4U.S. Forest Service Woody Biomass Utilization website, www.fs.fed.us/woodybiomass 3Macfarlane/Logan/Kern. Using the Landscape Assessment System (LAS) to Assess Mountain Pine Beetle-Caused Mortality of Whitebark Pine, Greater Yellowstone Ecosystem, 2009: Project Report, 2010. Author: Mike Schmidt Manager of Forestry Renewables, John Deere Construction &amp; Forestry Division <a href="mailto:schmidtmike@johndeere.com">schmidtmike@johndeere.com </a>

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Harvesting woody biomass is “preventive medicine” for our forests and just what the doctor ordered for timber-dependent communities.

Harvesting Forest Renewables Sustainably

Our theme this month was somewhat difficult to tackle because even though the potential for growing energy crops is great, there are virtually no commercial-scale planting sites yet. This will probably be the case until farmers start to see some economic benefit in planting energy crops.
 As we often note, the chicken and egg dilemma is at work here. Developers want to have a guaranteed fuel supply while growers need a rock-solid market before they will plant. This will only be solved by someone taking a leap of faith that the industry will develop and be successful.
 That&rsquo;s where incentives such as the Biomass Crop Assistance Program come into play. The way the program is set up for energy crops should make it more profitable for farmers to add energy crops into their rotations. But, a couple of issues with the BCAP need to be addressed before that will happen. One concern is the amount of money that will be available for the program and how many projects it will be able to support. Another issue is the duration of the program, as it is part of the 2008 Farm Bill, which must be reauthorized in 2012. There is much talk from lawmakers that the Farm Bill will need to be cut substantially to make it past deficit hawks. This could also affect the first concern, which is the amount of money appropriated to fund the program.&nbsp; For more information on this important federal program, see &ldquo;BCAP Relaunch Should Bring&nbsp; New Biomass Producers into the Supply Chain&rdquo; on page 38.
 While the questions posed above cannot be answered today, there are other issues involving energy crops that Biomass Power &amp; Thermal associate editors were able to explore, including energy crop production on marginal lands, the potential for growth into 2050 and companies that are building up their businesses to supply energy crops.&nbsp;
 I should also mention that BBI International's 2011 International Biomass Conference &amp; Expo is coming up May 2-5 in St. Louis. If you haven't registered already, be sure to do so at www.biomassconference.com.

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Homegrown Energy  

The de facto standard for converting biomass to heat and electricity is combustion in a high-pressure boiler system. From a thermal perspective, this is the simplest and most reliable technology. Biomass is simply combusted and the heat is used to boil water to high pressure through a heat exchanger. The air and biomass inputs to the boiler are easy to control and provide a wide tolerance range for flow deviations. A little too much or too little air flow affects peak combustion temperature but does little to the overall thermal energy transferred to steam.
 Environmental concerns and the desire to convert carbonaceous fuels to liquid fuels are refocusing research back to an old technology that was supplanted by boiler systems. Gasification was once used extensively to produce &ldquo;town gas&rdquo; from coal, to pipeline to homes and streetlamps for lighting and cooking in the 1800s. The technology was labor-intensive and dirty, but produced industrial quantities of tars and coke, around which whole industries revolved, converting these wastes into salable products. Electricity and natural gas, both cleaner and more economical, supplanted town gas in the 1900s.
 The resurgence of gasification technology is focusing on producing high-value chemicals and fuels, in addition to cleaner and more efficient power plants utilizing both gas turbines and steam turbines. The fundamentals of gasification have not changed, however.
 What has changed to make it a viable technology once again is advancements in economical gas-cleaning technologies. At the Energy &amp; Environmental Research Center, industry is partnering with government to develop, test, and commercialize clean gasification technologies.
 The EERC has designed and constructed a wide range of gasifier technologies, including fixed-bed, fluidized-bed, and entrained flow-gasifiers, to meet the needs of different segments of the energy industry. Innovative fixed-bed and fluidized-bed gasifiers have been used to test and develop systems that operate on wood, grasses, turkey litter and sewage pellets. Both fluidized and entrained-flow gasifiers have tested the viability of cogasifying biomass and coal for integrated gasification combined-cycle plants.
 The know-how in utilizing biomass fuels in gasifiers is constantly being improved. In addition, different system configurations and operating conditions are constantly being applied to employ alternative downstream gas cleanup and conversion technologies, such as ceramic filters, gas membranes, fuel cells, microturbines, ammonia catalyst and Fischer&ndash;Tropsch reactors.
 Each segment of the energy industry has a unique set of economic, environmental and operating constraints that dictate the type of gasifier used and system configuration.
 Biomass, in particular, poses challenging constraints that differentiate it from the more economical and developed coal gasification systems. The distributed nature of biomass and variable chemical and physical compositions of biomass require a much higher degree of outside-the-box thinking to develop not just the technology, but also a matching business model that gives value to potential customers.
 Systems are currently being developed and tested to utilize internal combustion engines, high-temperature fuel cells, and microturbines to produce power and heat from biomass. Since biomass is highly distributed by nature, the primary approach at the EERC is to develop sub-megawatt-sized systems and business models that can be economically employed at the source of biomass production, eliminating the high costs of transporting the biomass to a centralized power station.&nbsp;
 In the upcoming months, articles will be provided to Biomass Power &amp; Thermal magazine summarizing some of the benefits and challenges of each of these systems tested at the EERC. Author: Phil Hutton Research Manager, Energy &amp; Environmental Research Center (701) 777-5204 <a href="mailto:phutton@undeerc.org">phutton@undeerc.org</a>

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The Reemergence of Gasification  for Energy and Fuels

While energy crops alone won&rsquo;t secure a fossil fuel-free planet, they do represent an enormous opportunity to curb our dependence on harmful fuels. Experts predict these crops will contribute significantly to the world&rsquo;s renewables portfolio in the not-too-distant future, but obstacles currently blocking market penetration make growing or using energy crops a risky endeavor.
 Daring though it may be, the potential is hard to ignore. Using imaging assessment models, research has indicated that in the year 2050, energy crops worldwide could supply about 400 exajoules of energy per year. For those not familiar with that enormous quantity, an exajoule represents 1018 joules. In a newer analysis, more conservative estimates peg the realistically achievable potential for energy crops by 2025 at between 2 and 22 exajoules per year.
 These and other research figures have been compiled in one study to evaluate the current status of energy crops and their conversion technologies, assess their potential to contribute to global energy demand and climate mitigation over the next few decades, and examine their potential for the future. The study, &ldquo;Energy crops: current status and future prospects,&rdquo; suggests that realizing the massive potential of energy crops will require optimizing&mdash;not maximizing&mdash;dry matter and energy yield per area of land through the latest biotechnological routes.
 &ldquo;The idea of putting this study together was to pull together all the information on what we know so far; what potential we might get, and how much energy we can generate in this sector,&rdquo; says Pete Smith, one of the five study authors and professor of soils and global change at the University of Aberdeen&rsquo;s School of Biological Sciences in Scotland. &ldquo;Biomass and bioenergy won&rsquo;t fulfill all energy needs, but will be part of the portfolio.&rdquo;
 Exa-energy
 In this energy-dependent world, as developing countries get richer, their demand for energy will grow. &ldquo;We can&rsquo;t possibly supply all of their energy with fossil fuels,&rdquo; Smith says. &ldquo;So we&rsquo;re going to need to rely on renewables and there is no one renewable technology at the moment that can meet our energy needs.&rdquo;
 Globally, biomass currently provides about 46 exajoules of energy in the form of combustible biomass and wastes, liquid biofuels, renewable municipal solid waste, solid biomass, and gaseous fuels, the study says. Increasing current biomass potential will require changes to agricultural and forestry production, and the active growth of dedicated energy crops. &ldquo;We&rsquo;re starting to plant energy crops now, but if you look at where we are globally, the proportion of energy that&rsquo;s generated from dedicated energy crops in most countries that have a large biomass supply, that tends to be quite small,&rdquo; Smith points out. It&rsquo;s likely that bioenergy cropping systems of the future will have primary, secondary and even tertiary uses, propelling bioenergy systems into mainstream markets, according to the study.
 In addition, dedicated energy crops have not undergone the centuries of improvement that characterized major food crops, so there&rsquo;s still plenty of room to grow. &ldquo;Many of the energy crops we&rsquo;re starting to use, like miscanthus and switchgrass, we&rsquo;ve only really started to use them,&rdquo; Smith says. &ldquo;We haven&rsquo;t had many years of selective breeding or even genetic modification with these crops. So I think there&rsquo;s a great potential to increase yield in the future as we find better genotypes and better ways of managing the crops.&rdquo; In the U.S., the study&rsquo;s authors cite, long-term breeding of switchgrass is beginning to produce large yield gains that will continue to improve. And hopefully other energy crop improvements won&rsquo;t be far behind.
 But the U.S. isn&rsquo;t in the region that tops the list of technical energy crop potential in 2050. Instead, South America takes a powerful lead with an estimated 189 exajoules per year, followed distantly by central Africa with 86, according to the study. The regional breakdown of the potential of about 400 exajoules is based on an imaging assessment model that estimates the technical potential of industrialized countries, which includes the U.S. and Europe, at 30 exajoules. Latin America&rsquo;s estimated potential for 2050, divided into two regions, is 200 exajoules; Africa&rsquo;s is 145 and divided into five regions; and China, divided into four regions, has a technical potential of 21 exajoules.
 South America also comes out on top in estimated area available for biomass production in 2050, at 0.63 gigahectares, or 630 million hectares (1.6 billion acres). Again and not surprisingly, central Africa comes in second with 280 million hectares, according to the model, and industrialized nations will have an estimated 100 million hectares.
 The study also takes into account future technologies that will enable extraction of other useful products from energy crops. In fact, the ability to extract high-value products first with the lower-value residues being used for energy production would most likely make energy crops more economic, it says.
 But the main driving force behind energy cropping uptake will be social and environmental benefits such as carbon sequestration opportunities, job creation, support for rural communities, pride and independence, improved social cohesion, and of course reduced dependency on imported oil, the study concludes. Future opportunities for energy crops include development of biorefineries, atmospheric carbon scrubbing, and the growing trend toward small-scale distributed energy systems, it predicts.
 Stumbling Blocks
 But as tremendous potential sits on the horizon, barriers to energy crop market penetration loom, including practical difficulties to biomass projects such as: the public&rsquo;s perception of the technology as dirty; the challenge to secure biomass fuel supplies; high demand for water and nutrients by some energy crops; and difficulties for conversion plants in achieving economies of scale. Besides that, though, other obstacles such as competition for land also stand in the way, along with the current power generation and distribution infrastructure. And there&rsquo;s the ever-present policy and incentives issue.
 &ldquo;I think policy would be a barrier,&rdquo; Smith says. &ldquo;In many areas, there&rsquo;s no market penetration because it&rsquo;s just not economical for growers to invest in energy crops.&rdquo; Smith speculates that might be because of risk, the fact that energy crops don&rsquo;t fall under their expertise, or maybe because energy crops are less flexible then annual crops. Whatever the reason, relatively small areas of energy crops are being grown. &ldquo;Policy could certainly play a part in that, either by providing guaranteed pricing for the products, or it could provide guaranteed markets in conjunction with the energy users.&rdquo; Subsidies, tax breaks and other economic measures could be a strong force behind an expansion of the global energy crop sector. &ldquo;I think that would make the difference between relatively small market penetration and a really quite substantial uptake,&rdquo; Smith says.
&nbsp;
Uplift for Uptake&rsquo;s Sake
 To encourage energy crop uptake in the U.K., the Department of Energy and Climate Change announced in March 2010 an increase of half a Renewables Obligation Certificate (ROC) for dedicated energy crop technologies. The U.K.&rsquo;s Renewables Obligation is banded by technology type and provides incentives in the form of ROCs per megawatt hour to a multitude of renewable technologies. Dedicated energy crops now receive two ROCs, while cofired energy crops still receive one. &ldquo;The DECC decided it wanted to support energy crops and was looking to stimulate the energy crop sector,&rdquo; says Tricia Wiley, spokesperson for the U.K.&rsquo;s Renewable Energy Association.&nbsp; Other biomass technologies receive between 1.5 and 2 ROCs.
 Strangely, though, the DECC left energy crops out of the technologies considered eligible for grandfathering into the Renewables Obligation banding, which is reviewed every four years, sometimes amending ROC levels. They sit outside the category with cofiring, bioliquids, and combined heat and power. &ldquo;Unlike contracts for regular biomass, we did not receive any evidence that long-term 15- to 20-year contracts for energy crops could be delivered,&rdquo; the DECC explains. Energy crop prices are still variable and the DECC fears grandfathering could mean over- or under-compensating, Wiley says.
 Some members of the REA, however, argue that grandfathering energy crops would be beneficial for investment purposes. &ldquo;There are still quite a lot of capital costs and things like that that go into arranging a contract and setting up to grow energy crops,&rdquo; Wiley says. &ldquo;So they felt that grandfathering was needed to ensure investment in that. I think they were quite disappointed it wasn&rsquo;t grandfathered.&rdquo;
 Many energy crop farmers agree. &ldquo;That&rsquo;s one of the reasons why the power stations have not gotten financial closure and have not started procuring that stock,&rdquo; says Jonathan Scurlock, chief advisor of Renewable Energy and Climate Change for the U.K.&rsquo;s National Farmers&rsquo; Union. &ldquo;Until those plants break ground, they won&rsquo;t send anyone out to secure contracts with farmers.&rdquo;
 The U.K. has about 10,000 hectares planted with energy crops, miscanthus being the most common, and also incentivizes them through its Energy Crop Scheme, part of the Rural Development Programme in England. The scheme issues establishment grants for approved energy crops, designed to cover a percentage of the set-up costs, including ground preparation, fencing, purchase of planting stock, planting, weed control and first-year cutback. The program only lasts until 2013, however, and Wiley says there is no talk yet of extending it.
 &ldquo;We&rsquo;re almost moving away now nationally from a situation of planting grants because they don&rsquo;t seem to have worked very well,&rdquo; Scurlock says. Between 2002 and 2006, the program issued flat grants of &pound;1,000 ($1,500) per hectare, roughly half of the total planting cost. But after coming back in 2007, it now works off a formula to determine grant amounts. Farmers also have to prove the amount they&rsquo;ve spent in order to be reimbursed. &ldquo;It&rsquo;s an administrative nightmare,&rdquo; Scurlock says, adding that the government has been underwhelmed by the amount of interest the scheme has attracted. &ldquo;Establishment grants were a good first step, but it&rsquo;s not the ultimate solution to building this supply chain.&rdquo;
 Now, the DECC has proposed a new program to support renewables as well as low-carbon technologies. Electricity Market Reform will work in parallel to the RO through a feed-in tariff beginning in 2013 or 2014, according to Wiley. The government has proposed, however, that all new technologies fall under Electricity Market Reform instead of the RO by the year 2017. Therefore, the DECC must decide by then whether to grandfather the remaining technologies, including energy crops, into the RO banding. In the U.S., the USDA&rsquo;s Biomass Crop Assistance Program is designed to drive investment and interest in energy crops, but has hit some walls. Still, many agree that with the proper amendments, the program&rsquo;s matching payments to farmers for biomass material could be an effective driver to spur development.
 Whatever programs do the job, it seems governments all over the world need to step up incentives for energy crops if we&rsquo;re ever going to realize the 400 exajoule-per-year potential. While that&rsquo;s not the only change needed, it could be one of the most important.
 But Smith doesn&rsquo;t like to compare progress across oceans and explains that Europe and the U.S. have different anomalies to bear. &ldquo;There are different challenges and probably both the U.S. and European Union have a long way to go to get in policies that encourage sustainable use of bioenergy and biofuels,&rdquo; he says. &ldquo;There&rsquo;s significant progress to be made on both sides of the Atlantic.&rdquo;
 Author: Lisa Gibson Associate Editor, Biomass Power &amp; Thermal (701) 738-4952 <a href="mailto:lgibson@bbiinternational.com">lgibson@bbiinternational.com</a>

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OVERCOMING BARRIERS: Energy crop market penetration is being stymied by several issues including availability of ample biomass fuel supplies and high demand for water and nutrients for some crops. 

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Multiple studies tout the potential of energy crops to contribute to a fossil fuel-free lifestyle. But barriers block the path in most countries treading it.  

Powerful Crops

Running a biomass business is hard work these days, between managing your feedstock and off-take, dealing with environmental issues and worrying about financing. But, now, thanks to an unexpected holiday gift from the National Labor Relations Board, you may get to post information on helping your work force unionize.&nbsp;
 On Dec. 22, the NLRB issued proposed regulations requiring employers to post notices informing employees of their rights under the National Labor Relations Act, including the right to form and join labor unions. These proposed regulations are significant both procedurally and substantively and apply to union and nonunion employers. The proposed rule will apply to all private employers within the NLRB jurisdiction. This excludes airlines, railroads and other industries covered by the Railway Labor Act. Other than the traditional "mom and pop" stores, the proposed rules would cover most employers, regardless of the number of employees.
 The NLRB has been in existence for 75 years. Only once has the board issued substantive regulations. That was in 1974, when it enacted regulations establishing appropriate bargaining units in the health care industry. Today&rsquo;s action, coupled with the recent issuance of a memorandum from the board&rsquo;s Acting General Counsel indicating that the board will be more aggressive in enforcing employee and union rights during organizing campaigns, suggests that the board is likely to take additional steps to facilitate union organizing.
 Under the proposed regulations, private employers must post a notice which is &ldquo;at least 11 inches by 17 inches,&rdquo; with the color and type size and style as required by the board. The notice must be physically posted &ldquo;in conspicuous places, including all places where notices to employees are customarily posted.&rdquo; Employers that have significant numbers of employees who are not proficient in English, will also be required to post the notice in their native language. The posting will be provided by the NLRB. Recognizing that many employers customarily communicate with their employees electronically (via email, posting on an intranet or Internet site), the proposed regulations also require the use of those methods to provide the notice to the employees. Even more astounding, the proposed regulations would require that the electronic notice include a link to the NLRB&rsquo;s website. In addition, an employer that has a significant number of employees who are not proficient in English, will be required to provide the electronic notice in their native language (as provided by the board).
 Employers who fail to make the required posting either physically or electronically will be subject to sanctions. The proposed sanctions include finding the failure to post as an independent unfair labor practice, tolling the statute of limitations for filing unfair labor practice charges, and using the failure to post as evidence of anti-union animus in unrelated unfair practice charges. Currently, the statute of limitations under the National Labor Relations Act is six months. By &ldquo;tolling&rdquo; that period, the statute of limitations would be unlimited in duration.
 The NLRB is required to publish the proposed regulations for 60 days to accept comments before they can become permanent regulations. Given the political composition of the board and other actions that the board has recently taken, it is very likely that the final regulations will look similar to the proposed regulations.
 Additional information on the regulations can be found at www.nlrb.gov. Employment and labor problems can make life difficult and the NLRB has kindly just added another issue for you to be concerned about in the new year. Authors: Karen G. Schanfield and Richard A. Ross Shareholders, Fredrikson &amp; Byron&rsquo;s Employment &amp; Labor Law Group <a href="mailto:kschanfield@fredlaw.com">kschanfield@fredlaw.com</a> and <a href="mailto:rross@fredlaw.com">rross@fredlaw.com</a>

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Happy Holidays from the  NLRB—Now Post This

Hunton &amp; Williams adds partners Hunton &amp; Williams LLP expanded its energy and project finance practice with the addition of Gregory F. Lang and Michael J. Madden as partners in the New York office. The two have a diversified transactional practice focused on project finance, private equity mergers and acquisitions, project development and leasing. They join Hunton &amp; Williams from Edwards Angell Palmer &amp; Dodge LLP. Lang focuses on representing developers, institutional investors, private equity funds and independent power producers in connection with the development, financing, and acquisition of domestic and international energy and infrastructure projects. Madden&rsquo;s experience includes a variety of complex structures relating to constructing, financing, and acquiring and disposing of power, natural gas and other energy assets.
 Clyde Bergemann opens Indonesian sales hub With the establishment of Clyde Bergemann Indonesia (CBIA) the company is increasing its business potential in Indonesia, Malaysia, Singapore and the Philippines. The Jakarta-based office is led by Managing Director Agustinus Tjhay, who has a degree in mechanical engineering and a master&rsquo;s of business administration from universities in Taiwan and the U.S. Before joining Clyde Bergemann, he worked in the pulp and paper industry. John Cannon, sales manager, has worked with Clyde Bergemann for many years and is familiar with the energy market in Southeast Asia with more than 14 years of experience. CBIA will start out with four employees and add more as the business develops.
 Capstone Turbine releases ultralow-emission microturbine system Capstone Turbine Corp. has released the CR200 low Btu microturbine product that meets challenging global emission requirements, including California's stringent Waste Gas Emission Standard. Landfill applications are a key market for the Capstone CR200 200 kilowatt renewable energy product. Waste gas typically refers to gas that is produced by the biological breakdown of organic matter. Producing energy using gas from these applications, that is otherwise flared, avoids the need to use nonrenewable resources such as coal, oil or natural gas to produce an equivalent amount of energy. Certification to the waste fuel emissions standard by the California Air Resources Board makes approved technologies such as the CR200 easier to site in California&mdash;often avoiding any local air permitting.
 EPI to provide renewable energy system to Rollcast Energy Products of Idaho has been selected to provide a state-of-the-art green energy system for the Piedmont Green Power project in Barnesville, Ga. The EPI advanced staged gasification system is designed to convert biomass materials into 480,000 pounds per hour of superheated steam at 1,005 degrees Fahrenheit and 1,500 pounds per square inch for the 53.5 MWe net renewable energy application. Zachry Industrial Inc., a subsidiary of Zachry Holdings Inc., is the engineering, procurement, construction contractor for the project. EPI&rsquo;s fluidized bed technology has been utilized to handle hundreds of renewable biomass fuels and many other traditional and nontraditional fuels, such as agricultural wastes, municipal wastes and cattle manure.
 Bandit&rsquo;s Model 2290 adds mobility to land-clearing operations Building on the success of its towable Model 2290 whole tree chipper, Bandit Industries announced the addition of the Model 2290 Track to its line of self-propelled whole tree chippers and grinders. Driving the 2290 Track is a Caterpillar 315L undercarriage, featuring a track shoe width of 600 millimeters and an approximate ground pressure of 6.3 pounds per square inch. A larger Caterpillar 320L undercarriage is optional. Despite its compact size, the Model 2290 Track offers a 20-inch diameter capacity with a 30-inch weld-on tray as standard equipment. The 2290 Track features a large 24.5 x 26.25-inch chipper opening, a high-capacity stationary discharge system, and a variety of engines.
 CW Mill Equipment carrying a new brand CW Mill Equipment Co. is offering ArmorHog screens, tips, hammers and other replacement parts for all brands and models of industrial grinders. ArmorHog provides custom-made hammer mill screens and grates for all brands, configurations, and models of grinders and for grinder tips, bits, strikers and replacement hammer heads. ArmorHog uses the highest quality parent metal in all of its forgings and has its own blend of carbide called NitroGrit, a proprietary blend of carbide found to best suited to grinding applications. NitroGrit can be applied in any custom pattern and is available in a variety of grit levels.&nbsp;
 Bonine joins BinMaster Level Controls as sales manager BinMaster Level Controls announced Scott Bonine has joined the company&rsquo;s sales team as a sales manager for its line of point and continuous bin level sensing devices. Bonine will support the expansion of BinMaster&rsquo;s distributor network both domestically and internationally by developing new territories, recruiting distributors, providing product training, and customer sales call support. Bonine has almost 15 years of sales experience in the level controls industry, where he has been responsible for developing and supporting sales through a worldwide distributor network.
 AMC elects new officers The American Wood Council elected new officers during its annual meeting in Chicago in November. Serving for a one-year term are Chairman Joe Patton of The Westervelt Co., First Vice Chairman Brian Luoma of LP, and Second Vice Chairman Fritz Mason of Georgia-Pacific LLC. Marc Brinkmeyer of the Idaho Forest Group is the immediate past chairman. The AWC board added one new member and retained several others. George Emmerson of Sierra Pacific was newly elected to serve on the board. Returning members include: Rob Taylor of Weyerhaeuser, Andrew Miller of Stimson, Pat Patranella of Temple-Inland, Maureen Frisch of Green Diamond, James Rabe of Masonite, and Diana Blenkhorn, representing the Canadian Wood Council.
 Michigan entrepreneurs create renewable energy company Dan Kuipers and Kyle Denning recently formed Sustainable Energy Financing LLC to focus on promoting project financing and financial advisory services for renewable energy projects throughout the world. As part of the company launch, SEF will be acquiring grant-writing firm, Viability, based in Holland, Mich. The acquisition includes Nairobi, Kenya-based Viability Africa LLC, which Denning co-founded with Viability earlier this year. Currently the company is working on multiple renewable energy projects utilizing a wide variety of technologies, including wind, solar and biomass. These projects are aided by the wide array of SEF&rsquo;s financing services such as grant and tax incentive acquisition, carbon credit development and market consulting, and environmental commodity aggregation and trading.
 Tri-Mer offers breakthrough catalyst filter technology Tri-Mer Corp. has announced a significant advancement in the control of nitrogen oxide (NOx) at temperatures as low as 350 degrees Fahrenheit. UltraCat Catalyst Filters provide up to 95 percent NOx removal at the operating temperatures of most industrial boilers. Dioxins are also destroyed by the catalyst at 97 to 99 percent efficiency. For carbon monoxide (CO), a successful strategy for meeting the boiler Maximum Achievable Control Technology is to tune boiler combustion to lower the CO output. While this can increase NOx production, the additional NOx is easily removed by the UltraCat filters. UltraCat Catalyst Filters are a low-cost solution for boiler MACT compliance, for low temperature NOx control, and for the efficient removal of particulate matter, sulfur dioxide, hydrogen chloride and dioxins.&nbsp;
 Martin Engineering introduces adaptor for OEM conveyors A new conveyor idler aligner featuring a safe and effective method to manually fine-tune original equipment manufacturer-style self-adjusting idlers has been introduced by Martin Engineering. The Martin Idler Aligner ensures precise adjustment, using a handle and comb for course modification, with slots for finer tuning. Proper alignment is an important factor in a conveyor system, as a misaligned belt can cause uneven wear, belt/structure damage and material spillage. The aligner bracket mounts to most manufacturers&rsquo; self-aligning idlers, allowing for broad application. To improve safety, the design eliminates the need to tie off idlers to the surrounding structure, and the locking bar features a hole for padlock placement to restrict access and handle movement.

Gary F. Lang will focus on developing, financing and acquisition of energy and infrastructure projects. 

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Michael J. Madden has experience working with complex structures relating to construction, financing and acquiring, and disposing of energy assets. 

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TRACK CHAMPION: Bandit's Model 2290 whole tree chipper is compact but can cover a wide area.


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Scott Bonine will develop new territories, recruit distributors and provide product training for BinMaster.

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DOWN THE LINE: Martin Engineering's idler aligner improves safety and ensures proper alignment of conveyor systems.

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Business Briefs

On the heels of multiple studies, statements and letters warning of the detrimental effects of the U.S. EPA&rsquo;s Greenhouse Gas Tailoring Rule that went into effect Jan. 2, the agency has announced it will defer for three years the rule&rsquo;s permitting requirements for biogenic carbon dioxide emissions.&nbsp;
 Implementation of the rule as written was likely to keep up to 30 states from realizing their renewables goals, according to &ldquo;Economic Impact Analysis of EPA Greenhouse Gas Tailoring Rule,&rdquo; a study released in December by Forisk Consulting and commissioned by the National Alliance of Forest Owners. According to the same study, the rule had already contributed to stalled investments in at least 23 near-term projects and would have put 134 at risk for cancellation or delays.
 By July 2011, the EPA will complete the deferment rulemaking and during the three-year period, will continue to analyze the issue through independent studies. Subsequently, the agency will issue a second rulemaking that determines how biogenic emissions should be treated or counted under GHG permitting requirements.
 &ldquo;With EPA's commitment to defer regulation of greenhouse gases from biomass combustion in federal air quality permitting programs for at least three years, larger new and existing biomass combustion projects will avoid significant portions of those programs,&rdquo; says Brian Patterson, associate and senior consultant with Golder Associates Inc. &ldquo;In most cases, this will reduce the capital and operating costs of these projects.&rdquo;
 Without the exclusion of biogenic emissions, the Tailoring Rule would also have reduced renewable electricity generation in the country by 5,384 megawatts; removed 53.4 million tons of woody biomass from the renewable energy marketplace; cost between 11,844 and 26,380 renewable energy jobs; and reduced investment in renewable electricity generation by $18 billion, according to the Forisk study. &ldquo;For us, the biggest number there is the capital because everything else flows from that investment,&rdquo; says Brooks Mendell, lead author of the study. &ldquo;Eighteen billion dollars capital is a function of the cost associated with these projects that have been announced and have not yet been built.&rdquo;
 Bob Cleaves, president and CEO of the Biomass Power Association, has pointed out many of the same concerns since the rule was initially released in June 2010. &ldquo;The agency&rsquo;s statement that certain biomass &lsquo;such as waste materials whose inevitable decomposition will result in greenhouse gas emissions anyway&rsquo; confirms what we at BPA have known all along: the use of wood waste materials and agricultural residues for biomass energy have a beneficial carbon impact and should be embraced as a renewable energy source,&rdquo; he says.
 American Forest &amp; Paper Association President and CEO Donna Harman also weighed in on the deferment immediately after its announcement, saying the treatment of biomass emissions like fossil fuel threatens beneficial investments in biomass energy upgrades at paper and wood products mills throughout the country.
 The Biomass Thermal Energy Council says it will be working with the EPA as it goes through the rulemaking process.
 "Over the next three years, BTEC will work to maintain an open dialogue with EPA and provide it with the information needed to meet its requirements responsibly and accurately under the law," said BTEC Executive Director Kyle Gibeault. "The EPA's most recent announcement on biomass&mdash;combined with its petition to reconfigure the Boiler MACT rule&mdash;is evidence that the agency is appreciating the critical role that biomass can play in addressing America's economic and energy challenges."
 EPA Administrator Lisa Jackson says the agency will move forward with the Tailoring Rule in a way that is scientifically sound and manageable for both biomass producers and consumers.
 &ldquo;At the end of the day, something has to get implemented and it has to be practical enough that these projects can move forward, if the goal is really to increase energy from renewable sources,&rdquo; Mendell says. &ldquo;If that&rsquo;s the goal, then you need to ask yourself, &lsquo;How do these rules affect that?&rsquo;&rdquo;
 &mdash;Lisa Gibson

BIOGENIC BREAK: The EPA will defer permitting requirements of the Tailoring Rule for biogenic sources for three years. 


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EPA seems to have listened to the concerns surrounding its Tailoring Rule, and has announced a three-year deferment of compliance for biogenic sources.

Tailoring Triumph

A Chilean water utility will install a GE Jenbacher biogas engine as part of a wastewater treatment plant expansion and effort to clean up the municipal water supply along the Mapocho River near the capital city of Santiago. Elsewhere, a leading waste-to-energy developer in the Philippines inaugurated the country&rsquo;s first landfill gas power plant in December, also using a GE Jenbacher biogas engine.
 With such installations all over the world, GE has a unique view of the global biogas industry and can offer a snapshot of its trends and growth. The company&rsquo;s global marketing leader, Michael Wagner, says wastewater treatment and landfill gas applications have been booming in Western Europe for the past 10 to 20 years. &ldquo;Meanwhile, we see this trend that these applications become global, driven by trends to reduce greenhouse gas (GHG) emissions and to utilize renewable and alternative energy,&rdquo; he says.
 Wagner sees significant growth in the 27 European Union member countries, driven by the region&rsquo;s goal to reduce GHG emissions by 20 percent and increase renewable energy consumption by 20 percent by the year 2020. Specifically, the number of biogas applications is increasing quickly in countries such as France and the U.K. In most European countries, the biogas boom stems from good incentives such as feed-in tariffs, and green certificates. &ldquo;Investors need incentives and a long- or mid-term guarantee that over the payback time the investment will be feasible,&rdquo; he says, adding that the U.S. needs similar incentives before it can realize meaningful growth.
 Germany, for instance, has some of the best incentives in place to spur biogas project development, and therefore sees bigger growth in the industry, he cites. The country has more than 5,000 biogas production plants in both rural and urban areas, creating tens of thousands of jobs, according to the Environmental and Energy Study Institute. The industry flourishes there because of a carbon tax, carbon cap-and-trade-system and feed-in tariffs.
 Besides the EU, significant development is taking place in Southeast Asia, Wagner says, but not because of beneficial incentives. &ldquo;There, it&rsquo;s simply the availability of biomass,&rdquo; he explains, citing a tremendous amount of organic waste streams.
 Because of the logistics of biomass feedstock, the applications GE has contributed toward are small and decentralized, around 1 megawatt, avoiding significant fuel transportation issues. Wagner expects the EU biogas industry to continue to grow, but also sees tremendous potential for anaerobic digestion systems in the U.S., as demand increases. &ldquo;We see a trend in the U.S. with increasing [interest] in decentralized power,&rdquo; he says.
&mdash;Lisa Gibson

GAS GUZZLERS: GE has sold biogas engines to companies all over the world, including this milk company in Ukraine.

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GE's global reach gives it a bird's eye view of biogas industry trends.

Biogas Growth

Developers looking at Wisconsin as a home for biomass projects now have an easier way to obtain information about the state&rsquo;s current use and availability of resources.
 The Wisconsin Bioenergy Information and Outreach Network has launched an interactive online atlas to help utilities and municipalities assess forest biomass supply potential, give entrepreneurs access to supply and technology networks, and provide policymakers with statewide information on bioenergy and environmental resources.
 The mapping tool was developed by UW-Madison Land Information and Computer Graphics Facility, UW-Extension, the Wisconsin Bioenergy Initiative and the Energy Center of Wisconsin. The atlas is free and users can select data useful to their interests and use mapping tools to zoom into an area to display and query the results. Categories include existing biofuel producers (pellet, ethanol and biodiesel), agricultural and forest-based resources, potential biomass cropland, political boundaries, and utilities and transportation methods such as landfills, roads, transmission lines, natural gas pipelines and railroads.
 Troy Runge, director of the Wisconsin Bioenergy Initiative, says funding for the atlas initially came from several state sources, but the groups are continuing to look for additional monies to improve and sustain the idea. If additional funding is achieved, planned future phases of the project would add an online marketplace for suppliers, aggregators, buyers and consultants to conduct business.
&mdash;Anna Austin

Wisconsin groups develop bioenergy atlas.

Mapping it Out

When burned by a sugar mill, bagasse, the fibrous material leftover after juice is extracted from sugarcane, usually produces enough electricity to power all of the mill&rsquo;s operations and then some. For every 10 metric tons of sugarcane crushed, a sugar factory produces nearly 3 metric tons of wet bagasse.
 Many mills across the globe that take advantage of bagasse for power are making improvements to their plants to make the whole process more efficient. Mackay Sugar in Australia&mdash;the largest producer of sugar on the continent&mdash;is currently constructing a $120 million cogeneration power plant at its Racecourse Mill in Queensland that when complete in 2012 will be able to provide about one-third of the Mackay city region&rsquo;s electricity requirements.
 The project, which Mackay has been working on for several years, involves the replacement of traditional boilers that are designed to incinerate bagasse, with a more efficient high-pressure boiler and a new steam turbine generator, capable of generating 36 megawatts (MW). While providing power and steam for the Racecourse Mill and refinery, it will also allow for the export of 27 MW to the grid. Mackay&rsquo;s proposed energy model is similar to that of U.S.-based Florida Crystals, which has always used bagasse to power its sugar mills using internal boilers in its mills, says Gus Cepero, company vice president and head of its energy program. &ldquo;In 1995, [we] took the process a step further when we built the New Hope Power Co. biomass cogeneration plant, which utilizes high-pressure boilers to produce steam for the sugar mill and refinery as well as electricity that the company supplies to the Florida power grid.&rdquo;
 Cepero says that Florida Crystals&rsquo;s biomass power plant, the largest in North America, uses 800,000 tons of sugarcane bagasse and 700,000 tons of urban wood waste each year. Since the sugarcane milling process does an excellent job of preparing the bagasse for combustion, not much else needs to be done to the bagasse so it is sent directly from the discharge of the milling plant to the boilers by conveyor belt.&nbsp; &ldquo;Once at the power plant, the necessary volume of bagasse is fed to the boilers and the excess is conveyed to the fuel yard,&rdquo; Cepero says.
 Because the New Hope power plant operates at a high level of thermal efficiency, a significant volume of bagasse is stored at the end of the sugarcane grinding season, typically from mid-October to mid-March, according to Cepero. &ldquo;The New Hope power plant operates year round, therefore the stored bagasse is used the remainder of the year,&rdquo; he says.&nbsp;
 Utilizing a slightly different business model, a California company is growing sugarcane not for the production of sugar, but for the sole purpose of creating fuel and energy. California Ethanol &amp; Power is growing sugarcane in California&rsquo;s Imperial Valley that it will harvest and convert into 66 million gallons per year of advanced biofuel, and utilize the bagasse to generate 50 MW of electricity, according to Dave Rubenstein, business development manager.
 Each facility will also house an anaerobic digester that will produce 880 million cubic feet of pipeline quality biogas, Rubenstein says. Right now, the company is growing a few hundred acres of sugarcane that will be used for seed purposes. &ldquo;Those will be harvested and replanted to increase our acreage to have enough for our first plant, for which we&rsquo;ll need about 60,000 to 70,000 acres,&rdquo; he says.
 Of the 8.8 tons of sugarcane required at each plant per day, about one-third will consist of bagasse that will be converted into power. &ldquo;It&rsquo;ll be more of a direct process, but we&rsquo;ll have some storage available to make sure the plant is running on a continuous basis,&rdquo; Rubenstein says.
 Although initial plans were delayed due to the financial crisis, plans for CE&amp;P&rsquo;s first plant are now underway. He says the company is currently working with a major national energy company for power off-take agreements, and hopes to have financials closed in 2011.
 While CE&amp;P&rsquo;s plan is to build three or four plants in California, Rubenstein says the company believes the process, technology and engineering could be transferred to other sugarcane growing states in the U.S. and other countries.
&mdash;Anna Austin

SUGAR HIGH: Florida Crystal's biomass plant is the largest in North America, using 800,000 tons of sugarcane bagasse and 700,000 tons of wood waste annually. 


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Sugar makers have a sweet power advantage.

Bagasse Power

The U.S. District Court for the District of Columbia has granted the U.S. EPA an extension of only one month for the final release of the Maximum Achievable Control Technology rules, a thoroughly disappointing response to the agency&rsquo;s request for a six- or 15-month extension.
 The agency asked the court for the extra time in December, citing an overwhelming number of public comments on the proposed rules, released in April. The agency made clear that it favored a 15-month extension past the Jan. 16, 2011 deadline, allowing for a reproposal and another comment period. The court first granted an extra five days to mull over EPA&rsquo;s request, then came back with the final denial and a Feb. 21 deadline.
 The MACT rules include standards for area source and major source polluters, as well as commercial and institutional solid waste incinerators. The EPA has an obligation under the Clean Air Act to regulate hazardous air pollutants from those sources and promulgated a rule in 2004 that was later vacated by the U.S. Court of Appeals. Now, in re-issuing the rules, the EPA has been feeling pressure from numerous industries and stalled energy projects waiting for boiler standards.
 &ldquo;We are extremely disappointed with the court&rsquo;s decision to not grant EPA the 15-month extension they requested,&rdquo; said Donna Harman, president and CEO of the American Forest &amp; Paper Association. &ldquo;The extension of one month falls well short of the time requested by the agency to allow a sound rule to be put forth. Regulations such as the Boiler MACT rule have far-reaching implications for communities, workers and businesses across the country. The overriding mission should be to produce a sound rule that keeps Americans healthy and employed, and today&rsquo;s decision by the court fails to give the agency what it said it needed. [The] decision invites more litigation, and ultimately everyone loses as a result of this short-sighted decision.&rdquo;
 Initially, the extension request brought hope for a new rule that would be less harmful to the biomass power industry. &ldquo;What it indicates to us is EPA realized they didn&rsquo;t understand our industry and that they want to take a step back and make sure they got the benefit of all the data that we have been sharing with them,&rdquo; said Bob Cleaves, CEO and president of the Biomass Power Association, after the EPA announced that it was asking for an extension and before the court ruling. &ldquo;I think it&rsquo;s a positive thing that they didn&rsquo;t just ram a rule through that wasn&rsquo;t based on what&rsquo;s going on out there in the real world. That&rsquo;s a significant thing for us. It&rsquo;s not just a procedural matter.&rdquo;
 The industry has been loud in its opposition to the proposed rule, which would recategorize a number of multifuel boilers as incinerators, subjecting them to strict standards limiting five hazardous air pollutants&mdash;mercury, hydrogen chloride, particulate matter, carbon monoxide and dioxin.
 The proposal prompted almost 5,000 comments, some upwards of 300 pages long, expressing discontent and highlighting errors in the fundamental data used to develop it. It sets limits equal to the best-controlled units, but flawed data essentially creates a fictitious super boiler that no one unit can match. &ldquo;They have to set the limit equal to the best controlled unit that&rsquo;s in existence,&rdquo; explains Brian Patterson, associate and senior consultant for Oregon-based Golder Associates Inc. &ldquo;They don&rsquo;t have a lot of flexibility on that, but if you&rsquo;re using bad data, it&rsquo;s based on half a detection limit instead of an actual detected value. There were just errors in the source tests and things like that.&rdquo;
 Besides updates in the numerical values, other changes Patterson had hoped to see in the final rules included a single set of emission limits, instead of categorizations by boiler type. The system essentially penalizes boiler owners for operating the most efficient and cleanest technology, says Chard Darby, another senior consultant for Golder Associates.
 Patterson would liked to have seen a minimum size threshold for compliance for new boilers, much like the 10 million Btu threshold for existing boilers. &ldquo;You could be a tiny water heater essentially and still be subject to these rules,&rdquo; he says. &ldquo;I will be amazed if EPA doesn&rsquo;t consider that and say we really never intended to regulate these little, tiny boilers with these requirements.&rdquo;
 As of press time, it was unclear what the court&rsquo;s decision would mean for the final rules, but without enough time for a reproposal, the EPA is limited on the extent of the changes it can make to the currently proposed rules.&nbsp;
&mdash;Lisa Gibson

PRESSED FOR TIME: The courts give the EPA just a month to release the final boiler MACT rules, a disappointing outcome for the biomass industry.


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The agency is allowed only a one-month extension to rework the final boiler MACT rule.

Time is Not on EPA's Side

Hoffland Environmental Inc. has operated a 1-megawatt (MW) hog waste-fuelled power generation facility on the Island of Cyprus in Europe for the past three years. Marking the company&rsquo;s U.S. debut is a second anaerobic digestion (AD) project currently underway in Fremont, N.C., near Goldsboro at White Oaks Farm.
 Chemical Engineer Guy Weismantel says the 10-acre farm site hosts about 5,500 pigs, but manure from that operation alone will not be enough meet the electrical capacity goal of 2 MW without supplementary poultry waste or manure from nearby farms. Corn silage was originally considered as a partial feedstock, he adds, but is currently too expensive.
 Hoffland is now working to firm up the feedstock requirements of the project, which will be implemented in two phases&mdash;first producing 1 MW of electricity, the second doubling capacity to 2 MW. Weismantel says when evaluating feedstock requirements, it&rsquo;s not only necessary to look at the number of animals in an operation, but also the kind and size of animals, such as farrow-to-wean. &ldquo;Animal units are important to consider,&rdquo; he says.
 A power line going through the project site belongs to an area power cooperative, with which the company is working to sell all of the electricity to the grid, Weismantel says.
 On incentives, the $15 million project is subject to receive renewable energy credits under the state&rsquo;s renewable energy and energy efficiency portfolio standard, but Weismantel says the main driver is North Carolina&rsquo;s Senate Bill 3, requiring 12.5 percent renewable electricity by 2021; 0.2 percent of that amount must be generated from swine waste by 2018, after rising each year prior. &ldquo;For the whole state of North Carolina, that amounts to about 14 MW in 2011,&rdquo; Weismantel says.
 Hoffland has also applied for Section 1603 funds, as the project qualifies as an open-loop biomass project.
 Weismantel says that what sets Hoffland&rsquo;s AD process apart from others is that it&rsquo;s a unique, three-step process that involves a certain amount of recycling of &ldquo;seed bugs&rdquo; that optimize the mesophillic reaction. &ldquo;So we are getting more biogas off the digester,&rdquo; he says. &ldquo;This gas is methane in nature and is nominally 600 Btu per cubic foot in heating value.&rdquo;
 There are a number of additional aspects that sets the process apart from other AD technologies, such as the sulfur removal system, which is undergoing patent writing, Weismantel says. &ldquo;HEI fabricates much of the equipment in its own shop utilizing and maximizing clarifier performance, manure handling, manure measurement and key process control functions that interface simplified on-line measurements to optimize performance.&rdquo;&nbsp;
 He adds that hardware and process performance complications have been ironed out during the three years of performance at the Cyprus plant. &ldquo;It has provided an excellent learning curve,&rdquo; he says.
&mdash;Anna Austin

Texas company embarks on second AD project.

Practice Makes Perfect

The Biomass Crop Assistance Program has taken some major hits over the past couple of months, but the USDA Farm Service Agency has continued to release documents necessary to get the program rolling again.
 In mid-December, the federal omnibus spending bill proposed to cut all expenses to administer BCAP in 2011, which would have essentially ended the program. While the omnibus was withdrawn due to lack of support, BCAP&rsquo;s fate in the&nbsp;next spending bill&nbsp;is still up in the air.
 Meanwhile, at the request of the FSA, a report was released by the USDA Office of Inspector General that evaluated the initial pilot program version of BCAP's collection, harvest, storage and transport (CHST) matching payments program, which was terminated in February after $243 million was spent. OIG&rsquo;s review focuses on the efficacy of processes and controls FSA used in implementing the program. Based on a review of 12 county office operations in four states, and overall administration of the program at the national office, OIG found wide-ranging problems in how the CHST program was operated. These included inconsistent application of program provisions across state and county offices, varying methods for measuring biomass moisture levels, inconsistent use of program forms and data errors.&nbsp;
 OIG determined that the problems occurred because FSA, in an effort to quickly implement the program to comply with a deadline established by presidential directive, didn&rsquo;t have adequate time to develop a handbook, specialized forms or a computer support system suited to the specific requirements of the CHST program. &ldquo;Due to these problems, FSA implemented a program that encumbered the efforts of its field-level personnel and resulted in inequitable treatment of program participants, improper payments, and reduced scope for oversight and accountability,&rdquo; the report says. To correct the problems, OIG recommends that FSA develop a program-specific handbook and forms, and a program-dedicated data system. OIG plans to provide a full report with greater scope and detail.
 If the omnibus doesn&rsquo;t cut 2011 funding, the next hurdle BCAP will face is maintaining funding in the 2012 Farm Bill, and whether that will happen is unknown. Daniel Simon, partner in Ballard Spahr&rsquo;s business and finance department and an energy and project finance group member, says it is a matter of whether the new Congress will view the program as a worthwhile investment that helps both renewable energy and agriculture, or as a subsidy program that should be cut to address the budget deficit.
&mdash;Anna Austin

It has been an eventful few months for BCAP.

BCAP Recap

Brazil has more than 100 years of experience with eucalyptus biomass fuel, but Dow Chemical Co. will be the first in the chemical/petrochemical industry there to utilize it.
 Dow has signed an 18-year supply agreement with Energias Renovaveis do Brazil, which will invest, install and operate a 13-megawatt plant next to Dow&rsquo;s Aratu Complex in the Bahia State in northeast Brazil. The plant, which will replace natural gas-fired boilers, will supply 100 percent of steam requirements for the Aratu site&rsquo;s propylene oxide and propylene glycol operations and 30 percent of the requirements for the chlor-alkali and hydrochloric acid production units.
 Dow and numerous other Brazilian companies chose eucalyptus because Brazil has enormous resources to grow and use the tree for bioenergy. It is the world&rsquo;s largest producer of eucalyptus, and the Bahia State is one of its most productive areas.
 &ldquo;Over the past four years, fuel prices have increased sharply in Brazil and biomass provides a proven, abundant and secure source of low-carbon energy,&rdquo; says Doug May, vice president of Dow Energy &amp; Climate Change. The use of eucalyptus is attractive not only in Brazil, but also in Latin America and other regions, he says. In addition, Energias Renovaveis do Brazil has three projects under development in the Bahia State, and ongoing studies into three more possible projects.
 For its Aratu Complex, ERB is establishing a 9,500-hectare (23,475 acres) eucalyptus plot about 150 kilometers (93 miles) from the site, to be used for fuel purposes. ERB will be responsible for planting and managing the plantation, and harvesting, transporting and chipping the wood logs. ERB will invest about $90 million in the plant, which should begin operation in 2013. The cogeneration facility will reduce carbon dioxide emissions at the site by 180,000 metric tons annually, and save 200,000 cubic meters of natural gas per day, May cites.
 Not only does eucalyptus represent a massive bioenergy opportunity in Brazil, but experts say it also has potential in the Southern U.S. In fact, David Nothmann, vice president of business and product development with ArborGen LLC, says eucalyptus represents the greatest potential of any hardwood tree to produce large amounts of biomass in the Southeast U.S. Eucalyptus is purpose grown on plantations for biomass in almost 100 countries because of its rapid growth rate and ability to withstand climate extremes, disease and insects, according to ArborGen.
 And the tree can hold its own against other renewable energy options, according to May. &ldquo;Traditional alternative energy sources such as wind and solar cannot provide the necessary heat in the form of steam needed at Aratu,&rdquo; he says. &ldquo;With sufficient local supply, woody biomass is an ideal renewable solution.&rdquo;
&mdash;Lisa Gibson

BIOMASS IN BRAZIL: Dow's Aratu Complex will begin using eucalyptus feedstock in 2013, adding to a multitude of other Brazilian companies utilizing the resource. 

2011/01/12959739279851.jpg

Dow will begin to use eucalyptus in Brazil, as the country continues to make meaningful use of the tree in its bioenergy sector. 

Eucalyptus Utopia

As Massachusetts develops new renewable portfolio standard (RPS) qualifications, the commonwealth could be positioning itself as the most unwelcoming to biomass projects in the country, leaving developers, foresters, laborers and biomass proponents concerned about the future of the industry.
 The Massachusetts Department of Energy Resources is months overdue on issuing its final draft of rule changes, determining which projects qualify for the state&rsquo;s 20 percent by 2025 RPS and receive renewable energy certificates (RECs). Without RECs, biomass projects are not economical. The DOER previously released drafts of proposed rule changes, including a 60 percent efficiency standard and a limit on the amount of forest wood that can be used: 15 percent of the weight of all forest products. The changes stem from a push against state regulatory agencies by opposition groups trying to stop the use of biomass to produce renewable energy.
 The proposed rules stipulate that if a biomass power plant can reach 40 percent efficiency it will receive half an REC, ratcheted up to one full REC upon reaching 60 percent efficiency. From a developer&rsquo;s perspective, even 40 percent can be a daunting hurdle.
 Dwayne Breger, director of renewable and alternative energy development for the DOER, had expected the agency to file final rule regulation in January.
&mdash;Lisa Gibson

The commonwealth's final RPS qualification standards are overdue.

A “Biomess” in Massachusetts 

While it&rsquo;s generally hypothesized that energy crop yields on marginal lands would be lower than if planted on prime agricultural lands, lower-value acres could still represent an opportunity to supplement biomass feedstock production. Current research by multiple organizations seeks to determine whether growing certain energy crops on marginal lands is productive, efficient and economic.
 First-year yields from miscanthus plots on reclaimed mining lands in eastern Ohio show less-than-stellar results, but researchers say they don&rsquo;t indicate an inability to produce meaningful biomass on those acres. &ldquo;The first year is really insignificant,&rdquo; says Rasto Ivanic, senior director of business development for Mendel Biotechnology Inc. The company is working with Ohio-based coal mining company Oxford Resource Partners on a pilot project growing Mendel&rsquo;s proprietary miscanthus varieties on Oxford&rsquo;s reclaimed lands. The trial will establish a baseline performance to conduct studies into the potential of growing perennial grass in the nutrient-poor soil. Reclaimed lands are those where the soil has been disturbed and then reapplied, mixing up the layers with rocks, mud, clay and hollows.
 &ldquo;It&rsquo;s obvious that the performance of these plants early on in the disturbed lands is significantly lower than what we see in a more typical agricultural setting,&rdquo; Ivanic says. &ldquo;We would expect lower, more choppy performance in these areas.&rdquo; Even so, he says the trial is performing quite well. &ldquo;We certainly see a little bit less growth in these reclaimed lands, a little bit lower percentage of established plants than what we would observe in other situations but, by and large, looking at the first year of the trial data, we are happy with the way those trials established,&rdquo; he says.
 The big question, Ivanic says, is how does miscanthus grow below the surface on marginal lands? Does it establish a strong enough system to survive winter and accumulate nutrients to develop a thicker, stronger stand in the spring? &ldquo;We don&rsquo;t know yet,&rdquo; he answers. &ldquo;In a year, we&rsquo;ll be much smarter.&rdquo; Data collected from past research shows miscanthus might not need added nutrients to thrive, and some evidence suggests the plant can fix nitrogen from the air like a legume, Ivanic says. &ldquo;Now that doesn&rsquo;t mean that miscanthus may perform better on distressed lands, but for those lands that are nutritionally poor&mdash;either they&rsquo;ve been overused or just don&rsquo;t have enough nutrients&mdash;there is a hypothesis that miscanthus can, over time, improve that land,&rdquo; he adds. But not all marginal lands will be candidates for such planting. &ldquo;If I could venture a hypothesis, I would say there are certainly [marginal] lands that will be beyond reach.&rdquo;
 Growing energy crops on rocky, inconsistent soil with hollows and holes does represent new challenges and intricacies, sometimes requiring manual planting, as was the case at another of Mendel&rsquo;s marginal plots in Indiana. &ldquo;You either have a puddle of mud or you have a brick,&rdquo; Ivanic says, adding that it will translate into an inconsistent stand. &ldquo;It&rsquo;s going to be much more varied than what you might expect on a traditional agricultural rotation.&rdquo;
 While those marginal lands may be able to provide meaningful yields after further research and improvements, the focus initially needs to be on agricultural lands in order for energy crops to be a regular part of the agricultural rotation, Ivanic says. &ldquo;There certainly is a potential for marginal lands,&rdquo; he says. &ldquo;But I think we&rsquo;d be shooting ourselves in the foot if we only focused on marginal lands.&rdquo;
 Mendel also has marginal land trials in West Virginia, but has a number of non-marginal acres planted west of the Mississippi River. &ldquo;Because the hypothesis is to make this energy crop system economical, you will likely not end up planting in marginal land at the start,&rdquo; Ivanic says. &ldquo;Our trials focus on areas where we feel the economics and performance of the crop is most likely to be successful.&rdquo; The company is experimenting with land on the outside fringes of the most productive agricultural lands, as well as former cottonwood acres in the South.
 &ldquo;Most of our trials are targeting those areas, and in most geographic areas you&rsquo;ll find those acres that we would consider reasonable for an energy crop because they would represent marginal economics for corn or soy.&rdquo;
 The Meaning of Marginal 
 Besides soil nutrient content and productivity, economics are indeed a crucial determining factor in categorizing marginal lands. But the term can be confusing, according to Richard Hamilton, president and CEO of energy crop company Ceres Inc. &ldquo;I don&rsquo;t like using the word marginal,&rdquo; he says. &ldquo;It&rsquo;s marginal for what?&rdquo;
 The word is often used generally to describe acres not used for producing food crops, he says. &ldquo;I think that confuses the issue because at the end of the day, there&rsquo;s no such thing as a nonfood acre. If you show me any acre in the world that can support photosynthetic life, I will grow you a human-digestible calorie.&rdquo; Hamilton prefers the term low-rent land because all lands have a plethora of alternative uses, but factors such as drought, soil fertility and salt can make it difficult to get a high yield from traditional crops. &ldquo;Economic rents determine what the highest and best value of the land will be,&rdquo; he says, adding it&rsquo;s unlikely that energy crops will be grown on high-yielding corn land because the economics dictate corn should be grown there.&nbsp;&nbsp;
&nbsp; Ceres is forging ahead with research into a salt-tolerant trait that enables energy crops such as switchgrass to grow in salt-damaged soil. Researchers discovered the useful property while screening for other agronomic traits and began to experiment with it, increasing the salt levels. The trait was still tolerant at salt concentrations equivalent to those of seawater, which are four times higher than concentration capabilities of any other salt-tolerant trait reported in scientific literature, Hamilton says.
 The research is moving from greenhouse to field scale and is using a United States Agency for Internal Development grant to experiment with the trait in rice in India. &ldquo;If those field results are positive, then of course it holds great benefit for food crop production,&rdquo; Hamilton says. &ldquo;[The trait] is simply illustrative of the point that low-rent acres like salt-damaged acres in southern Texas or Louisiana can be put back into valuable production in a way that reduces greenhouse gas production.&rdquo;
 Still, energy crop improvement is in its early stages and will undoubtedly grow exponentially, much like improvements to food crops such as corn, Hamilton says. &ldquo;We cannot assume that yields will stay flat. We can&rsquo;t look at it through the lens of what the yields are today, but we have to look at it through the potential of what we can accomplish with modern biology, and therefore, what might the yields be five and 10 years from now.&rdquo;
 Switchgrass and Sorghum
 Ceres has a number of plots on marginal lands testing the viability of its commercialized switchgrass and high-biomass sorghum varieties, with no trait modifications in most areas, according to Frank Hardimon, director of sales for the company. Switchgrass has the natural and unique ability to grow on marginal soils because of its tremendous root system, he says. It is also a low-input crop, requiring smaller amounts of nitrogen, potassium and phosphorous than most crops, which makes it appealing for many farmers.
 &ldquo;We&rsquo;ve got a tremendous ability in the U.S. to plant these crops,&rdquo; Hardimon says. He adds that marginal lands don&rsquo;t necessarily imply smaller yields of switchgrass because there are many different kinds of the crop. It generally fairs better, though, on southern marginal lands than northern because of the heat and moisture.
 Sorghum, however, tends to produce smaller yields on marginal acres than it would on prime Midwest lands, but the crop has the advantage of being drought tolerant. The annual crop can also produce better yields in its first year than switchgrass can, at 15 dry tons per acre compared with switchgrass&rsquo;s third-year maximum of 10, he says.
 Hardimon agrees that planting energy crops on marginal lands can help increase yields for more biomass use, and incentives such as USDA&rsquo;s Biomass Crop Assistance Program, which will issue matching payments to growers, will help spur farmer interest in planting on both nutrient-rich and -poor lands.
 Pilot tests by companies such as Ceres and Mendel will help determine if and how much marginal land can be used for energy crop production, as well as whether it&rsquo;s economical. &ldquo;We&rsquo;re in the stage now where we&rsquo;re trying to establish what those economics would look like on different types of land, marginal and nonmarginal, and then we&rsquo;ll go from there,&rdquo; Ivanic says.
 Author: Lisa Gibson Associate Editor, Biomass Power &amp; Thermal (701) 738-4952 <a href="mailto:lgibson@bbiinternational.com">lgibson@bbiinternational.com</a>

2011/01/12959742539825.jpg

Rasto Ivanic, senior director of business development for Mendel, is leading research into growing miscanthus on reclaimed mining lands.

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MINING MISCANTHUS: Mendel Biotechnology is satisfied with the first-year miscanthus growth on reclaimed mining lands.

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ENERGY BY NRG: NRG Energy is growing a field of Ceres switchgrass at its New Roads, La., power generating station.

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Planting energy crops on marginal lands could offer landowners a way to supplement current yields, and multiple ongoing tests seek to determine just how viable the practice could be.

Energizing Marginal Lands

New Energy Farms Group CEO Dean Tiessen says his family-owned greenhouse vegetable production business, Pyramid Farms, has experienced dramatic changes over the past year. In response to those changes, he is switching from fossil fuels to biomass and has launched an energy crop company. For years, Pyramid Farms faced volatile heating costs. &ldquo;We were switching from bunker No. 6 oil to natural gas, back and forth, depending on what was cheaper,&rdquo; Tiessen says.
 In 2004, the company switched to woody biomass as a heat source, and finally saw some price stability. &ldquo;Switching to biomass originally changed the way we did business and made us become profitable,&rdquo; Tiessen says. &ldquo;Going back to my father&rsquo;s generation, he switched fuel all the time and each time had to invest in a different technology. In the greenhouse vegetable industry in Canada, about 40 percent of our operating budget is heat. So it can make a bad year really bad, or a good year with negative margins.&rdquo;
 Unfortunately, woody biomass utilization was a temporary fix. Utilizing waste wood as a fuel source became a trend in the region and the added demand created volatility in that market as well. &ldquo;In our region, a few greenhouse owners put in biomass combustion facilities to heat their houses and it dried up the market,&rdquo; Tiessen says. &ldquo;We were once in a position where we were getting paid to take the wood, and then all of a sudden there was a shortage.&rdquo;
 Because the North American greenhouse vegetable business is exposed to competition from all over the world, including warmer regions in Mexico and Central America, a smart and competitive energy advantage is needed to stay afloat in the colder Canadian climate.
 That prompted Pyramid Farms to produce and use energy crops to heat its tomato growing operation. Pyramid Farms currently operates about 37 acres of greenhouses in Ontario, and heats them with about 30,000 tons of biomass annually. The company&rsquo;s ultimate goal is to fully heat its operations with energy crops, and is focusing on miscanthus for now. &ldquo;Even though natural gas is currently inexpensive, we can only assume those prices are going to go back up, and the key is finding a long-term solution,&rdquo; Tiessen says. &ldquo;Purpose-grown crops were always in the backs of our minds, but the initial investment didn&rsquo;t happen until 2007. We needed a long-term feedstock supply, and we couldn&rsquo;t get a long-term supply contract for waste wood so we researched what the best crop to grow in our region would be and found that to be miscanthus.&rdquo;
 Pyramid Farms currently owns about 400 acres of miscanthus, but will need about 3,000 acres to completely heat its operations. While continuing to increase that amount, Tiessen, along with co-founder Paul Carver, have launched a new company called New Energy Farms Group.
 Lessons Learned Overseas
 The hardships Pyramid Farms faced were the driving force behind developing NEFG, according to Tiessen. The broadened purpose of NEFG, which currently has eight full-time employees and 50 to 60 background staff, is to supply products and services across the complete supply chain, from farm to end use, Carver says, often serving as the middle man or missing link in energy crop grower-to-end-user equations.
 To cover all the bases, the company has three subsidiaries: Solmass Ltd., the research sector that works to provide new cultivars and collaborates with genetics companies such as Ceres Inc. and Mendel Biotechnology Inc., and develops machinery and crop production technology; New Energy Farms Ltd., which provides farmers with a scalable and cost-effective affiliate program; and Profeedstock Ltd., the off-take agreement developer that works with end users to gain long-term feedstock supplies.
 Carver, who has a doctorate in miscanthus physiology and production, works in NEFG&rsquo;s European Union branch and is seeing the bulk of activity. His location has earned him a great deal of experience over the past 15 years, as the EU is ahead of the U.S. and other countries in energy crop development and utilization. &ldquo;In the U.K. there are a lot of dedicated power plants, and a lot of port projects are importing materials from Canada and the U.S.&mdash;plants that are 100 to 300 megawatts in size,&rdquo; he says.
 The EU is leading the pack because the country has a good combination of incentives from strong power prices for renewables and an actual carbon price, Carver says. &ldquo;In the U.K., and many countries in the EU, an obligation has been put on large power companies to reduce carbon emissions, and though they are quite strict, it&rsquo;s up to them how they do it,&rdquo; he adds.
 Carver says NEF is working to set up some of the first supply contracts with large coal plants that need to meet Renewables Obligations. &ldquo;We&rsquo;ve just had a heating obligation put into place but it&rsquo;s taken many years to do that because it&rsquo;s much harder to tell every company in the U.K. to reduce CO2 emissions from heating,&rdquo; he says. &ldquo;For electricity, if you tell 10 power companies they have to start putting out 10 percent renewable energy, it&rsquo;s much easier to implement.&rdquo;
 Policy in North America still isn&rsquo;t in place, Tiessen points out. &ldquo;As it relates to a primary producer and end user, the best incentive to get people to come off the fence is the [Biomass Crop Assistance Program], but it&rsquo;s flubbering around,&rdquo; he says. &ldquo;We feel that if it&rsquo;s not successful, or were to fall apart, it will set the industry back.&rdquo;
 While the U.S. is focused on green transportation fuels, the U.K. is more committed to renewable electricity, Carver says. That emphasis has enabled NEF to gain first-hand experience and identify the key components needed across the purpose-grown feedstock supply chain, and to identify the challenges.
 Affiliate Details 
 A common roadblock to growing energy crops is the high up-front establishment costs and delayed revenues. Tiessen and Carver say that NEF has found a way to remedy that. &ldquo;We operate affiliate schemes through NEF and show farmers how to actually lift and replant their own crops, allowing them to cut establishment costs in half&mdash;50 to 60 percent of the cost that&rsquo;s been published by academics,&rdquo; Carver says.
 NEF&rsquo;s affiliate model offers an agreement to supply growers with information they need to be successful. &ldquo;A person buys a small volume of initial material from us, and we show them how to propagate that, and expand it,&rdquo; Carver says. &ldquo;Then through Profeedstock, we can work with them to secure off-take contracts.&rdquo;
 NEF also provides advice about crop storage. &ldquo;Typically, for long-term storage it will be baled, and we&rsquo;ll help determine how to build these stacks and store them in the field,&rdquo; Carver says. &ldquo;Miscanthus can literally last for years outside once it&rsquo;s baled. If it&rsquo;s chipped, you may need to dry it down if you&rsquo;re storing it in grain storage buildings, depending on the moisture content and the ambient air conditions. For compacted fuels, if it&rsquo;s cubed, you&rsquo;ve got to make sure it&rsquo;s stored at the right temperature or it&rsquo;ll fuse together.&rdquo;
 An affiliate can also supply plant material to others. Central Illinois New Energy Farms affiliate Eric Rund grows miscanthus, but also supplies plants to others in Illinois. &ldquo;If we&rsquo;re given a new variety, we put it through our rapid propagation sites in Tipton (Georgia) for testing, and then send it out to all of our affiliates who will evaluate it to determine if they&rsquo;re interested in distributing it,&rdquo; Carver explains. &ldquo;This way, our customers have access to lots of good varieties fast.&rdquo;
 Historically, it takes five to seven years to bring new miscanthus varieties to market, but with rapid propagation techniques developed by subsidiary Solmass, Carver says it can now be done in less than two years. &ldquo;That means we&rsquo;re inside the development time frame for a new power station,&rdquo; he adds. On the end-user side, NEF will help work out the kinks. &ldquo;Typically we can&rsquo;t supply fuel at the start of a contract, and we have no means of supplying further fuel if we don&rsquo;t have enough miscanthus,&rdquo; Carver says. To solve that problem, the company has partnered with commodity trading companies to supply waste wood or wood residues initially. &ldquo;That&rsquo;s the bridge as we develop purpose-grown crops,&rdquo; Tiessen says. &ldquo;[The external biomass supply] handles year one to years four and five, then purpose-grown crops from year five to year 20.&rdquo;
 What an affiliate or grower needs to start planting miscanthus varies, whether it be plugs, roots or rhizomes. Tiessen says the best selection depends on the grower&rsquo;s intentions.
 Roots, Rhizomes, Plugs and More
 Currently NEF sells plugs, roots and rhizomes, and the cost of each differs. Plugs are the most expensive option as they are the most mature plants. &ldquo;If our customer needs to plant acreage for biomass production very quickly, the only way they can get fast multiplication is with plugs due to their higher rate of rhizome production,&rdquo; Tiessen says. &ldquo;Starting with rhizomes will be slower.&rdquo;&nbsp;
 Determining how much material a grower will need to purchase in relation to prices and volumes of biomass produced is region and climate specific, according to Tiessen. &ldquo;Production capacity ranges on cultivars, conservatively it&rsquo;s about 20 million Btu per acre [when harvesting].&rdquo; In terms of electricity, with 35 percent conversion efficiency, that equates to about 400 to 450 acres of miscanthus per megawatt.
 &ldquo;We look at the region and its capacity to multiply the plants,&rdquo; Tiessen says. &ldquo;If you&rsquo;re putting in a good, solid plug you&rsquo;ll get anywhere from 20- to 100-fold multiplication over a couple of years of production, it just depends on certain agronomy issues. Generally speaking, for every acre of plants you&rsquo;ll see a 20- to 50-fold multiplication in a short period of time.&rdquo;
 &nbsp;NEF conservatively estimates that 4,200 plants are needed per acre, or one plant per square meter, to ensure good establishment. &ldquo;If you need miscanthus in 2014, you had better be planting rhizomes today,&rdquo; Tiessen advises. &ldquo;But if the plant won&rsquo;t be opening until 2015, it&rsquo;s more cost-effective to produce your own plant material.&rdquo;&nbsp;
 &nbsp;Overall, NEF affiliates will have a leg up over other growers. &ldquo;A producer or supplier will have access to all the equipment and technology we have developed and also future technology that we think will really change how the market transacts.&rdquo;&nbsp;
 Author: Anna Austin Associate Editor, Biomass Power &amp; Thermal (701) 738-4968 <a href="mailto:aaustin@bbiinternational.com">aaustin@bbiinternational.com&nbsp; </a>

FIELD OF DREAMS: Dean Tiessen, CEO of New Energy Farms Group, has built a business around producing, harvesting, storing and supplying miscanthus for bioenergy production. 

2011/01/12959747217854.jpg

COVERING ALL THE BASES: New Energy Farms Group has three subsidiaries: Solmass Ltd., New Energy Farms Ltd. and Profeedstock Ltd. that provide everything to produce miscanthus from plant genetics to machinery development to off-take agreements. 

2011/01/12959747808429.jpg

Annualized net return in dollars per acre for different energy crops.
Michigan State University has recently carried out a study into the economics of different energy crops. The study has indicated that while Miscanthus is the most profitable crop, 

2011/01/12959752204338.jpg

COST OF PRODUCTION: The cost of planting miscanthus is higher when using plugs, but the plants multiply faster.

2011/01/12959756145418.jpg

Established by a family-owned greenhouse vegetable business, New Energy Farms plans to wear several hats in the global miscanthus energy market.

Full Service Energy Farm 

A month ago, as I wrote the January issue&rsquo;s Editor&rsquo;s Note, the fate of the U.S. biodiesel tax credit was uncertain while the lame-duck Congress worked on a monster tax bill that included the subsidy. But we&rsquo;ve seen that before&mdash;all throughout 2010 the credit was in, then stripped out, then in another bill, then stripped out again&mdash;so gun-shy biodiesel industry stakeholders were not convinced this last attempt would pan out, and there was still a real possibility of entering the new year without the incentive. But in the 11th hour, the bill was ushered through the House and Senate, and signed by President Obama the following day.
 As soon as the credit was signed into law, Biodiesel Magazine staff editors and I picked up the phones and talked to producers, to get their thoughts on the credit being reinstated retroactively to Jan. 1, 2010. We got a lot of great responses, interesting insight and ultimately mixed reactions on the one-year extension, now good through 2011. Some producers banked on the reinstatement all along, and sold B99 in anticipation of getting paid back by the government. Others weren&rsquo;t so trusting, and stopped selling B99 for B100 instead, passing the risk onto buyers. Of course, some producers stopped producing altogether, and the even less fortunate ones went out of business during the past year. All the people we spoke with, however, despite how different their stories or experiences within the past year, have serious concerns over the lack of a long-term policy goal with respect to biodiesel, and fear the industry will be in the exact same position next year if it cannot convince Congress to support and pass a multiyear biodiesel incentive and the EPA to increase the biomass-based diesel volume requirements of RFS2. For the full story, check out the article we compiled on page 10 of this issue.
 Speaking of this issue, if you&rsquo;re reading this in early February, there is a good chance you are doing so in sunny Phoenix, at the National Biodiesel Conference &amp; Expo. I look forward to attending it, as I have for the past five years, and hearing the most recent developments and trends in the biodiesel industry. We will be writing reviews from the conference, so if you can't make the show, stay tuned to www.biodieselmagazine.com for our coverage of the latest information and breaking news. Also, look for our April print issue, in which we will review the event&rsquo;s general and breakout sessions.

2011/01/12947829975235.jpg

It's Back

In many U.S. states, automobile owners must have their vehicle inspected at least annually. In addition to improving public safety, an inspection can alert a car owner to developing maintenance problems, permitting the owner to address the issue without experiencing a breakdown or a more serious, expensive repair. An annual inspection (or other periodic review) of a company&rsquo;s legal issues can likewise help a company nip potential legal problems in the bud and avoid more complicated and expensive legal problems.
 For some companies, a normally slow business period offers an opportunity to schedule an audit of the company&rsquo;s legal situation. Companies having less predictable activity cycles must instead reserve time to review legal issues.
 Performing a periodic review enables a business to anticipate and plan future legal tasks, budget for associated costs or revenues, take advantage of otherwise unappreciated business opportunities and, sometimes, minimize or avoid legal disputes.
 The components and comprehensiveness of a legal review should correspond to the types of legal issues and likely degree of involvement that a company anticipates facing. Issues commonly reviewed include a summary of legal disputes involving the business that arose since the previous review, including those that have been resolved and those that remain pending; planning for reasonably predictable disputes the company may face prior to the next review, especially including strategies for avoiding or more efficiently resolving them; contingency planning for unexpected, but foreseeable disputes in which the company may become involved; the appropriateness of the business&rsquo; current corporate structure and, especially for smaller businesses, a review of succession and estate planning issues that may accompany the departure of a principal.
 More issues to think about during an annual legal review include examination of tax treatment of the business&rsquo; revenues and expenses, and strategizing to obtain the most beneficial tax treatment possible; consideration of anticipated or potential business transactions and development of strategies to maximize the associated business advantage; an update of recent changes in federal or state laws and regulations that affect the business or its operations; review and planning relating to legal liability of the business to its employees, customers, and others on account of the business&rsquo; operations and liability of suppliers and contractors to the business attributable to their operations; consideration of legal issues that are foreseeably raised by the company&rsquo;s immediate and future business plans (especially those plans that represent a departure from the past); consideration of how the legal process may ease or advance aspects of the company&rsquo;s business plans; review of compliance by the business and its customers, suppliers, and contractors with existing contracts; review of the manner in which the company secures and protects its intellectual properties, such as trademarks and service-marks, inventions, and confidential information; and reconsideration of the company&rsquo;s personnel policies, including those relating to benefits, employee obligations, and changes to employment status.
 Regarding this last item, a company&rsquo;s periodic review with its counsel of employment-related issues can be particularly useful in connection with, or as a prelude to, a corresponding periodic review of those policies by the company with its employees.&nbsp;
 Of particular interest to biodiesel and other alternative energy companies recently are tax credits and other developmental incentives offered by the federal, state, and local governments. Availability, eligibility criteria, and other program details change frequently and can be difficult to follow for one whose job duties do not include remaining abreast of program changes. As individuals whose careers depend on current knowledge of such details, accountants and attorneys can be a valuable source of information regarding these programs. Attorneys active in the field can often provide insight into which activities and arrangements are more likely than others to draw the attention of regulatory and law enforcement officials, providing businesses the opportunity to avoid unnecessary scrutiny.
 In short, a periodic review of legal issues&mdash;like an annual automobile inspection&mdash;can identify, and sometimes resolve or avoid, problems that might require far more complicated and expensive solutions if discovered later. Furthermore, regular meetings between a company and its counsel can improve counsel&rsquo;s knowledge of the company&rsquo;s operations, enabling counsel to better anticipate and respond to the company&rsquo;s legal needs. Author: Gary D. Colby Attorney, Dilworth Paxson LLP (215) 575-7075 <a href="mailto:gcolby@dilworthlaw.com">gcolby@dilworthlaw.com</a>

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Annual Legal Checkup

We&rsquo;re all aware of the challenges and opportunities with biodiesel, including the raw feedstock source, production, distribution and infrastructure. A critical area often overlooked is compatibility and acceptance by end users actually burning the biodiesel: the engine and vehicle manufacturers. As biodiesel becomes increasingly accepted and recognized as an alternative to petroleum diesel, end users in the value chain will want assurances their engines and vehicles won&rsquo;t see any adverse effects. This includes decreased durability and reliability, increased service requirements, and changes to emissions and performance. They want the guarantee that using biodiesel will be totally transparent to their products and their customers.
 How are these assurances given to end users? The answers are, with comprehensive testing at both the engine and full-vehicle levels; and biodiesel testing at all phases and steps of the development process, including pilot plant stage, volume ramp-up, process demonstration and validation, and full production.&nbsp;
 Since the early 1970s, Roush has been associated with performance products and NASCAR racing. Building from that racing heritage, Roush has 35 years of experience as a full-service engineering and product development company in all areas of the transportation, military and other industries. Roush specializes in vehicle and powertrain development and testing, including dynamometer engine testing, chassis rolls and emission testing, and real world mileage accumulation. The 50 Roush dynamometers are capable of running engine performance, durability, fuel economy and other development on virtually any type of fuel. Our climatic chambers and engine dynamometers are capable of engine testing from minus 40 degrees Celsius to 90C (minus 40 degrees Fahrenheit to 194F).&nbsp;&nbsp;
 Roush can generate testing data and engineering feedback for the biodiesel developer or manufacturer very early in their development process. As little as 40 to 80 gallons of biodiesel can be enough to provide directional results and indications on performance, versus conventional diesel fuels. Such small quantities of fuel can be used to demonstrate performance, impact on engine calibrations, power, fuel economy and emissions data, and to identify hardware implications from biofuels. This data can be very valuable at the early stages when formulations are still in the development process.
 As producers scale up to process demonstration volumes, testing can continue to develop along with it. With hundreds or thousands of gallons available for testing, Roush can verify quality and performance, and engine dynamometers can then begin to run durability phases, in which the engines can be run longer, from tens to hundreds of hours.
 At this phase, additional performance and emissions testing can be achieved. Areas prone to problems associated with the fuel system, such as degradation of fuel injectors and fuel pumps, can be identified. These issues, if undetected and resolved, would become apparent to the customers in the form of increasingly noticeable power loss from the engine.
 Roush can easily take an engine that has run for an extended period of time, tear it down to the critical components&mdash;valvetrain, bearings, rotating and reciprocating assemblies, fuel systems and more&mdash;and compare those to a new engine or one run on petroleum-based diesel. Any difference that might indicate increase or unusual wear is noted, and can be referred to our engineering group and the fuel producer for additional investigation. At this time, new and alternative blends of fuels, including blends such as B10, B20 and higher, can easily be evaluated.
 Both at this stage and as increased volume of any given company&rsquo;s biodiesel is available, real-world on-road testing and performance can become valuable indicators of the fuel quality and equivalency to petroleum diesel. Roush can build proof-of-concept demonstration vehicles containing new hardware or hardware changes for the unique fuels, or take fleets of existing vehicles and run them on biodiesel blends. With our Over-the-Road Testing group, Roush accumulates more than 30 million miles annually on vehicles ranging from cars to light-duty trucks, up to Class-8 commercial trucks. What&rsquo;s the goal of all this testing? To provide accurate data for good, sound engineering decisions.
 In short, the end user will want a diesel fuel that offers all the benefits of biofuels without impacting their products, and no compromises in quality and performance levels. Solid testing data can provide the proof that manufacturers and end customers require. Author: Steven Ross Director-Business Development, Roush Industries (734) 779-7736 <a href="mailto:steven.ross@roush.com">steven.ross@roush.com </a>

2011/01/12947833913331.Ross-02

Satisfying the End User 

Almost a full year after it expired, the $1 per gallon U.S. biodiesel blender tax credit is back, reinstated in the 11th hour by a lame-duck Congress in a giant $850 billion tax package. After a year without its driving subsidy, which caused major uncertainty and disruption in the market, industry reaction is mixed: many are excited to recoup a retroactive check and survive another year, even grow; yet those same individuals express concern over short-term relief with no real long-term certainty. &ldquo;The debate and delay has caused a lot of damage for us,&rdquo; says Bernie Crowley Jr., vice president of Delta American Fuel LLC, a 40 MMgy biodiesel plant in Helena, Ark. Even though capital dried up in the past year, the tax credit&rsquo;s retroactive reinstatement &ldquo;might be a light at the end of the tunnel,&rdquo; Crowley says. &ldquo;I think we&rsquo;ll see biodiesel start to grow again.&rdquo;
 Administrative Manager with Minnesota Soybean Processors Kim Collin tells Biodiesel Magazine that the company produced most of last year, albeit at a much lower rate, but in November it was forced to shut down biodiesel production altogether. Now, employees reassigned to other operations at the complex are shifting back to making methyl esters. &ldquo;We&rsquo;ve seen an increase in orders,&rdquo; she says, adding that the plant will be at full production in a month or two.
 &ldquo;We&rsquo;re going to be busier than ever before,&rdquo; says Chris Peterson, vice president of Hero BX in Pennsylvania. &ldquo;The tax credit coming back will bring back some of the small, second-tier oil companies, blenders&mdash;not obligated parties&mdash;that just weren&rsquo;t able to finance biodiesel without the dollar.&rdquo;
 Interestingly, 2011 will be the first time the tax credit and the implemented biomass-based diesel mandate under RFS2 will coexist. And RFS2, along with its renewable identification number (RIN) credits, provided the only real lifeline for much of the industry in the past year, initiating a near revolution in the business model of biodiesel companies. Before the tax bill passed, RIN prices rose to surpass the value of the credit, keeping plants alive as they adjusted to what seemed to be a new era. &ldquo;One of our biggest deals was education in terms of RIN markets,&rdquo; Peterson says, adding that Hero BX&rsquo;s education then spilled over to its customers, many of whom are not obligated parties. &ldquo;Essentially what we had to do is go through and model&mdash;okay, petroleum diesel or heating oil is at this price, biodiesel is at $1.10 more, but the RINs are worth 65 cents and you get 1.5 RINs per gallon, and then you can sell those RINs so you are actually buying biodiesel with the RIN value at a 5- or 10-cent discount to petroleum.&rdquo;
 Hero BX began 2010 by selling B99, in hopes of a quick extension, only to switch to selling B100 after a few months passed. &ldquo;We essentially just transferred that liability, that risk, onto our customer,&rdquo; Peterson says. Crowley tells Biodiesel Magazine, &ldquo;We stayed scared about this, because we sold a lot of B99 on good faith.&rdquo; Klaus Ruhmer, North American business developer for the major biodiesel technology provider BDI BioEnergy International AG, acknowledges an issue some in the industry are concerned about: companies that receive the retroactive payment may not be the companies that deserve it, and that time will tell whether &ldquo;gentlemen&rsquo;s agreements&rdquo; between parties on the disbursement of funds will be honored.
 &ldquo;On the blenders credit, our reaction is mixed,&rdquo; Ruhmer says. &ldquo;On the one hand, it&rsquo;s good&mdash;and very important&mdash;for our customers, existing producers. For them we are glad. But by renewing it for only one more year, we&rsquo;re insuring that there won&rsquo;t be any investments. People interested in investing need stability in the market place.&rdquo;
 Leif Forer, general manager of the 1.4 MMgy Piedmont Biofuels in Pittsboro, N.C., holds mixed reactions too. &ldquo;I feel like it&rsquo;s created a bunch of instability in the market and that has done a lot of damage,&rdquo; he says. &ldquo;I know that people will be investing in plants again, which will help the industry and us. But, I know that it&rsquo;s scheduled to go away again, and that&rsquo;s going to hurt just as bad as it did this last time when it lapsed. It&rsquo;s such a wild card that I sometimes wonder if we&rsquo;d be better off without the darn thing. I know it&rsquo;s crazy to say that, because it&rsquo;s not what conventional wisdom says.&rdquo;
 As a member of the National Biodiesel Board&rsquo;s RFS2 Working Group, Forer says he is working hard to push EPA to increase biomass-based diesel volumes required in the federal standard, helping stabilize the market and increase RIN prices, which are expected to bottom out with both the credit in place and the beginning of the new annual reporting period. Forer also says we can expect feedstock prices to rise with the reinstatement. &ldquo;When we first started production, when the tax credit first came into existence, we started using soy oil, and it didn&rsquo;t take long of course before soy started trading a dollar more a gallon,&rdquo; he says.
 And while producers who survived the past year are ramping up production, they all believe if a tax credit is to exist at all, it must be a long-term, multiyear plan to bring investment and stability back. Lisa Mortenson, CEO of the 10 MMgy Community Fuels plant in Stockton, Calif., says, &ldquo;What we need is a certain framework for 2012. There are mechanisms in the market that can adjust and compensate for the lack of a tax credit, but the market needs to have that information so it can react.&rdquo; She adds, &ldquo;One year is a very short horizon for business planning.&rdquo;
 Crowley says, &ldquo;I just wish the political process would give us a clear message for some sort of period of time, and we would find a way to deal with it.&rdquo;

ROLL OUT: Community Fuels steadily increased output volume in late 2010 at its 10 MMgy facility in Stockton, Calif., according to CEO Lisa Mortenson. â€œWe stayed in both steady production and steady sales throughout 2010, but we are forecasting high

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Producers express mixed reactions on return of tax credit

Reinstated: The Buck is Back

Field pennycress, also known as stinkweed, may be an ideal biodiesel feedstock in Canada due to its superior cold flow capabilities and ability to grow on marginal cropland. A project initiated by All Peace Industries and its owner Stan Peacock aims to relocate an existing idle 17.5 MMgy biodiesel plant from Warren, Mich., to a location in the High Prairie region of northwestern Alberta for the production of pennycress biodiesel.
 The Michigan-based plant is currently owned by The Power Alternative Inc. According to TPA President Jim Padilla Jr., his company not only intends to sell its plant to All Peace, but will also serve as a partner in the Alberta project. &ldquo;We&rsquo;re already in partnership with All Peace as far as developing the pennycress feed and the potential for it,&rdquo; Padilla said.
 While All Peace is still working to secure necessary funding, Padilla estimates the plant could be up and running in Alberta by the third or fourth quarter of 2011. That timeframe is based on TPA&rsquo;s initial experience installing the plant in Warren. &ldquo;Having been through the launch curve and everything else with our facility here, we&rsquo;re going to bring that capacity online quickly for them,&rdquo; Padilla says.

a new home: The Power Alternative Inc.â€™s 17.5 MMgy biodiesel plant is slated to be relocated from Warren, Mich., to Alberta, Canada, early this year. 

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Alberta project works to make pennycress biodiesel a reality

Stinkweed Smells of Potential

Like their U.S.-based counterparts, German biodiesel producers appear to be facing the same economic plight, as macroeconomic factors have affected decisions whether to severely scale back production or completely shut down.
 One producer in particular, EOP Biodiesel AG, announced in December that it had declared insolvency, meaning it was unable to meet financial obligations with lenders in order to obtain working capital to remain operating. EOP Biodiesel, which operates a 132,000 metric-ton (39 MMgy) rapeseed-based production facility in Falkenhagen, said in a statement that insolvency proceedings were opened in district court. Horst Piepenburg of Dusseldorf Law Firm was appointed provisional insolvency administrator for EOP Biodiesel.
 &ldquo;The company has suffered immensely from ramifications of an inadequate strategy in the past,&rdquo; says EOP Biodiesel CEO Jorg Jacob, in a company statement. In October, it halted production following damage to its rapeseed oil mill, but EOP Biodiesel&rsquo;s board &ldquo;dismissed the notion that damage of the oil mill in October might have contributed to the current status.&rdquo;
 In its statement, the company said it sold approximately 120,000 metric tons of biodiesel in spring 2010, which accounted for 90 percent of its planned output for the entire year. Bengt Korupp, EOP Biodiesel&rsquo;s chief production officer, states, &ldquo;We have taken all required steps in order to start up the mill by early January again. That is still our plan. We want to carry on with production again.&rdquo;
 According to Frank Bruhning, spokesman for the German biodiesel industry association Verband der Deutschen Biokraftstoffindustrie e.V. (VDB), the German industry has a production capacity of nearly 5 million metric tons per year (1.5 billion gallons). He notes that several factors are causing other producers to shut down, one of them being a tax on B100 that came into effect in 2007.
 &ldquo;Prior to the B100 tax, much of the biofuel market consisted of biodiesel,&rdquo; Bruhning tells Biodiesel Magazine. &ldquo;In 2010, most of the biodiesel was sold into the blending market. But, the mineral oil companies have a tendency to buy their supply from larger [biodiesel] producers rather than from smaller ones. There were quite a few companies that went down as a result.&rdquo;
 Subsidized biodiesel from the U.S. continues to flow into European ports, Bruhning says, coupled with a differential export tariff from Argentinean biodiesel that continue to make German biodiesel prices uncompetitive. Additionally, a new directive is set to begin in January in which biofuel producers in Germany and Austria will need to certify their rapeseed and rapeseed oil will be sustainably farmed. In December, Germany imposed a more flexible calculation of certified biofuel feedstocks for a temporary period up to June 30.
 &ldquo;The sustainability certification might help a bit in keeping out subsidized product,&rdquo; Bruhning says, &ldquo;unless the U.S. and Argentina get that sustainability certification themselves, of course.&rdquo;

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How economic factors could deflate a once robust German biodiesel industry

In Search Of a Turnaround

The U.S. biodiesel industry may be dominating the headlines due to a reinstated tax incentive, but other countries are also producing positive news, proving there is more to biodiesel&rsquo;s success than any one tax credit. A Belarus-based chemical products manufacturer has commissioned BDI-Bioenergy AG to build a 15 MMgy biodiesel facility. The government has guaranteed land for growing rapeseed, the initial feedstock to be used at the plant, and BDI will provide all the engineering services and specific technical equipment, all while coordinating the start-up of the plant. The plant will use an enzymatic degumming process in a way that, according to BDI, is &ldquo;environmentally sound&rdquo; and &ldquo;extremely economic.&rdquo;
 While the future facility near Russia&rsquo;s eastern border shows that one particular thermoplastic and polyester production company is in favor of sustainable energy production&mdash;and is willing to prove it&mdash;there might be more to it. &ldquo;The commission from Belarus is highly significant,&rdquo; says Wilhelm Hammer, CEO of BDI. &ldquo;The development of alternative energies from renewable sources is a global trend that cannot be stopped.&rdquo;

BDI lands plant contract in eastern Europe

More to it in Belarus

Its slogan, &ldquo;What Can Brown Do For You?&rdquo; may be a fitting open-ended description for the global customer base it serves when it comes to its respected parcel delivery services, but UPS is also facilitating the movement of environmental and sustainable awareness through its philanthropic funding arm, The UPS Foundation.
 In November, The UPS Foundation doled out nine grants totaling approximately $2 million dedicated to environmental programs and organizations worldwide, all of which address issues of climate change, renewable energy, resource conservation and other environmental causes that are championed by UPS volunteers. The UPS Foundation added environmental sustainability to its official philanthropic focus areas in 2008.
 The Earth Day Network was awarded $200,000 to help fund its new Sustainable Transportation Project, which is a K-12 education initiative that includes curricula that provide sustainable transportation lesson plans, pilot tests of school-based biodiesel production facilities at four schools, and a corresponding media communication campaign.
 According to UPS spokeswoman Ronna Branch, the projects will also be documented and shared with a worldwide audience on Earth Day TV and other venues, to showcase EDN&rsquo;s advocacy of biodiesel and its environmental benefits. &ldquo;It&rsquo;s our responsibility to do not only our part in reducing the amount of effects that we have on the environment, but to also try and encourage new projects like the EDN that can help better the environment,&rdquo; Branch says.
 Previously, the EDN was awarded $150,000 from The UPS Foundation in 2009 to help fund its &ldquo;No Idling&rdquo; campaign, which involved developing curriculums for teachers to teach their students about the environmental effects of idling a vehicle versus turning a vehicle off in car pool, school bus and other forms of transportation, to reduce harmful emissions. &ldquo;[This most recent grant] is a continuing partnership that we have with them,&rdquo; Branch says. &ldquo;The Sustainable Transportation Project is the next step in that.&rdquo;
 Since 2008, The UPS Foundation has donated $9.3 million to 138 environmental organizations. Grants are provided to both U.S. and international organizations, with local grants recommended by UPS employee committees.
 &ldquo;Not only do we provide the opportunity for our employees to apply for grants in the organizations they take part in, but we also look for recommendations on ones we should give larger grants to, that make the greatest impact on the environment,&rdquo; Branch says.

KEEP ON TRUCKINâ€™: The UPS is a strong advocate of biodiesel use, not only in its own fleets of delivery vehicles, but also on the municipal and community level.

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UPS believes biodiesel is critical to environmental stewardship 

Special Delivery 

Just days after the tax credit was reinstated, the U.S. biodiesel industry received more good news. The U.S. District Appeals Court for the District of Columbia issued a unanimous decision on Dec. 21 to deny a petition that was filed by the National Petrochemical Refiners Association and the American Petroleum Institute in March on the U.S. EPA&rsquo;s combined RFS2 volume requirements for 2009 and 2010.
 In the petition, NPRA and API claimed that the EPA&rsquo;s issuance of retroactive volume requirements under the final RFS2 rule would unfairly penalize both refiners and consumers. While neither organization challenged the RFS2 program as a whole, the petition argued that EPA&rsquo;s inability to issue volume requirements in the timetable required by Congress resulted in unfairness regarding implementation of the policy.
 More specifically, the petition alleged that the EPA&rsquo;s RFS2 rulemaking for 2009 and 2010 volume requirements was in violation of the statutory requirements of the program, which require volume mandates for each year to be issued by Nov. 30 of the previous year. The petition also claimed that the retroactive nature of the 2009 volume requirements was impermissible, and that the rulemaking violated statutory lead time and compliance provisions.
 &ldquo;This is a disappointing decision,&rdquo; says API senior policy advisor Patrick Kelly. &ldquo;Setting requirements to blend certain biofuels for the previous year is a legally questionable retroactive action.&rdquo; While Kelly notes that his organization supports a realistic and workable RFS2 program, the court&rsquo;s decision may set a troublesome precedent for the program. &ldquo;This decision significantly complicates compliance and may set a dangerous precedent allowing retroactive requirements for past compliance periods.&rdquo;
 The NPRA has also expressed disappointment in the court&rsquo;s ruling. &ldquo;The retroactive regulation by a federal agency establishes a deeply troubling and potentially far-reaching precedent,&rdquo; says NRPA President Charles Drevna. &ldquo;We&rsquo;re disappointed that the court did not overturn what is clearly a flawed and misguided approach toward implementation of the federal renewable fuel standard. Regardless of the court&rsquo;s ruling, however, NPRA and its members remain committed to working towards the overall implementation of the RFS program.&rdquo;
 While API and NPRA are clearly disappointed in the court&rsquo;s decision, the biodiesel industry has enthusiastically embraced the ruling. &ldquo;This [decision] wholly validates the U.S. biodiesel industry&rsquo;s legal position and sends a clear, unambiguous signal to the marketplace that the common-sense goals established in the RFS2 program will be met,&rdquo; says Manning Feraci, the National Biodiesel Board&rsquo;s vice president of federal affairs. &ldquo;This lawsuit was the final piece of uncertainty creating market disruption for the biodiesel industry,&rdquo; adds Gary Haer, Renewable Energy Group Inc.&rsquo;s vice president of sales and marketing, and new NBB chair. &ldquo;Today&rsquo;s decision is an important sign that our nation is moving full-steam ahead to meet our energy independence and greenhouse gas emissions reductions goals.&rdquo;

Upholding the RFS: A unanimous opinion by Judge Judith Rogers of U.S. District Court of Appeals for the District of Columbia has denied a petition challenging the RFS2. Joining in the decision were Circuit Judges Douglas Ginsburg and Merrick Garland.

2011/01/12948451935971.jpg

Court upholds EPA's renewable fuel requirements

RFS2 Scores a Victory

Don&rsquo;t tell Ever Cat Fuels LLC that the equity market has dried up. The biodiesel producer managed to raise $2.1 million in equity financing from a private placement round. In all, the company seeks to raise a total of approximately $2.25 million, according to a regulatory filing through the U.S. Securities and Exchange Commission.
 For Ever Cat Fuels, the equity funds will be used for additional equipment purchases and upgrades to its 3 MMgy multifeedstock production facility in Isanti, Minn., according to Dave Wendorf, director of marketing for Mcgyan Biodiesel LLC. Ever Cat Fuels, which came online in 2009, licensed its process technology from Mcgyan Biodiesel LLC, a firm that is commercializing a novel process pioneered by Augsburg College researchers Clayton McNeff, Arlin Gyberg and Ben Yan.
 &ldquo;The private placement took about six months to complete,&rdquo; Wendorf says, adding that demand to fulfill Minnesota&rsquo;s B5 mandate was a driving force behind Ever Cat Fuels&rsquo; successful run to stay in business all of 2010, despite a lapsed tax credit. &ldquo;We haven&rsquo;t experienced any issues at all,&rdquo; Wendorf adds. &ldquo;In fact, with the lapse of a credit, the value of the RINs was also at a point where they almost took the place of a credit.&rdquo;

MCMONEY: Ever Cat Fuels in Isanti, Minn., raised 2.1 million in equity recently to upgrade its 3 MMgy Mcgyan biodiesel plant. 

2011/01/12948464932461.jpg

How one producer raised capital in tight economic times 

Ever-Flowing Equity

North Carolina may soon need an asterisk by its name to denote the state&rsquo;s efforts in harboring community-scale sustainability and biodiesel production. By now, the work and success of Piedmont Biofuels is well documented, but don&rsquo;t forget about the EcoComplex, only one hour north of Charlotte in Catawba County. Described as an ecological industrial site, the development aims to utilize waste resources to produce renewable energy and breed economic activity all through public and private partnerships. The site is based on a landfill gas-to-energy project that started in the &lsquo;90s. Today, the complex is surrounded by nearly 80 hectares (198 acres) of oilseed crops and has plans to produce everything from fuel to feedstock.
 Through Appalachian State University, a collaborative biodiesel project is putting U.S. EPA funds to good use at the site as well. The goal for the project involves &ldquo;developing a closed loop biodiesel processing facility that provides for its own energy needs, and recycles its waste products,&rdquo; according to a description of the project by Appalachian State. The biodiesel produced on the site will be used initially for landfill equipment, but the ultimate goal is to create a processing system that others might one day duplicate. Keep an eye on the EcoComplex, and if a community-scale biodiesel complex shows up in your state, remember North Carolina. The processor used at the Catawba complex (after a few modifications) was, after all, based on another familiar name&mdash;Piedmont Biofuels.

Add another community-scale biodiesel project to the growing list

North Carolina's Role in Sustainability  

Work is underway that could eventually help approval of higher biodiesel blends in new diesel vehicles equipped with particulate filters that employ late post-injection for regeneration.&nbsp; A joint study between the German oilseed council UFOP and Volkswagen is investigating ways to partition late-post injection to help reduce dilution of engine oil.
 Diesel particulate filter regeneration is required to burn off soot, or particulate matter (PM), collected in the filter to help meet U.S. EPA&rsquo;s PM reduction requirements. Extra fuel is injected late in the combustion cycle not to be burned but rather to be sent through the exhaust valves and straight into the filter, located downstream in the exhaust system, in order to create a rich condition for soot burn-off. In late post-injection, some of the fuel injected late in the combustion cycle, especially fuel sprayed onto the cylinder walls, can make its way past the oil rings and accumulate in the engine oil crankcase. Petroleum diesel fuel volatizes off, but due to biodiesel&rsquo;s different properties and higher distillation temperature, the bio portion of the fuel that enters into the crankcase tends to accumulate, causing dilution issues and premature engine wear from degradation of engine oil. Some OEMs avoid this issue altogether by injecting fuel directly into the exhaust system, just upstream of the filter, rather than using the already existing fuel injection infrastructure on the engine. The downstream injection approach, however, costs more due to the added hardware.
 Regarding dilution with varying biodiesel blends, the UFOP/Volkswagen study found that &ldquo;the splitting of the late post-injection in two partial injections lowered the fuel entry into the engine oil in comparison with a late, undivided post-injection during operation of the engine with B7 by approximately 20 percent, and with B30 by approximately 27 percent.&rdquo;
 While this is positive, and shows that automakers are serious about understanding and incorporating biodiesel, UFOP further states that the tests &ldquo;clearly demonstrated that the early post-injections subsequent to the main injection can have a considerable share in the engine oil dilution if partial amounts of the fuel jets encounter the cylinder wall. The early post-injections should be incorporated in future potential investigations. However, the emissions, consumption and vehicle handling must not [be] negatively [impacted].&rdquo;

BIG DEAL: If the UFOP/Volkswagen study is any indication, splitting late post-injection could minimize dilution issues with biodiesel, allowing higher blends to be approved by a greater number of engine makers.

2011/01/12948467503828.jpg

New study may get to the bottom of biodiesel dilution issue 

Splitting Late Post-Injection

South Korea and the U.S. have more in common than that difficult relationship each shares with the Asian country&rsquo;s neighbor to the north. It turns out South Korea hopes to implement a renewable fuel standard, making petroleum and biofuels mixtures a must. The Ministry of Knowledge Economy and the Korea Institute of Petroleum Management first considered an RFS several years ago, and now it appears that a plan to start a nationwide mandate in 2013 may come a year early, taking effect in 2012. The hope is to raise biodiesel content in domestic diesel to 3 percent from the current 0.5 percent, according to W.H. Leong, vice president of Carotech Inc., a Malaysian-based biodiesel producer. South Korea has been a very small market for palm biodiesel, Leong says, and although there are rumblings from unnamed sources inside the ministry that have indicated its desire to start an RFS a year early, &ldquo;it will still take a while,&rdquo; Leong says. Discussions on the mandate began in 2007.

2011/01/12948470556733.jpg

The nation's hopes for the future aren't just about the North

An RFS for South Korea? 

Madrid-based IIMA Consultora aligned with local Gambian company WOMY in 2007 to found Envergy Gambia Ltd., to promote a jatropha-to-biodiesel project. The main objective is to increase the cultivation of jatropha in Gambia.
 According to the IIMA, jatropha farming not only provides feedstock for biodiesel production, it also aids in the recovery of degraded and highly eroded soil while acting as a carbon sink. Harvesting of jatropha seeds also provides valuable employment opportunities, which are crucial to the development of West Africa.
 The project is in its first phase, which has included the construction of a seedling production center that is equipped with a greenhouse that can produce an estimated 2 million seedlings per year. Currently, 114 hectares (282 acres) of jatropha are being cultivated. According to IIMA, 4 hectares of that area has been equipped with irrigation systems.
 The Envergy Gambia project has been specifically designed to benefit small family farms of approximately 5 hectares. Additional support is provided to these families through micro-credit grants for women. IIMA estimates that the first phase of the project will increase jatropha cultivation to a total of 5,000 hectares while providing employment to more than 1,000 local families.
 Future phases of the program will involve the installation of oil extraction equipment and a power system that will produce approximately 3.9 megawatts of electricity by burning the waste cake that results from seed crushing. Those interested in participating in the project, or developing similar initiatives, are asked to contact IIMA.

Multiplying Benefits: Jatropha cultivation can provide significant environmental and economic benefits to families in Africa. Oil gathered from the plants seeds can be converted to biodiesel, and the remaining seed material can be burned for electric

2011/01/12948471551812.jpg

Envergy Gambia Ltd. seeks biodiesel project participants

Joining Up for Jatropha

No team wins the Super Bowl with defense alone. It takes a strong defense and an effective offense to win. That was the case last year when the Saints beat the Colts in Super Bowl XLIV and it will be the case this year as we watch the action from Arizona at the Biodiesel Conference &amp; Expo Super Bowl Party. For the past two and a half years, the biodiesel industry has been under attack and has mounted an impressive and successful defense. As we continue to deploy our strong defense of the industry, the time has come for a striking offense to put some serious points on the board.
 Established Defense
 Recent examples of the National Biodiesel Board&rsquo;s defensive strength include 8,200 comments submitted to the U.S. EPA during the RFS2 comment period; persuasive and accurate formal comments on the draft rule that ultimately secured a role for all domestic feedstocks for biodiesel production in RFS2; a stepped-up sustainability program that developed empirical data to refute unfounded criticisms about sustainability, including a massive communications campaign to educate reporters and editorial boards of major news publications; a successful campaign to secure renewal of the biodiesel tax incentive despite impossible odds, and a successful outcome of the petroleum industry lawsuit over the RFS2, of which NBB was an intervener; and a large list of continued technical successes including growing OEM support, progress in pipelines, progress in Bioheat markets and fuel quality.&nbsp;&nbsp;
 These hard-fought defensive successes have forged new pathways, disarmed threats, safeguarded valuable opportunities and stomped out fires. And now it is time to execute a powerful offense.
 Offensive Counter
 This year, with unprecedented new support from farmer members and the Soybean Checkoff, NBB is introducing a bold, new, national communications initiative. This aggressive offensive move is aimed at reinvigorating the positive image of biodiesel and to properly define it as America&rsquo;s Advanced Biofuel rather than a conventional biofuel. This bold communications and outreach project will target influential opinion and thought leaders. The program, called the Advanced Biofuel Initiative, will highlight the multiple benefits of our fuel and dispel misinformation that has unduly harmed biodiesel&rsquo;s image. It will also better position biodiesel to capture a significant portion of the 1.35 billion gallon advanced biofuel market created by the RFS2 in 2011.
 In addition the many beneficial offensive plays of the initiative, it will also further help us address predictable attacks on biodiesel related to food prices, land use change, and other unwarranted criticism that is likely to tackle our industry as we recover and return to a position of growth. So far checkoff funders have committed more than $3 million for this project. This is new funding that goes above and beyond their traditional level of support. This figure is also more than double NBB&rsquo;s current communications budget and will grow the overall NBB budget by nearly 25 percent. The program is intended to continue for three years in an effort to fill existing information voids among those audiences that have the potential to be the most influential, or conversely the most detrimental.
 The Play Book
 The Advanced Biofuel Initiative offers a balanced game plan and includes strategic advertising as well as targeted one-on-one outreach. The scope of the Advanced Biofuel Initiative is designed to make a notable and lasting impact within narrowly defined audiences. Advertising will be primarily targeted in Washington and will include local television, radio, print, and internet advertising.&nbsp; Also, for the first time in the industry&rsquo;s history, we are slated to run a national cable ad spot. This bold advertising campaign will be matched with strategic tactics to strike rumors and misinformation at their root.Targets for these efforts will be focused on environmental and animal agriculture leaders, the leading sources of misinformation and negative publicity about biofuels. Strategies include one-on-one outreach, building partnerships and alliances, a presence at leading industry gatherings, and regionally based outreach and participation.
 This generous new support of U.S. soybean farmers could not have been better timed to help provide a much-needed shot in the arm to the beleaguered biodiesel industry. It is a tremendous leveraging opportunity that allows industry contributions to be applied primarily toward our ongoing policy objectives. While I can&rsquo;t yet wager who will take home the big win at this year&rsquo;s Super Bowl, I am confident it will be the team whose offense compliments its defense. I am excited to see how far this time-tested strategy will take our industry.
 Joe Jobe, CEO, National Biodiesel Board

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Advanced Biofuel Initiative: Time for the Offense to Take the Field

The City of New York is a billion gallon home heating industry. Recently two dozen industry leaders and feedstock suppliers from 10 states participated in the New York Bioheat &ldquo;The Big Apple Tour&rdquo; to see firsthand what exactly is happening in the big city. The event spotlighted New York&rsquo;s love for biodiesel and Bioheat, featuring prominent users such as Central Park through the department of parks, and the city&rsquo;s sanitation department. The National Biodiesel Board organized the trip to help showcase the outstanding potential for biodiesel.
&nbsp; Participants met with community leaders including Councilman Jim Gennaro, who was among those who championed and ultimately secured a 2 percent Bioheat mandate citywide, which will consume an estimated 20 million gallons of biodiesel annually; Peter Iwanowicz with the New York governor&rsquo;s office, who is actively working to support a statewide requirement; New York Assemblyman Marc Alessi, whose enthusiasm for biodiesel was evident as he emphasized the critical need for renewable fuel alternatives.&nbsp;&nbsp;
 Among the comments from New York leaders, several stood out as capturing the value biodiesel can bring to their efforts.
 Keith Kerman, chief of operations for the city&rsquo;s parks and recreation department, said, &ldquo;We will turn over all our core vehicles to diesel, mostly to use your product. B20 is a simple, quick solution. Why we&rsquo;re not all doing it is beyond me.&rdquo;
 John Maniscalco, New York Healing Oil Association, said, &ldquo;You&rsquo;re my fix and my solution. You&rsquo;re going to take my product and make it cleaner and greener.&rdquo;
 While in New York, leaders visited the New York Mercantile Exchange. Just steps from Ground Zero, the exchange handles billions of dollars worth of energy products and other commodities being bought and sold, and is the world&rsquo;s largest physical commodity futures exchange. Participants also toured Metro Energy, one of New York&rsquo;s leading biodiesel and Bioheat distributors. Metro Energy is currently building a biodiesel plant in the shadows of New York&rsquo;s skyscrapers. The 100 MMgy biodiesel plant promises to be one of the largest in the country.&nbsp;&nbsp;
 New York Assemblyman Marc Alessi summed up the event and the power of biodiesel in the area by saying, &ldquo;I find this extremely exciting. The future is here in terms of what we can do, whether legacy heating, electrical generation, in cars, in trucks. B20 blended into any system can grow our production and use; and it&rsquo;s here, right here, right now.&rdquo;

NBB organized a New York event to showcase biodieselâ€™s potential in this billion gallon home heating industry.  Participants heard from a variety of local leaders and users. 

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Many prominent New York staples rely on biodiesel for effective operations, including Central Park.  Here participants meet with representatives from the New York City Department of Parks & Recreation and the New York City Department of Sanitation.  

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New York wants your product!

With the 2011 National Biodiesel Conference &amp; Expo underway, it is not&nbsp; too early to start thinking about 2012.
 The biodiesel industry will return to the site of one of its most well-attended conferences as it heads back to Orlando, Fla., in 2012. &ldquo;We are excited to return to Orlando where, in 2008, the National Biodiesel Board hosted nearly 4,000 biodiesel stakeholders at our conference,&rdquo; said Joe Jobe, NBB CEO. &ldquo;2008 was a great year for the U.S. biodiesel industry and we are expecting 2012 to be another great conference.&rdquo;
 The four-day event will be held at the Gaylord Palms Resort &amp; Convention Center, Feb. 5-8, 2012.&nbsp; Ron Marr, Biodiesel Manager for Minnesota Soybean Processors in Brewster, Minn., has attended the conference since 2005. &ldquo;Attending this conference has always been well worth the time, money and effort spent to attend,&rdquo; Marr said. &ldquo;This is the place where all the ingredients making up the industry come together.&rdquo;
 Orlando is a worldwide destination with an abundance of theme parks and sunshine. &ldquo;Orlando is a great place to hold an event like our conference because it is a great destination city with lots to offer, not only to our attendees but also to their families,&rdquo; Jobe added.&nbsp;
 Located just 15 minutes from the Orlando International Airport, the Gaylord Palms Resort &amp; Convention Center is convenient in many ways. Its expansive exhibit halls, meeting spaces and hotel rooms are all under one roof. With numerous restaurants and night spots under that same roof, networking is made easy.

The National Biodiesel Conference & Expo returns to Orlando for the 2012 show. 

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2012 Biodiesel Conference & Expo returns to Orlando

In February 2010, the biodiesel industry was facing nothing but questions. RFS2 had just been released mere days before the National Biodiesel Conference &amp; Expo, the biodiesel tax incentive had been expired more than a month with a very unclear legislative path, and the production outlook for the industry was not a positive one.
 This February the industry is coming together at the conference with a whole different outlook. The RFS2 is beginning its first full year as a real program with clearly defined parameters, the biodiesel tax incentive has been passed and signed into law through the end of the year, and the production outlook shows 2011 could bring record production numbers for the biodiesel industry. What a difference a year makes.
 New National Biodiesel Board Governing Board Chairman Gary Haer, of biodiesel producer Renewable Energy Group Inc., says that with all the uncertainty out of the way from 2010, the biodiesel industry is in as good a position as it has ever been.
 &ldquo;Last year the industry was facing a very uncertain future,&rdquo; Haer said. &ldquo;This year the market is bullish and moving forward.&rdquo;
 Much of that certainty comes from biodiesel&rsquo;s position as an advanced biofuel in EPA&rsquo;s statutory definitions as part of the RFS2. Biodiesel is poised to fill a significant portion of the 1.35 billion gallon advanced biofuel market created by the RFS2 in 2011, and producers stand ready to meet that demand. With all the uncertainties out of the way that the industry was facing this time last year, the biodiesel industry can now get back to what it does best&mdash;producing a renewable, cleaner-burning, domestic, advanced biofuel.

The biodiesel industry, then and now:  2010 uncertainties settled for 2011

National Biodiesel Board members play a major role in defining the long-term objectives and programs for their trade association. Members recently completed an online survey to provide input and identify priorities for the draft 2012 NBB Program Plan, which will cover October 2011 to September 2012. The comprehensive, directional plan for the biodiesel industry will be the No. 1 order of business at the membership meeting on Tuesday, Feb. 8, at the National Biodiesel Conference &amp; Expo in Phoenix.
 Developing the NBB Program Plan takes shape over the course of several months. Through technical, marketing and regulatory meetings, a member-led process identifies opportunities, as well as issues facing the industry. In addition to committee meetings, direct member input, and a survey, the planning process also includes a webinar presentation and member review. This allows NBB to prepare a clear direction to ensure the trade association continues to meet members&rsquo; needs.
 &ldquo;In order for the industry to meet the challenges facing it, we must have a comprehensive plan,&rdquo; said NBB vice chair Ed Ulch. &ldquo;The NBB Program Plan encompasses technical, marketing, legislative and regulatory priorities, and is the key mechanism to make sure the NBB is serving its members in the best way possible.&rdquo;
 The planning process captures member input and is a way to share association priorities with members. NBB staff and contractors are constantly interacting with biodiesel companies, regulators, users, engine and vehicle companies and distributors to better understand the needs and priorities of the industry.

NBB continues planning process at Biodiesel Conference & Expo

Leveraging dues income with other sources of funding is an important service the National Biodiesel Board provides its members. The NBB development program works to fund the NBB program plan and to educate members about available funding resources. In 2010, NBB funded work and projects in the program plan by leveraging member dues dollars with a 2:1 match. For every dues dollar that NBB receives, it is able to leverage two dollars from other sources like the soybean check off and federal programs. The funding allows NBB to address important issues such as sustainability, fuel quality, engine testing, and developing new markets such as Bioheat.&nbsp;
 Some of the development highlights in 2010 were:
 &bull; Securing additional Department of Transportation funds to support engine testing, fuel quality enforcement, and feedstock development
 &bull; Securing new U.S. DOE funds to directly support the feedstock development program
 &bull; Collaborating with other alternative fuel organizations for DOE grant funds to&nbsp; support biodiesel market education
 &bull; Developing partnerships with organizations such as the National Governor&rsquo;s Association and the National Association of State Energy Officials
 &bull; Educating producer members about funding opportunities at U.S. EPA, DOE, DOT, and USDA as well as in some individual states
 The ability to bring in outside revenue, instead of relying solely on NBB membership dues, allows for a much more concentrated effort in Washington for important policy efforts. While soybean checkoff&nbsp; funds and federal grant moneys support many of the NBB core projects, membership dues continue to be primarily directed to&nbsp; policy and lobbying efforts. This ability to leverage membership dues with other sources of funding is an important part of what NBB does for its members.

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NBB development program leverages resources, dues dollars 

A new analyzer for biodiesel distillation testing is now available. The Grabner Minidis ADXpert distillation analyzer works for both B100 and unknown samples and requires no prior distillation knowledge before testing. The unit uses fast thermocouple temperature regulation and small sample sizes to avoid erroneous recovery readings caused by mining solvents, condensates or raffinates, according to Ametek Petrolab, the Oklahoma-based company that produces the new analyzer. The unit also features an automatic cleaning system that removes residuals and eliminates flask cleaning. Along with biodiesel, the analyzer can also test various gasoline, jet fuel, biofuels, diesel products, solvents, aromatics, organic liquids and chemical blended samples. The unit can be remotely controlled and, according to Ametek, it can also be easily integrated into most existing laboratory information management systems. Regina, Saskatchewan-based Clean Power Concepts Inc. has obtained rights to exclusive patent technology capable of extracting protein to make aquaculture and other value-added feed products out of lipid sources from biodiesel plants. Originally developed as a result of scientific research conducted by the Canadian Department of Fisheries and Oceans, CPC President and CEO Michael Shenher says the patented technology is ideal for extracting proteins from canola meal where it then can be converted into livestock, chicken and fish feed products. The newly-acquired patent technology would be ideal for financially distressed biodiesel manufacturing refiners or existing producers running on reduced capacity. Shenher says the company intends to deploy the newly-acquired patented technology within its existing biodiesel production plant in Regina, a 20 MMly canola-based refinery operated by CPC&rsquo;s subsidiary General Bio Energy Inc. Although the plant has been idle for nearly a year, Shenher said the patents should revitalize its own canola operations significantly. Plans are in the works to build a large-scale canola crush plant in a decentralized location away from its production plant in Western Saskatchewan to supply canola oil feedstock to biodiesel producers. A research team at Texas AgriLife Research, a division of the Texas A&amp;M University System, is developing an optical-electronic sensor to aid in commercial-scale algae production. The system is designed to monitor algae growth in real-time, allowing for increased efficiency. According to Alex Thomasson, the AgriLife Research engineer leading the project, the sensor system essentially emits a beam of energy that interacts with an algae culture. The response is measured at multiple wavelengths to determine the optical density of the algae. While handheld sensor devises do exist on the market to complete similar evaluations, Thomasson says his team has identified commercial need for an automated, real-time, highly repeatable measurement solution. Thomasson says his team designed the sensor system to utilize multiple wavelengths of light, increasing reliability. While the actual wavelengths measured by the system have not been released, information released by Texas AgriLife Research states that Thomasson and his team experimented with wavelengths ranging from 250 to 2,500 nanometers.
 Barrington, Ill.-based EcoloCap Solutions Inc. has selected Triad Constructors Inc. out of Fenton, Mo., as the installation and commissioning partner for its new biodiesel technology. According to EcoloCap, Triad Constructors will be utilized for the sales, distribution, installation and commissioning of new Nano Processing Waste biodiesel processing units sold in North America. The company&rsquo;s website states that the units can convert a broad range of feedstock into biodiesel without preprocessing. &ldquo;Through our nanotechnology and use of additive we reduce chemical consumption and production costs significantly,&rdquo; EcoloCap states on its website. &ldquo;We also offer a glycerin refining process that will refine glycerin to medical grade 99-plus percent.&rdquo; The system is guaranteed to produce ASTM-quality biodiesel and is designed to be run in a hybrid batch/flow process. The system also includes an automated quality monitoring system and features increased alcohol recovery capabilities. The company further states that the system features a remote system control that can be accessed via the internet, can produce 900 to 18,000 gallons of biodiesel a day, and can be outfitted with an optional glycerin refining processor. Researchers at Oak Ridge National Laboratory have discovered that treating biodiesel with a high-intensity dose of ultrasonic energy can remove and prevent the formation of precipitates. The project, led by Michael Kass, a researcher in ORNL&rsquo;s Energy and Transportation Science Division, could help overcome one of the primary problems associated with the use of biodiesel in cold climates. The project was funded internally by ORNL through $20,000 in seed money. Although the work included small-scale preliminary study, Kass says the results have been intriguing. Precipitates form in biodiesel when the temperature of the fuel drops to near the cloud point. Although they are not visible, Kass said that those precipitates remain in the fuel even when its temperature increased. Robert McCormick, a principal engineer with Golden, Colo.-based National Renewable Energy Lab, provided Kass and his team with a paper that summarized the latest work on precipitates. The resulting experimentation revolved around ultrasonically treating soy-based biodiesel samples to determine the effect on precipitates. Although the research did not address the potential impact of ultrasonic treatment on cloud point, Kass said that, in theory, it should. With support from Invest Toronto, Energy Innovation Corp. has proposed to repurpose an 8,600 square-foot building into a biodiesel production facility with an initial annual output volume of 5 MMly (about 1.3 MMgy). Located in Toronto's downtown core in the port lands area, the future facility will be located on a site with existing ship, truck and rail transportation infrastructure that could be leveraged for feedstock sourcing and biodiesel marketing. According to Patrick Dwyer, EIC vice president of communications, the company is shooting for full operation by spring 2011. Locally grown flax seed initially would be the feedstock of choice for the planned facility. Utilizing a hybrid continuous flow/batch system, the company plans to extrude the flax seed into oil for biodiesel production and take the remaining meal for use as animal feed, or have it further milled into flour to be sold in the Ontario food market, Dwyer says.
 The joint venture between National Clean Fuels Inc., a Houston-based energy and clean technology company developer, and DC Biofuels LLC, an urban-based biodiesel company in the city of Washington, is one step closer to completion. In June, NACF completed a definitive agreement with DC Biofuels to work in conjunction with them to develop a 10 MMgy biodiesel production facility. Now, the two organizations have signed a letter of intent to solidify the partnership. NACF will continue to provide funding for the facility and help develop a fleet demonstration of DC Biofuels biodiesel. Using waste vegetable oil from local restaurants and institutions, the two companies hope to showcase the biodiesel through use in a municipal fleet based in the Mid-Atlantic region. The Port of San Francisco may be the new home to a 10 MMgy biodiesel production facility. After nearly two years of multiple reviews and environmental analysis assessments, the Port Commission of San Francisco approved a proposal by Darling International to convert part of a tallow rendering plant into a biodiesel facility. In 2006 there was interest in biodiesel, according to Richard Berman, regulatory specialist for the real estate division of the Port of San Francisco. At the time, Darling International was sending tallow products off to cosmetics and soaps manufacturers, and then the company proposed to divert some of that to biodiesel, Berman says. &ldquo;We agreed upon a set of terms for them to modify their lease, which would allow them to make biodiesel.&rdquo; The Port initially approved the project, but due to objections by members of the community, the process was stalled. A researcher at the University of Arkansas has created the first methane-producing microorganism that can metabolize complex carbon structures. The project could lead to the development of a microbial process to recycle waste products, such as glycerin from biodiesel plants, into a renewable form of natural gas. According to David Lessner, an assistant professor of biological sciences who is leading the research, the project focused on methanogens, which are methane-producing anaerobic microorganisms. &ldquo;These are microorganisms that grow only in anaerobic&mdash;or oxygen free&mdash;environments, but they are found in very diverse environments,&rdquo; he says. &ldquo;They grow by producing methane gas as an end product.&rdquo; One of the primary limitations of methanogens in methane production is that they are only able to digest a very limited range of substrates, Lessner says. To produce methane in nature, these mircoorganims must work in a consortium with other microorganisms that break down complex carbon sources into compounds they can consume. The basic premise of the study was to provide a methanogen microorganism with the genetic ability to break down more complex compounds and produce methane. The research focused on a strain of methanogen known as Methanosarcina acetivorans, which Lessner says can naturally consume more substrates or chemicals than most other methanogens. &ldquo;But, it&rsquo;s still limited,&rdquo; he says. The project involved isolating a gene from a strain of bacteria that is able to consume a wide range of substrates, but cannot produce methane. The gene was transferred from the bacteria to the methanogen.

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METHANOGEN-MANIA: University of Arkansas assistant professor Dave Lessner says while Methanosarcina acetivorans can consume more substrates than other methanogens, it is, however, still limited. 

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While electric and hybrid vehicles garner most of the fanfare as the next-generation of ecofriendly transportation, clean diesels are making noise of their own&mdash;in a big way. Stigmatized in the U.S. as loud and dirty, the latest iterations are getting better with every new model year. Technological advancements in fuel and engine platforms, improved fuel economy, biodiesel compatibility, increased torque, complex emissions control systems and exceptional resale value are just some of the reasons why diesel-powered vehicles are preferred in many parts of the world.
 Interestingly, the U.S., where diesel passenger vehicles never really caught on, has seen an uptick in public interest for diesel-powered vehicles lately, and this trend is expected to pick up, according to information compiled by the U.S. Coalition for Advanced Diesel Cars. Its Executive Director Jeff Breneman tells Biodiesel Magazine that, from January 2009 to January 2010, consumers preferred a diesel powertrain over their gasoline-powered or hybrid counterparts. This shift in buyer propensity, Breneman describes, is defined as a &ldquo;take rate.&rdquo;
 &ldquo;The take rate for the hybrid models are actually lower than that of the diesels right now,&rdquo; Breneman says. &ldquo;Overall, we&rsquo;re seeing an average 10 to 15 percent take rate for the hybrids and more like a 30 to 50 percent take rate for diesels right now. We&rsquo;ve seen take rates of nearly 50 percent on a number of diesel models and even higher on a few, such as the Volkswagen Jetta and Audi A3. And most of the SUVs, like the Audi Q7 and Volkswagen Touareg, are all between 40 and 50 percent.&rdquo;
 Similarly, industry prognosticators like JD Power and Associates forecast a significant increase in diesel light-duty vehicle sales within the next two to three years, with the electric vehicle and hybrid markets expected to trail behind diesel&rsquo;s emergence, according to Michael Omotoso, senior manager global powertrain. &ldquo;For the past couple of years, it&rsquo;s been in the 2 percent range,&rdquo; Omotoso says. &ldquo;We expect that number to go up to 7 percent in 2015 and to 8 percent by 2017, which is the end of our forecast period.&rdquo;
 While there are some diesel vehicles available in the U.S., they largely remain a minority market. Because a market for heavy-duty pickup diesel models already exists there, Omotoso is seeing German automakers like BMW, Mercedes, Audi and Volkswagen exploiting the niche diesel passenger luxury vehicle segment, with a high percentage of diesel passenger vehicles set to launch in the coming years.
 For BMW, market acceptance for both its U.S. diesel passenger offerings, the 335d sedan and X5 xDrive35d, have gained significant momentum during 2010, according to spokesman Dave Buchko. &ldquo;Sales of the 335d are up 162 percent so far [in 2010] compared to last year, and X5 xDrive35d sales are up 106 percent from [2009],&rdquo; Buchko says. &ldquo;So far [in 2010], nearly one in four X5s sold in the U.S. is a diesel.&rdquo;
 Much of the growth in U.S. diesel sales, according to Omotoso, hinges on Corporate Average Fuel Economy standards, which prescribe specific greenhouse gas (GHG) emission reduction and improved fuel economy targets across all model fleet types, and clean diesels are expected to help achieve those goals.
 With emissions and fuel economy standards set both in the U.S. and abroad, many automakers are already testing biodiesel to see how the advanced biofuel will help them reach federally mandated fuel efficiency and emission targets.
 Biodiesel&rsquo;s Factor 
 For nearly 90 years, Fiat has been synonymous with introducing some of the most cutting-edge diesel engine technology on the market. The Multijet engine, which was produced in 2009, is an example of Fiat&rsquo;s innovative work on the diesel motor. But this is not to say that the Italian original equipment manufacturer (OEM) hasn&rsquo;t come head-on with challenges to ensure its products are capable of running on higher biodiesel blends.
 Although European diesel powertrains are currently capable of running on the continent&rsquo;s 7 percent mix of biodiesel in its diesel pool, Fiat has begun additional testing of higher biodiesel blends in preparation for a potential increase from B7 to B10. Pier Franco Ciselli, of Fiat&rsquo;s Alternative fuels division, says implementation likely won&rsquo;t be until 2012 or 2013. &ldquo;B10 is something that we are going to explore quite carefully in the next year,&rdquo; Ciselli says. &ldquo;However, nothing will be launched on the market by Fiat before a clear specification is decided.&rdquo;
 In light of its cautious yet calculated approach to testing B10 in future diesel engines, Ciselli says Fiat is actively testing B20 and B30 blends within closed heavy-duty fleets.
 Although virtually all diesel engines are approved to run on B5, Fiat is just one in a long line of other OEMs grappling with the issue of solving biodiesel&rsquo;s tendency to contribute to fuel dilution in the engine oil crankcase, and clogging of fuel filters, the latter notably in cold weather.
 In the U.S., General Motor Corp.&rsquo;s Duramax 6.6-liter turbo diesel engine is capable of running on B20. The new Duramax will power the redesigned 2011 Chevy Silverado and GMC Sierra heavy-duty pickups, as well as the Chevrolet Express and GMC Savana full-sized vans. According to Shilesh Lopes, senior fuels engineer for GM, the company made some notable modifications and upgrades for its fuel system to be compatible with B20.
 &ldquo;Specifically for biodiesel, we upgraded all of our seal and gasket materials to withstand the ester content of biodiesel, and we included an improved fuel filter that includes a coalescing element,&rdquo; he says. &ldquo;We also modified our fuel heating strategy to specifically address the biodiesel issue since biodiesel naturally has a higher cloud point. What we&rsquo;ve done is we basically brought the heating utensils right to the fuel filter so that any new clogging of the filter could be avoided.&rdquo;
 Across the pond, German engine manufacturer Deutz AG, which manufactures engines for automotive, agriculture, marine, mobile and gen-set applications, released a service fluid recommendations announcement last year approving various blends of biodiesel for different engine applications, ranging from the standard European B7 blend to B30. In some cases Deutz approves the use of neat biodiesel, or B100. All Deutz engines from Tier 4 Interim/Stage III B are approved for B7 use, according to the company.
 Biodiesel inherently reduces most tailpipe-out and greenhouse gas emissions, but advancements in emission reduction technologies, such as selective catalytic reduction systems, lean NOx traps and exhaust gas recirculation as different means to control nitrogen oxides, and diesel particulate filters for soot collection&mdash;all of which are driven by government regulations&mdash;already make the new clean diesel models clean. A good thing can always get better, and while diesels have come a long way in improving efficiency, emissions and public appeal, the U.S. EPA and U.S. DOT&rsquo;s National Highway Traffic Safety Administration released proposed regulations to establish the nation&rsquo;s first standards to improve the fuel efficiency and reduce the GHG emissions of medium- and heavy-duty vehicles. The regulations are essentially an extension of the Clean Cars Program, which established similar requirements for light-duty vehicles earlier this year. The agencies proposed new standards for three categories of heavy-duty trucks; combination tractors, heavy-duty pickups and vans, and vocational vehicles. For combination tractors, the agencies have proposed engine and vehicle standards that begin with model year 2014 vehicles and achieve up to a 20 percent reduction in carbon dioxide (CO2) emissions and fuel consumption by model year 2018. For heavy-duty pickups and vans, the proposal separates gasoline and diesel truck standards. Diesel-fueled vehicles must achieve a 15 percent CO2 and fuel reduction. Both standards would be phased in from model years 2014-&rsquo;18. Finally, the proposal would require vocational vehicles to achieve up to a 10 percent CO2 and fuel consumption reduction between the same model years. The final rule is expected to be published soon, but the proposal indicates that the diesel technology has no time for stagnation as improvements are always being sought, even when those being improved upon are themselves models of accomplishment.
 What To Expect in 2011&mdash;And Beyond
 French automaker Peugeot plans to introduce a diesel-electric version of its 3008 series crossover HYbrid4 model by spring. The car can operate in three driving modes: electric-only, diesel-only or a combination of both. The diesel hybrid achieves 69 mpg and can go zero to 60 mph in 8.8 seconds.
 Japanese automaker Mazda has officially announced plans to launch its clean diesel Mazda6 model to the U.S. by market in 2012. In addition, the company intends to introduce its SKY-D diesel engine, which Mazda promises to increase fuel economy by 30 percent over its current 2.2L diesel (not available in U.S.). Mazda says the vehicle will return at least 43 mpg. The engine is part of a new family of SkyActiv diesel engines with an all new transmission called Sky-Drive. Already under the hood in models sold in Europe and Japan, the design is expected in the U.S. market by sometime in late 2013 or early 2014, according to Mazda spokesman Jeremy Barnes.
 Also, as reported by Biodiesel Magazine last year, the future may hold an interesting marriage between ethanol and diesel emissions control if Tenneco Automotive&rsquo;s plan to use E85 instead of urea dosing for SCR NOx control catches on. There is an established E85 infrastructure that could double as reductant stations so when drivers of SCR-equipped diesels run out of the dosing agent, they can fill up at one of hundreds of E85 stations across the U.S.
 Omotoso says expect more fuel efficient diesel engines in GM&rsquo;s line of light-duty trucks in the coming year or two. The company developed a 4.5L diesel engine that it was initially going to launch in its light-duty pickups, but pulled it out due to the economic collapse of 2008 and eventual bankruptcy. &ldquo;The engine is developed and ready to be launched,&rdquo; Omotoso says.
 Omotoso also expects Nissan to use Renault&rsquo;s diesel engines in its future diesel passenger and light-duty models. &ldquo;They have 4-cylinder and 6-cylinder diesel engines that we expect to see in the Maxima and Altima in the coming year or two.&rdquo;&nbsp;
 No matter what new clean diesel vehicles are introduced, one fact remains, according to Breneman. &ldquo;At the end of the day, every country needs a portfolio of vehicle technologies,&rdquo; he says. &ldquo;Clean diesels are simply one of them that have undergone dramatic improvements over the years. Overall, the technology has improved and they&rsquo;re still fun to drive.&rdquo; Author: Bryan Sims Associate Editor, Biodiesel Magazine (701) 738-4974 <a href="mailto:bsims@bbiinternational.com">bsims@bbiinternational.com</a>

ITALIAN INNOVATION: Fiat\&#39;s 1.3L Multijet II engine is one of the company\&#39;s signature developments in common rail technology.

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SPLIT DECISION: Public interest in optional diesel engines, where available, has been strong. The percentage favors consumers that buy the diesel engine option versus those selecting the hybrid on vehicles that offer choice, which points to a glaring

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Clean diesel technology greatly improves efficiency and emissions profiles of compression-ignition power

Clean  Diesel  Developments

Hybrid trucks are already in commercial production, and with Peugeot&rsquo;s pending launch of the world&rsquo;s first diesel-electric hybrid passenger car, the industry is poised for considerable growth. Although the U.S. lags behind Europe in terms of favoring light-duty diesel applications, interest may soon grow as the European market takes off.
 The environmental benefits of diesel hybrid technologies are impressive, allowing for an average fuel consumption saving of 20 to 35 percent. When biodiesel is added to the fuel mix, the environmental benefits are even more pronounced, especially when it comes to carbon dioxide emissions.
 In mid-2011, Peugeot will launch the world&rsquo;s first production-scale diesel-electric hybrid passenger car. The 3008 HYbrid4 features an average fuel consumption savings of 35 percent. A traditional two-liter, 163-horsepower diesel engine mounted in the front of the vehicle, and a 37-horsepower electric engine mounted in the rear, provide the car with a maximum power output of 200 horsepower, says Peugeot spokesman Martin Alloiteau. The electric motor can be used as the primary power source during city driving, adds Peugeot spokesman Laurent Debure, but can also be used to boost performance during highway driving.
 The 3008 HYbrid4 can be driven in three different modes. The ZEV&mdash;or Zero Emissions Vehicle&mdash;mode allows the driver to run the vehicle in an all-electric mode when in the city. When placed in auto mode, the electronic components of the car automatically control the entire system, including transitions between the diesel engine and electric motor. Finally, four-wheel drive mode allows both powertrains to work together, with the rear wheels driven by the electric motor and the front wheels powered by the diesel engine.
 Although the Peugeot&rsquo;s 3008 HYbrid4 is particularly notable for its hybrid technology, Debure adds that great care has been taken to ensure the car meets Peugeot&rsquo;s high-performance standards as well. &ldquo;We&rsquo;ve maintained the driving pleasure of the car, which is very important for our brand,&rdquo; he says. &ldquo;We don&rsquo;t only talk about the low fuel consumption of the vehicle, but also try to focus on its performance and drivability. It is a clever wedding between the diesel and electric engines, and we are using the most efficient technologies for this hybrid solution. That&rsquo;s why we think our world premier will be a success. It&rsquo;s not a boring car, and it has been designed to be a pleasure to drive.&rdquo;
 While production-scale diesel-electric hybrid passenger cars are a new development for the industry, diesel hybrid technology has been commercially available in heavy-duty trucks for several years. In fact, Eaton Vehicle Group has been working to develop electric hybrid systems for two decades and has been producing them commercially since 2007. The company also began offering a hydraulic hybrid system in 2010.
 Eaton provides its technology to major truck and bus manufacturers around the world. The company offers several hybrid technologies, all of which are fuel neutral and can be added to diesel powertrains, says James Parks, Eaton&rsquo;s manager of global communications-hybrid. Eaton&rsquo;s hybrid electric technology maintains the conventional drivetrain architecture and is designed to recover power typically lost during braking, and stores it in batteries. The company also offers two hybrid hydraulic systems: one that offers regeneration and launch assist, and another that completely replaces the conventional drivetrain.
 Volvo Bus Corp. also has several different hybrid technologies in production today, including those designed for the European and North American markets. The company has been working to develop its diesel hybrid technology since 2002 and began vehicle production in 2006. &ldquo;We started the industrial-scale production in May 2010,&rdquo; says Edward Jobson, Volvo Bus environmental director, noting that before reaching industrial production, his company did on-demand building.
 Volvo&rsquo;s diesel hybrid buses are able to achieve a 30 to 35 percent reduction in fuel consumption in the city, and a 20 to 30 percent reduction when highway driving. The Volvo 7700 Hybrid model is what&rsquo;s known as a parallel hybrid. This means that the diesel engine and electric motor can work either independently or in unison to power the bus. The electric motor is used to start the vehicle and can power acceleration up to approximately 20 kilometers per hour (12.5 mph). When traveling at higher speeds, the diesel engine takes over, supplying the power. Batteries used to power the electric engine are charged by both the brakes and the diesel engine.
 Markets, Demand, Cost
 Peugeot&rsquo;s 3008 HYbrid4 vehicle has been designed specifically for the European market. The car will initially be available only in Eastern and Western Europe. Diesel passenger cars in the U.S. don&rsquo;t have a very good image, which is why hybrid diesel cars&mdash;at least in the beginning&mdash;will be designed for the European marketplace, says Alloiteau. That doesn&rsquo;t mean the vehicle won&rsquo;t be introduced into other markets in the future, but in the beginning it really makes sense to focus on Europe, he says.
 &ldquo;The European market is very keen on diesel engines,&rdquo; says Debure. In fact, Alloiteau notes that at least half of the passenger cars on European roads are equipped with diesel engines. According to Debure, diesel hybrids are also significantly more efficient and less expensive than their gas-electric hybrid counterparts. &ldquo;We have chosen to do the diesel because our diesel engine has very good fuel consumption performance, so it was a good base to make a hybrid,&rdquo; Debure says. &ldquo;If we had chosen a gas engine with higher fuel consumption, it would be difficult for us to reach our objectives in terms of reducing consumption.&rdquo;
 &ldquo;In Europe, we are facing very demanding norms in terms of reductions of emissions,&rdquo; Alloiteau says, noting that the carbon dioxide reduction goals are particularly demanding. Our brand is a leader in the field, and we want to maintain our position, he says. In fact, the 3008 HYbrid4 is just the beginning. Since the HYbrid4 technology is built into the rear suspension of the vehicle, it&rsquo;s very adaptive to similar platforms and will be added to more Peugeot and Citro&euml;n vehicle models in the future. &ldquo;The technology will expand to other cars&mdash;not small cars and very compact cars in the beginning, but more on the medium and medium-high segment of cars,&rdquo; Alloiteau says. &ldquo;In 2015, we think for Peugeot and Citro&euml;n the sales on the open market could be approximately 100,000 cars equipped with hybrid diesel technology.&rdquo;
 While the price of the 3008 HYbrid4 has not yet been released, it&rsquo;s clear there will be a price premium when compared to traditional diesel passenger vehicles. However, a significant portion of the additional cost can be recouped through fuel savings. The price premium for diesel hybrid technology is also expected to reduce as the technology is transferred to additional models and economies of scale improve.
 Increased future demand for diesel hybrid technology is not exclusive to passenger cars. Volvo also supplies gas-powered buses to the market. Since the May 2010 launch of its 7700 Hybrid diesel model, Jobson notes that his company has sold more hybrid diesel buses than gas buses. In fact, Volvo has received orders for nearly 200 hybrid buses in its first six months of production. In mid-December, the company secured its largest single order to date when bus operator Arriva ordered 27 Volvo 7700 Hybrid buses, which will be used in Dordrecht, Netherlands.
 &ldquo;Customers are very happy with the hybrid, with the performance, the reliability and the fuel consumption, of course,&rdquo; Jobson says. &ldquo;Also&mdash;dare I say&mdash;the pricing.&rdquo; Even though hybrid technology does add cost to the vehicle, Jobson says that most customers understand that they can save money over the lifetime of the vehicle. Many also see it as a sort of insurance to protect them from rising oil prices, he continues. Strong demand also means that Volvo will be offering more hybrid options to its customers in the future.
 While Peugeot and Volvo are most active in the European marketplace, Eaton has been more active in North American markets. &ldquo;The majority of our sales are in North America; with China, city bus sales growing quickly,&rdquo; Parks says. &ldquo;We&rsquo;re working hard to grow in Europe, but a lot of the manufacturers there are vertically integrated and, when it comes to hybridization, they&rsquo;re trying it themselves.&rdquo; Even with obstacles in the European marketplace, Parks says interest in Eaton&rsquo;s products has been growing quickly. &ldquo;Sales have increased steadily since production began in 2007, and we absolutely expect that to continue,&rdquo; he says.
 Like Volvo, Eaton has received extremely positive feedback from its customers, many of whom are placing additional orders. &ldquo;Some of our earliest customers, who [bought] one or two trucks, are now returning and placing orders for 10 or more hybrids at a time,&rdquo; Parks says. Eaton is also working to expand its offering. &ldquo;We&rsquo;re definitely working to improve the systems and offer our customers more combinations that better fit the needs of their customers,&rdquo; he says.
 Considering Biodiesel
 Eaton&rsquo;s hybrid systems are all designed to be fuel-neutral, and are compatible with biodiesel. &ldquo;It really doesn&rsquo;t matter what fuel runs through the truck with our system,&rdquo; Parks says. &ldquo;We really don&rsquo;t touch the fuel.&rdquo; Rather, each manufacturer employing Eaton&rsquo;s hybrid technologies likely has its own unique thresholds and guidelines for biodiesel use in its vehicles.
 According to Debure, Peugeot&rsquo;s 3008 HYbrid4 is compatible with fuel containing up to 30 percent biodiesel. &ldquo;All of our diesel engines are compatible with B30,&rdquo; he says. Customers who chose to fuel their vehicles with biodiesel-blended fuel will compound fossil-fuel reduction benefits that the hybrid can achieve on its own. This is because the hybrid technology alone can reduce fossil fuel usage by approximately 35 percent. A diesel hybrid fueled by B30 will further reduce consumption of fossil fuels by nearly one-third.
 Volvo&rsquo;s actions in regard to biofuel are particularly notable. The company is currently field testing its hybrid buses with B100. &ldquo;The evaluation is not finished yet, but the expectation is that we will find that B100 is okay from a technical standpoint, but that you will need to take some service measures,&rdquo; Jobson says.
 When it comes to biodiesel, Volvo is only testing B100 in its diesel hybrid bus systems, no blends. &ldquo;Either you have it or you don&rsquo;t,&rdquo; Jobson says. &ldquo;If you allow biodiesel, you should be able to run them on up to 100 percent.&rdquo;
 Volvo&rsquo;s field tests are expected to conclude in 2011. &ldquo;We don&rsquo;t know exactly when they will be finished, but we know that it will be finished [this] year,&rdquo; Jobson says. Some of the anticipated service measures that are expected to be required for biodiesel use include increased intervals for oil and fuel filter changes. &ldquo;You will also have to change&mdash;before you start with the B100&mdash;some seals and the fuel lines,&rdquo; he continues. Specifically, fuel lines made of an alloy that contains copper must be replaced with stainless steel.
 Although it is likely Volvo will approve the use of B100 in its hybrid buses, only time will tell if customers will be interested in taking the steps needed to implement the fuel. The use of biodiesel is largely politically driven at the moment, Jobson says, noting that interest in biodiesel tends to rise and fall with political sentiment. &ldquo;I think there will be some local requests, but it&rsquo;s very early to guess what the demand will be on the market.&rdquo; Author: Erin Voegele Associate Editor, Biodiesel Magazine (701) 850-2551 <a href="mailto:evoegele@bbiinternational.com">evoegele@bbiinternational.com</a>

INCREASING EFFICIENCY:  Volvoâ€™s 7700 Hybrid bus increases fuel efficiently by up to 35 percent in town, and up to 30 percent on the highway.

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How biodiesel makes a good thing—diesel-electric hybrid technology—even better

Diesel Hybrid Market Fires Up

Some people say the greatest benefit of biodiesel use has to do with independence, or greenhouse gas reductions, or even as an alternative option for an economy that needs all the energy it can get. Simon Hauger, a former math and physics teacher turned biodiesel-hybrid vehicle developer, holds a different opinion of biodiesel&rsquo;s greatest benefit, however, and he has the students of West Philadelphia High School&rsquo;s EVX team to thank.
 More than 10 years ago, Hauger began searching for a way to positively engage the inner-city kids he saw struggling to graduate, let alone make it into college. The answer he found was fueled by biodiesel. &ldquo;When you think of all the negative stereotypes,&rdquo; Hauger says of the West Philly community, &ldquo;unfortunately, a lot of them are true. The inner-city high schools are pretty tough.&rdquo; But, by combining the fuel qualities of biodiesel with a hybrid electric motor system, Hauger found a way to create a sustainable after-school program that eventually flipped the graduation rate for those participating completely on its head. Compared with those attending West Philadelphia who aren&rsquo;t EVX members, 70 percent of whom will not attend a post secondary institution, 80 to 90 percent of all EVX team members not only graduate, but attend post secondary schools all across the country.
 This is more than just another feel-good story about a caring, hardworking teacher and a successful after-school program that just happens to include biodiesel, however. Look at the publicity the student team has already received from the Discovery Channel, the Today Show, and President Obama himself, to see the importance of this school and these kids. Simon, who grew up in West Philly, shows that to measure the benefits and impact of biodiesel, there&rsquo;s more to it than any life-cycle assessment or greenhouse gas (GHG) reduction level test could ever account for.
 From Go-kart to Supercar 
 The EVX team hasn&rsquo;t always produced biodiesel hybrid vehicles. The story starts in the shop of the Automotive Academy at West Philadelphia High School (think of it as the vocational wing of the school), with a go-kart that just happened to be lying around. After converting the go-kart to run on electricity with the help of Simon and other instructors, the students started showing interest. &ldquo;We were looking for ways to really engage the kids and help them develop their skills,&rdquo; Hauger says. &ldquo;There was no master plan, it just kind of happened.&rdquo;
 After recognizing the potential of the program and the reaction from his students, Hauger began a fundraising campaign, raising money, expertise and the necessary components to build electric vehicles&mdash;and he was successful. The team competed in a national competition, the Tour de Sol, which was based on low emission levels in conjunction with high fuel efficiency, and won it with an electric car built in the school&rsquo;s shop. The principal and other teachers thought the team was getting in way over its head, Hauger says, but that didn&rsquo;t stop him from continuing the program and researching national competitions for the team to compete in. The element of competition drove the students to improve in the classroom as well. If any of the students on the team received any D&rsquo;s or F&rsquo;s, had an absentee rate of 20 percent or higher, or were suspended from school, they were &ldquo;benched&rdquo; until they improved, Hauger says.
 &ldquo;In 2001, we were competing against a modified biodiesel vehicle in the Tour de Sol,&rdquo; he says. &ldquo;That was our first experience with biodiesel.&rdquo; Following that experience, the team, made up of students ranging from freshman to seniors, became enamored with biodiesel. The team took a Jeep and turned it into a biodiesel hybrid, using a Yanmar two-cylinder industrial lawn mower engine fueled by biodiesel to generate electricity for the vehicle. &ldquo;We basically had a lawnmower-type throttle, and when we saw the battery power dropping we just kind of throttled it up.&rdquo;
 After learning more about the properties of biodiesel, and even making their own from waste vegetable oil for a while, the team realized, as Simon notes, &ldquo;There is no downside to it.&rdquo; It&rsquo;s better for the engine, the lubrication and cleaning properties make it better for the car and better for the air, he adds. The new knowledge of biodiesel, combined with the experience at the 2001 Tour de Sol, added to the team&rsquo;s desire to build hybrid vehicles and helped transform once-struggling teens into young innovators capable of competing at a national level, teens who would eventually win hybrid vehicle contests four separate times. And their accomplishments weren&rsquo;t achieved solely because of Hauger's enthusiasm. &ldquo;If you hang out with us,&rdquo; he says, &ldquo;there is a lot of dialogue. It isn&rsquo;t like adults are just driving the decision making.&rdquo;
 In 2007, the team put all its work to the test, and made the leap from participating in low-prize competitions like the Tour de Sol, which netted only a few thousand dollars for a win, to a $10 million dollar first-place prize competition known as the Progressive Insurance Automotive X Prize, a global competition calling for vehicles that were affordable, safe, desirable and achieved at least 100 miles per gallon.
 &nbsp;&nbsp;&nbsp; Quest for the X Prize
 The team relished Hauger's challenge to compete nationally. Using the sleek design offered by the Factory Five GTM sports car, the team converted a powerful electric engine to run, in part, on biodiesel. Hauger says the team could not afford the expensive batteries required to run the electric engine so they incorporated a Volkswagen TDI engine, the ALH, to help. The whole idea, he says, was that &ldquo;if you are driving around the city, you run on just the electric motor. But if you want to turn it up a little, you can turn on the diesel engine to get added power.&rdquo; In the GTM, the TDI engine ran the rear wheels and the electric motor ran the front wheels.
 The work by the team garnered national attention, drawing exposure from the Today Show and the Discovery Channel, and the attention continued to grow as the team made it further and further in the X Prize.
 The competition began with each of the 111 teams having to present a business plan that showed its entry could be viably produced to the tune of 10,000 vehicles per year. Hauger enlisted help from Drexel University to create a full business plan for the EVX team. Out of all the teams, which represented 11 different countries and ranged from start-ups to multinational conglomerates, the West Philly crew was the only high school-based team to participate, and one of only 48 teams that made it through the business plan round. After the first on-track event, it then made it to the round of 22 teams, before its journey ended due to charging issues. &ldquo;In hindsight,&rdquo; Hauger says, &ldquo;we overlooked our charging scenario and ended up wasting a lot of electricity when we were charging our cars, so we didn&rsquo;t make the cuts for the finals.&rdquo; The team, however, impressed the competitors enough that the winners actually decided to partner with EVX for their next project.
 &ldquo;It&rsquo;s not a secret formula, having a hybrid vehicle,&rdquo; Hauger says. &ldquo;I think the thing that makes the program work is getting something good to do, building a project that is real.&rdquo; Ann Cohen, the team&rsquo;s manager, couldn&rsquo;t agree more. After years working for the automotive mechanics Union in Philadelphia, Cohen joined the EVX team and started fundraising. While she pins her excitement and interest in the team on the ability of the students to continually beat &ldquo;the big boys,&rdquo; she points to the program&rsquo;s impact on energy and breaking America&rsquo;s addiction to foreign oil as its greatest assest.&ldquo;The most important thing to me,&rdquo; she says, &ldquo;is giving an incredible variety and wealth of opportunities to have a voice in one of the most critical issues in the country. I don&rsquo;t think it can be any more important than that.&rdquo;
 That voice Cohen refers too, seen through the commitment by Hauger and his team to continue churning out sleek, sexy, hybrid vehicles of the future, has been heard by President Obama as well. In a speech based on the EVX team after it was officially eliminated from the X Prize, the president spoke about the importance of the team&rsquo;s work. &ldquo;What they had was a program that challenged them (the students) to solve problems and work together. To learn and build and create, and that&rsquo;s the kind of spirit and ingenuity that we have to foster. That is the potential that we can harness all across America,&rdquo; he said.
 To say that for more than 10 years Hauger&rsquo;s EVX team members have reached that potential, evidenced by the team&rsquo;s improved graduation and post-secondary institutional acceptance rates, might be an understatement. &ldquo;To say it out loud,&rdquo; Hauger says of the team&rsquo;s success, &ldquo;sounds kind of ridiculous&mdash;that an inner-city high school on a shoestring budget could develop a really compelling hybrid sports car. But we did.&rdquo; Those cars are cool, Cohen says, &ldquo;but the kids are cooler.&rdquo;
 Without a B20 blend of biodiesel it might be hard to envision the EVX team&rsquo;s success turning out in a similar way, and arguing that the greatest benefit created by biodiesel has more to do with a new hope for a bunch of students from West Philadelphia than GHG reductions or energy independence, might be going too far&mdash;or maybe not. Of the team&rsquo;s accomplishments, Obama said, &ldquo;These are actually the kinds of things that 10 years from now, 20 years from now, we are going to look back and say this is something that made a difference.&rdquo; &nbsp;&nbsp;&nbsp; Author: Luke Geiver Associate Editor, Biodiesel Magazine (701) 738-4944 <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a>

GROWING UP: Each year the EVX team consists of roughly 10 to 15 high school students, and each year several of the former team members return to check in on the new members.

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CAUGHT UP:  Simon and Jerry DiLossi, a member of the teamâ€™s auto faculty, work in conjunction with the students to create the optimal biodiesel hybrid vehicles. 

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ON FIRE:  Hauger says the kids wanted a capable car that looked hot on the street. They choose the K1 Attack. 

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How the EVX Hybrid team from West Philly High School does biodiesel 

February 2011

Business Briefs

Business Briefs

Business Briefs

Columns

Homegrown Energy

The Reemergence of Gasification for Energy and Fuels

Happy Holidays from the NLRB—Now Post This

It's Back

Annual Legal Checkup

Satisfying the End User

Featured

Powerful Crops

Energizing Marginal Lands

Full Service Energy Farm

Clean Diesel Developments

Diesel Hybrid Market Fires Up

The Greatest Benefit

Contributions

BCAP Relaunch Should Bring New Biomass Producers into the Supply Chain

Harvesting Forest Renewables Sustainably

Flowability: A Complex Issue

Canada's Environmentally Sustainable Biodiesel Feedstock

New Process Uses SCP Technology

February 2011.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

Business Briefs

Business Briefs

Columns

Homegrown Energy

The Reemergence of Gasification for Energy and Fuels

Happy Holidays from the NLRB—Now Post This

It's Back

Annual Legal Checkup

Satisfying the End User

Featured

Powerful Crops

Energizing Marginal Lands

Full Service Energy Farm

Clean Diesel Developments

Diesel Hybrid Market Fires Up

The Greatest Benefit

Contributions

BCAP Relaunch Should Bring New Biomass Producers into the Supply Chain

Harvesting Forest Renewables Sustainably

Flowability: A Complex Issue

Canada's Environmentally Sustainable Biodiesel Feedstock

New Process Uses SCP Technology

February 2011