PPrompted by the high cost of energy in industrial processing, a research and development company, Carbon Diversion America Latina S.A. de C.V. (CDAL), was founded in 2007, in Mexico, to develop new paradigms for producing renewable energy by converting biomass in a closed-cycle energy system.
 Tranformacion Carbon y Energia, S de R.L. de C.V. (TCE) will be the first facility to use agave biomass as a renewable feedstock and operate the technology from CDAL, according to Franciso Villasenor, president and CEO of Carbon Diversion, who has been researching second-generation biofuels and believes that converting agave residues will revolutionize heat and electricity production in Mexico. The first stage of the process will involve densifyingâ€•and in subsequent stages flash carbonization and torrefactionâ€•the biomass into pellets and briquettes that can be used to produce biocarbon, biofuel, steam and electricity.
 This process will allow TCE to offer an efficient and responsible solution to reduce organic residues and carbon emissions.
 During the processing of agave, tequila is produced along with solid residues that are hard to dispose of. Specifically, the project operated by TCE has dual objectives: to ecologically dispose of the agave waste by converting it into a solid fuel, which will be considered a second-generation renewable fuel because it doesn&rsquo;t use feedstocks that are consumed by humans, and to make use of left over agave leaves that previously had no other purpose, thereby solving a current environmental problem.
 With this process, the formation of carbon dioxide, as well as the methane that is produced inside the agave bagasse piles, will be avoided.
 Project Status
 The first facility has been installed in Amatit&aacute;n Valley in Jalisco State, Mexico, 40 kilometers (24 miles) from Guadalajara City, in order to certify the process and system as well as the production of agave briquettes, agave pellets and biocarbon. In other words, the pilot plant will use agave biomass as a feedstock to demonstrate its industrial viability.
 Since CDAL was founded, it has three pending patents registered in the intellectual property institute&mdash;Instituto Mexicano de Propiedad Industrial.&nbsp;
 The first patent covers the process and system to transform the agave biomass into biocarbon and simultaneously into energy. The second is related to the industrialization of the agave biocarbon, the mixes and the byproducts. The third is a patent for the mix and the method of preparing a solid fuel made out of Agave spp, and the biofuel in briquette and pellet forms.
 TCE will provide a disposal method for the waste produced in the agave industry, including tequila distilleries, inulin and honey factories, ethanol facilities and industrialized pharmaceutical alcohol production. TCE will be the first of many plants that will be installed in Mexico in the short term as the pilot project is developed.
 The method to prepare this solid fuel from agave biomass involves pretreating the feedstock. Some of the outstanding properties of the new densified agave fuel are:
 &bull; High fixed carbon
 &bull; Low moisture
 &bull; High density
 &bull; Excellent superior heating value
 &bull; Extraordinary chemical composition
 &bull; Lignocellulosic material
 &bull; Long-period consumption
 &bull; Convenient dimensions
 &bull; Cylindric format
 The pellets and briquettes are in cylindrical form and can be produced from agave residue and other biomass including clean wood waste, which may consist of sawdust and shavings, wood chips and other organic waste. It is a fuel that is widely used in developed countries for power generation through combustion in boilers and stoves.
 Economically speaking, the heat that&rsquo;s generated using agave pellets or briquettes costs less than the cost to do so with diesel or other fossil fuels. Author: Franciso X. Villasenor President and CEO, Carbon Diversion America Latina S.A. de C.V. 52-33-37206455 <a href="mailto:fcoxvpv@gmail.com">fcoxvpv@gmail.com</a>

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HEAT SOURCE: Agave residue, woody biomass and other organic waste can be densified into pellets and briquettes that can be used to generate heat less expensivly than using diesel or other fossil fuels.

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A pilot project in Mexico will use the waste from agave processing to produce biocarbon, biofuel, steam and electricity.   

Integration and Use of Solid Waste from Agave

The European Union&rsquo;s goal of having at least 20 percent of its energy consumption be produced from renewable energy sources by 2020 has led to an increase in the demand for wood pellets, which plants in the U.S. and Canada are eager to supply (see page 16).
 In fact, an estimated 1.6 million tons of pellets were shipped from North America to the Netherlands, the U.K. and Belgium in 2010, which is double the amount that was exported in 2008, according to the North American Wood Fiber Review.
 BBI International, publisher of Biomass Power &amp; Thermal, is well aware of the increase in pellet use in the EU and the interest of many in North America and other countries to produce pellets for export and will be publishing a new biannual magazine called Pellet Mill Magazine.
 The magazine will cover everything from production technology to supply and demand to pellet fuel standards to policy and environmental standards. The first issue of the magazine will be printed in April and sent to all Biomass Power &amp; Thermal subscribers. It will also be distributed to attendees at our International Biomass Conference &amp; Expo and at all of our regional biomass conferences.
 The first edition of Pellet Mill Magazine will include columns from industry leaders, several staff written features and a couple of features from freelancers, one in Brazil and the other in the U.K.
 Although it may be too late for you to send in feature-length contributions for the first issue, which are due March 30, the deadline for the second issue is in mid-September. So if you have a story idea or want to write a contribution for the second issue, please let me know.
 Speaking of pellets, you will want to read this month&rsquo;s Thermal Dynamics column by John Ackerly, president of the Alliance for Green Heat and a member of the Biomass Thermal Energy Council (see page 10). Ackerly writes about how the U.S. needs to have a national inventive program to replace older wood and pellet stoves, set stricter emissions standards for new stoves and develop strategies to concentrate on the use of pellet appliances instead of wood stoves in urban air-quality and non-attainment areas. These measures would ensure that heating with wood and pellet stoves continues and would make it more attractive to lawmakers.
 It is not really far-fetched to imagine the government helping to replace wood or pellet stoves, when it is currently helping to replace homeowners&rsquo; appliances with energy efficient models and has even replaced people's clunker cars.
 It is important for our legislators to understand how important the wood and pellet stove industry is to America&rsquo;s energy independence and the job market. And, it&rsquo;s much easier to get government support if the industry is as clean and green as possible.

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BBI International to Publish Pellet Magazine 

Throughout the month of February, the biomass industry engaged in a campaign to ensure the continued funding of the Biomass Crop Assistance Program.
 Congress is still debating the line items that will be included in the final 2011 budget&mdash;and we are making our case that BCAP should be one of them.
 We want to impress upon our lawmakers the huge bargain BCAP provides our nation. This source of funding pales in comparison to the resources given to other renewable energy sources&mdash;and it provides many benefits to the biomass industry, which in turn are passed on to the nation in dividends. Thanks to the willingness of many of you to speak on the industry&rsquo;s behalf, we&rsquo;ve been able to begin to illustrate to our leaders the widespread network of Americans who rely on BCAP.
 Representatives of all aspects of the biomass industry&mdash;from suppliers and truckers to loggers and plant managers&mdash;signed a letter of solidarity that was sent to Congressional leadership about the need to preserve this program.&nbsp; Many others e-mailed and called their senators to give a firsthand perspective on the benefits biomass provides their home state because of BCAP funding.
 The letter emphasized the many ways BCAP supports the critical role played by biomass in the nation&rsquo;s renewable energy sector&mdash;and it shed light on the &ldquo;bargain&rdquo; that BCAP provides Americans. For a mere fraction of the cost of funding other renewable energy sources, Americans receive half of the nation&rsquo;s clean energy, thousands of jobs and forest fire prevention.&nbsp;&nbsp;&nbsp;
 We don&rsquo;t yet know whether the BCAP budget will be preserved. What we do know is this: with Congressional action, U.S. EPA decisions and state legislative action hanging in the balance, it is more important now than ever for the biomass industry to band together. We must articulate all that we do for the country, on the national, state and local level.&nbsp;
 Thank you to all who provided their support to the BCAP cause. We are increasingly earning national recognition as a solid and dependable source of clean energy. Author: Bob Cleaves President and CEO, Biomass Power Association <a href="http://www.USABiomass.org">www.USABiomass.org</a>

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Cutting BCAP Funding: Penny-Wise and Pound-Foolish

Wood and pellet stoves are the only residential renewable energy system at scale in America today. According to the U.S. EPA, there are more than 10 million stoves in the U.S. compared to only about 300,000 residential solar photovoltaic (PV) systems. But one of the largest benefits of the wood and pellet stove is ignored: A $2,500 wood or pellet stove can reduce as much fossil fuel usage in the winter months as a $25,000 solar PV system does in a year.&nbsp;
 To leverage the enormous renewable energy production from wood stoves, we have to tackle emissions of older stoves and those produced today. In an average year, about 250,000 wood and pellet stoves are installed in America. Could we double that number and reduce emissions at the same time? Yes, but only if state and federal governments lower emission standards and incentivize the cleanest appliances.&nbsp;
 According to the U.S. Census, about 2 percent of Americans primarily heat their homes with wood or pellets. Another 3 to 5 percent use wood as a secondary source of heat. We estimate that wood and pellet stoves avoid 17.7 million tons of carbon from fossil fuel per year, equivalent to carbon emitted from more than four coal-fired power plants.&nbsp;
 While their ability to reduce the use of fossil fuels is extraordinary, only 3 million to 4 million of the 10 million stoves in operation are EPA certified. To resuscitate wood stoves as a technology that government can embrace, we need to achieve three things: a national incentive program to change out older stoves, stricter EPA emission standards for new stoves, and strategies to focus on pellet appliances instead of wood stoves in urban and air-quality non-attainment areas.
 Using life-cycle emission analysis instead of point-of-combustion analysis, some wood and pellet stoves are getting close to fossil fuel emissions. While wood stoves emit almost all their particulates at point of combustion, fossil fuels emit vast quantities in their extraction, refining and transportation. Engineers are pushing the envelope and starting to produce both pellet and wood stoves that are under 0.5 grams an hour (g/hr). Most major companies produce multiple stoves in the 2.0&ndash;3.0 g/hr range. Currently, the EPA permits up to 7.5 g/hr, and exempts classes of stoves, allowing many stoves to be installed that are not clean enough.&nbsp;
 The EPA is developing New Source Performance Standards for wood and pellet stoves and early indications point to a recommendation of setting 4.5 g/hr for both wood and pellet stoves. While a 4.5 g/hr standard for wood stoves represents a modest advance, 4.5 g/hr for pellet stoves is too high. Today the average pellet stove produces about 2.0 g/hr. Some EPA officials believe the marketplace itself will drive down emission levels. There is little evidence to support this theory, however. The driving force for the development of stoves with lower emissions has been Washington state, which lowered its standard to 4.5 g/hr for wood stoves and 2.5 g/hr for pellets and catalytic stoves in 1995. The industry soon began building to that standard with little difficulty. The marketplace thus far has done little to nothing to drive down outdoor wood boiler emmisions, for example.&nbsp;
 The beauty of promoting the cleanest wood and pellet stoves is that they achieve many of the same goals of solar and geothermal programs and help Americans affordably meet energy needs. Wood and pellet stoves drive job creation because the cleanest wood and pellet stoves today are made in America. We can keep those jobs and that fossil fuel reduction potential by investing in this sector. The pellet stove and wood pellet were invented in America, but we are on the verge of losing any advantage to Europe and China.&nbsp;
 While European governments have invested in research and development and incentives for clean pellet stoves and boilers, the U.S. government has focused on promoting biofuels and to a lesser extent, on biomass for electricity. If we develop strict emission standards for residential pellet stoves and boilers and provide common sense incentives, this technology holds promise for our economy and domestic energy needs.
 The U.S. relationship to wood stoves is different than Europe&rsquo;s because we have a huge low-income population that relies on wood heat. If we want Americans to keep using renewable energy, we need to invest in next-generation wood heat technology with lower emission profiles. Authors: John Ackerly President, Alliance for Green Heat and Board Member, BTEC (202) 596-3974 <a href="http://www.biomassthermal.org">www.biomassthermal.org </a>

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The Wood Stove Excels at Reducing Fossil  Fuels—But Can it Get Clean Enough?

The biomass industry knows all too well that transportation costs often stymie a project. Distributed or even portable energy and fuels production may be one method for diminishing the economic impacts of transportation costs in biomass utilization.
 To test this idea, the University of North Dakota Energy &amp; Environmental Research Center is building a mobile system for converting cellulosic waste into liquid products. The work is being funded through the Xcel Energy Renewable Development Fund and the U.S. DOE through the EERC Centers for Renewable Energy and Biomass Utilization. The system is currently under construction. Parametric testing will be performed with the system during the summer and fall.
 In the EERC program, the technology will be demonstrated by building and testing a 200 pound per hour fixed-bed downdraft biomass gasifier, air-blown and with specialized gas cleaning to produce the syngas. The system will be integrated with approximately 3-meter-long packed-bed catalytic reactors for producing the liquid fuels and highly automated to minimize labor requirements. A design review has already confirmed the fixed-bed biomass gasifier selection as the lowest capital cost system for indirectly producing methanol. The methanol produced will then be tested by IdaTech LLC of Bend, Ore., to determine if it is of sufficient purity to power a fuel cell used to produce heat and electric power.
 A strong advantage of the EERC gasification system is that it can be used with green or wet wood. This reduces the need for drying the wood before gasification, resulting in substantial energy and processing savings. In fact, the high moisture content creates syngas with a significantly higher hydrogen content than if the moisture were not present. High hydrogen content is especially useful when making a liquid fuel from the gas stream since the hydrogen-to-carbon ratio in a liquid fuel is much greater than that of the wood itself. By increasing the hydrogen content in the gas stream, higher carbon conversion efficiencies can be reached.
 By producing a liquid fuel for electricity generation elsewhere, overall biomass-to-electric power conversion efficiency is reduced relative to firing the syngas directly in a generator. However, by making a liquid fuel, the site at which the power is required can be decoupled from the site of the biomass resource. In this project, the biomass resource targeted is wet legacy piles of wood waste found at sawmills throughout Minnesota. These piles, often produced years ago, still contain a significant energy content but have degraded to the point at which they cannot easily be used as commercial products such as garden mulch. Rather than incinerating them, the EERC technology would turn the waste piles into a revenue stream through the production and sale of a carbon-neutral liquid fuel.
 Although the gasification design is new and unique, the EERC will be using commercially available technologies for gas compression and conversion. Initial laboratory testing of some of the subsystems shows that it may be possible to significantly improve the productivity of the system by using more experimental methods such as gas separation membranes or by modifying commercially available equipment to make it more useful in remote settings. These modifications will be the subject of a future article. Author: John P. Hurley Senior Research Advisor, Energy &amp; Environmental Research Center (701) 777-5159

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A Mobile Indirect Biomass  Liquefaction System

The regulatory climate for renewable energy project development is unpredictable. The federal government is promulgating new rules and regulations and officially &ldquo;reconsidering&rdquo; them at the same time, defending in court EPA&rsquo;s greenhouse gas (GHG) permitting rules, and trying to thwart public nuisance actions against GHG emitters. Meanwhile, most states are working to implement the new GHG permitting requirements at the same time that bipartisan legislative efforts are attempting to moot EPA&rsquo;s GHG rulemakings outright. And it&rsquo;s not just agency rulemaking and legislative action creating this uncertainty. Public backlash to the siting, development and operation of various renewable energy projects&mdash;from wind farms to biomass energy generating projects&mdash;threatens to derail hundreds of proposed projects.&nbsp; So renewable energy developers need to make smart business decisions in this climate.
 The best advice for renewable energy developers is to build the project&rsquo;s professional team early, create a regulatory strategy and timeline for implementation, and execute. Building a team of professionals requires a project developer to identify the technical, legal and political experts in the relevant field and jurisdiction. Each team member should have demonstrated success in executing similar projects and a can-do approach to project execution. The team must be integrated and, without sounding like too much of a sales pitch, a project&rsquo;s legal experts will likely be involved in every element of the project.
 Technical expertise must come in the form of knowledgeable and effective facility designers and engineers. These experts must not only design facilities in compliance with all relevant technical standards, but they must have a deep understanding of the proposed site, design elements and potential concerns of the reviewing agency. Even if a technically compliant design meets all necessary standards, its project proponents must be able to effectively communicate, justify design decisions and address agency concerns to keep the project moving. Competent technical professionals must also be able to work closely with legal experts to identify and execute all necessary construction and operation permits.&nbsp;
 The permitting element is complex for biomass projects right now, as federal and state agencies and legislatures continue to spar over applicability of certain air emission limitations and pollution control and permitting requirements. Although the biomass industry recently scored a three-year reprieve from EPA&rsquo;s GHG permitting requirements, that does not provide the industry with any long-term certainty and it does not provide relief from other EPA and state-agency rulemaking or the seemingly constant federal and state litigation surrounding these issues.
 A project can be slowed or stopped if opponents can effectively inject alternate &ldquo;expert&rdquo; opinions and evaluations into an agency&rsquo;s internal review process or during the public comment period. Even after a project has been reviewed and vetted by every level of federal or state regulators and all permits have been issued, developers must be aware of the potential for legal challenges. If the agencies issuing permits have done their jobs effectively, any such challenge should be handily defeated in the early stages of administrative or judicial review. However, the project&rsquo;s legal experts must keep a close eye on the agency&rsquo;s actions and the public record to ensure that any permit issued&mdash;and the procedure leading up to issuance&mdash;is legally defensible. Accurate front-end technical evaluations and sound legal support, including the ability to develop trust and negotiate with regulators, can keep a project moving.
 Finally, although the regulatory climate is uncertain, economic conditions are such that if a project has the potential to create jobs or boost the local tax base, local political leaders can become effective advocates. A competent political expert can help identify opportunities and open lines of communication with state and local leaders to develop incentive packages. Again, a project&rsquo;s legal expert should be involved here too to identify potential business and tax implications of incentive packages.&nbsp;
 Although the regulatory climate is extremely uncertain and does not appear to be changing anytime soon, renewable energy projects can succeed, if the right team is involved. Author: Anna J. Wildeman Member, Michael Best &amp; Friedrich LLP&rsquo;s Land and Resources Practice Group and Energy and Sustainability Industry Group (608) 283-0109 <a href="mailto:ajwildeman@michaelbest.com">ajwildeman@michaelbest.com</a>

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Continuing Regulatory Uncertainty  Need Not be a Showstopper

Energy and infrastructure attorney joins Ballard Spahr Roger D. Stark, a lawyer known for his work in U.S. and cross-border energy sector project development and finance, has joined Ballard Spahr as a partner. As a member of Ballard Spahr&rsquo;s Energy and Project Finance Group, he will handle energy-related project development and financing transactions, mergers and acquisitions, public-private partnerships, and infrastructure development matters. Stark has advised on the structuring and financing of traditional, renewable and clean technology energy projects, including lease-purchase financings and structured energy receivables financings, several of which were firsts in the industry. He has advised numerous investors and sponsors in the renewable energy industry, including acting as program counsel to the U.S. DOE loan guarantee program. He also advises on cross-border matters, particularly in Latin America, and has energy regulatory and litigation experience, including representing clients before the Federal Energy Regulatory Commission and state utility commissions. Stark was previously a partner with Curtis, Mallet-Prevost, Colt &amp; Mosle LLP in Washington, D.C. Patton Boggs boosts energy group with new hires Patton Boggs LLP has expanded its energy regulatory and enforcement practice with the addition of Cynthia A. Marlette, former general counsel of the Federal Energy Regulatory Commission, and G. Scott Binnings, formerly a member of the energy group at Latham &amp; Watkins. Marlette will focus on electricity and gas matters. Her 30 years of experience in regulatory and policy issues will greatly benefit her clients. Marlette served six years as FERC&rsquo;s general counsel, including service under three different chairmen&mdash;Pat Wood, Joseph Kelliher and Jon Wellinghoff. As general counsel, she was responsible for providing legal and policy advice in all areas under the agency&rsquo;s jurisdiction. Binnings focuses his practice on energy regulatory and commercial matters, with a concentration on the production and delivery of electric energy and related products from renewable energy resources. He has been involved in representations before FERC, the U.S. DOE and state public utility commissions on behalf of electric utilities, independent power producers, project developers, energy traders, financial institutions and manufacturers of renewable, energy efficiency and smart grid technologies. CPM Roskamp Champion names industrial sales manager Scott Switzer has been named industrial sales manager for CPM Roskamp Champion. His responsibilities include sales and marketing of Roskamp Champion products and services to industrial markets. Switzer has more than 20 years of experience in the process equipment and size reduction industries. For many of those years, he was with Hosokawa Micron Powder Systems, Summit, N.J., where he worked in engineering, applications, sales, and sales and marketing management. He also worked in business development for Fluid Energy Process Equipment, Telford, Pa. He holds a mechanical engineering degree from Rutgers University and an MBA in technical management from Fairleigh Dickenson University. Fecon introduces the FTX600 Fecon Inc. has introduced the FTX600 tractor, which brings a combination of cutting performance, track power, ground pressure and serviceability in the 600 horsepower class of mulching machines. Equipped with a 600 horsepower Cummins QSX15 engine, the FTX600 delivers 210 gallons of hydraulic flow to the variable-speed mulching head and solid power to the hydrostatic all-steel oscillating undercarriage. Fitted with either the Fecon BH300 or BH350 Bull Hog, the FTX600 can achieve 98-inch cutting height and 32-inch below grade, giving the operator unparalleled range of motion. Fecon&rsquo;s Power Management system optimizes torque and rotor speed, allowing the FTX600 to tackle tough material, rough terrain and demanding schedules. With 5.9 pounds per square inch ground pressure, this tractor offers less ground disturbance and a lighter footprint than most in the 600 horsepower class. The FTX600 is ideal for a wide range of applications including pipeline and power line right-of-way clearing, large-scale vegetation management and site preparation. Baisch Engineering hires business development, marketing manager Baisch Engineering has hired Christina FitzGerald as business development and marketing manager. She has 13 years of marketing experience in the architectural, engineering and construction industry. Prior to joining Baisch Engineering, FitzGerald was the marketing manager at an engineering firm in Boston. FitzGerald is a certified professional services marketer with a bachelor&rsquo;s degree in journalism and public relations from Northeastern University. A member of the Society for Marketing Professional Services, an organization dedicated to creating business opportunities in the architectural, engineering and construction industry, FitzGerald served on SMPS Boston&rsquo;s board of directors for five years. Bandit Industries adds Flagler to its dealer network Bandit Industries welcomes Florida-based Flagler Construction Equipment as the company&rsquo;s newest authorized dealer in the Southeast. Serving the Florida market since 1987, Flagler Construction Equipment will offer Bandit equipment, parts and service through five main branches covering the entire state, including Jacksonville in the northeast, Orlando in central Florida, Tampa in west central Florida, Ft. Myers in the southwest, and Davie on the southeast coast. In addition to these branches, Flagler also maintains an export parts facility in Miami. Flagler will feature a full line of Bandit equipment for sale through its dealer network. Information for their branches as well as other information on Flagler can be found at www.flaglerce.com, or through the dealer link at www.banditchippers.com. ACORE&rsquo;s Eckhart steps down The American Council On Renewable Energy&rsquo;s founding President Michael Eckhart retired Feb. 28 and joined Citigroup in New York as managing director and head of environmental markets and sustainability. Eckhart co-founded ACORE in 2001 with a commitment of an hour a day of his time, but quickly forged the Washington, D.C.-based 501(c)(3) nonprofit organization with collaborators who pledged to create a group that is &ldquo;for renewable energy and against nothing,&rdquo; dedicated to &ldquo;bringing renewable energy into the mainstream&rdquo; and willing to &ldquo;assume lead responsibility for the success of renewable energy in America.&rdquo; ACORE has grown in less than 10 years from an idea to a $4 million a year operation with 650 organizational members, 42 members of the board of directors and advisory board, and 25 staff and interns. Parker Fluid Control introduces new flow meter line Parker Fluid Control Division, manufacturers of the Skinner and Gold Ring lines of solenoid valves and the Sinclair Collins line of process control valves, introduces a new line of Vortex Shedding Flow Meters as part of its expanding product portfolio. These inline flow meters are ideal solutions for applications utilizing water, water/glycol coolant and other low-viscosity fluids. They monitor the flow of cooling fluid for resistance welders, slurry pump seal water, machine coolant and steam boiler feed water. Additionally, Parker Flow Meters can be used for cooling water to furnace walls and inductors in steel mills; cooling boiler feed pumps and turbine bearing cooling in power generation plants; as well as for rubber, mining, municipal wastewater treatment, and water addition in chemical and process applications. Asahi/America expands regulating products offerings Asahi/America is now stocking PolyPure natural polypropylene Frank Series pressure regulators and back pressure regulators in sizes ranging from one-half to 2 inches for its PolyPure piping system. Frank Series regulating products are engineered to meet tough demands. Mechanical parts are isolated from the system media by a diaphragm. Regulators are adjustable under working conditions and provide accurate and stable control over pressure, regardless of fluctuations or change in system demand. Pressure control is achieved throughout the world using Frank Series regulators. Installed in municipal, wastewater and processing facilities, Frank Series regulating products include pressure regulators, back pressure regulators, pressure relief valves and manual flow meters. Hancock joins Ascendant Partners Ascendant Partners Inc. has announced Jake Hancock has joined the Ascendant team as a junior business analyst in its Denver office. Hancock will play a key role in supporting Ascendant&rsquo;s growing consulting and investment banking practice. Hancock comes to Ascendant after working for Berkshire Advisor Resource in Denver and passing the three exams in the chartered financial analyst program. In addition to his financial background, he earned his bachelor&rsquo;s degree from the University of Texas.

Roger D. Stark has experience advising investors and sponsors in the renewable energy industry, including those involved in cross-border matters. 

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Scott Switzer will use his 20 years of experience in the process equipment and size reduction industries in his new position as sales manager.

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TACKLING TOUGH TERRAIN: Fecon's FTX600 with its light footprint can be used for a wide range of applications. 

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Michael Eckhart, who co-founded ACORE in 2001 and helped it grow into a 650-member organization, has retired and is joining Citigroup.


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Jake Hancock will use his experience to support Ascendant's consulting and investment banking practice.


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Business Briefs

Whether you&rsquo;re a biomass fuel producer, potential user or a regional farmer, the University of New Brunswick&rsquo;s Canadian BioEnergy Centre is equipped to assist you.
 Though operating since last year, the CBEC officially opened at the end of February. Director Michael Albright says the growing bioenergy sector has kept the center busy, and that new equipment in the lab allows the CBEC the ability to take on a considerable range of projects. &ldquo;On the material characterization side, these capabilities include evaluating feedstocks coming into a potential pellet mill or bioenergy mill&mdash;the fiber qualities, the energy and ash content&nbsp; and any contaminants in the fuel that might affect the performance in a burning appliance&mdash;as well as things that might clinker or build up slag in the stove,&rdquo; he says. &ldquo;We also have a new device that can measure the ash fusion temperature.&rdquo;
 A new lab-scale pelletizer, hammer mill and chipper will allow the CBEC to go on to the next step of biomass material evaluation, according to Albright. That is determining the fiber&rsquo;s ability to be made into energy products, whether it is for chips to be burned directly at a biomass plant or to be further ground up for pellets. &ldquo;We can determine how well the material will pelletize and stay together in pellet form, and then test the pellet afterward for its durability,&rdquo; Albright says. &ldquo;We can tell a producer that we&rsquo;re not getting a very durable pellet, so they can go back and change the pellet die or the process so that they&rsquo;re forming a better pellet.&rdquo;
 On the appliance testing side, the CBEC has some base appliances for testing fuels, and can actually measure particulate and gas emissions from a fuel. &ldquo;This can address any health concerns, of the appliance putting out too many emissions,&rdquo; Albright says. &ldquo;By being able to measure them, we can recommend modifications to the manufacturer to bring it into compliance with industry standards.&rdquo;&nbsp;
 CBEC&rsquo;s work isn&rsquo;t limited to wood or to pellets. The center is also working on ag pellets and briquettes, according to Albright. He says the next big initiative will be to facilitate a community district heating project, which would start with finding a facility such as a school that needs a boiler upgrade or heating system replacement, and a small community nearby that could be part of a closed-loop heating system. &ldquo;We might have a woodworking shop or saw mill or group of farmers who have underutilized lands or residuals left, and we&rsquo;ll figure out how we can combine those together to make a renewable community,&rdquo; Albright says. &ldquo;It could be pellet producers, farmers or wood manufacturing individuals, and we have a number of small, rural communities that would fit well with this scenario. We&rsquo;ll measure and quantify all of the social and economic impacts and benefits that come from it, and put that out there as a report and model for other communities.&rdquo;
 The CBEC hopes to have the project agreed upon and ready to move forward within the next year, he adds.
 &mdash;Anna Austin

BENEFITTING BIOENERGY: The Canadian BioEnergy Centre will be an important resource for developers of renewable energy technology and projects in Canada. 

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Canada's biomass fuel industry will benefit from new testing center.

Testing Grounds

When the proposed Maximum Achievable Control Technology rules were released last April, a flurry of worry and borderline disgust engulfed the biomass power industryâ€•concerned that it would soon be spending millions of dollars to install emission controls for hazardous air pollutants in existing units. It seemed the U.S. EPA&rsquo;s proposals would mean that, or shutting down. Similarly, some developers feared they would have to scrap their plans, as the proposal made them uneconomical and burdensome.
 The nearly 5,000 comments submitted to the EPA during the public comment period pointed out what some believed to be flaw after flaw in the proposal. Biomass industry proponents worked to convince the agency that the rules were duds and did not reflect the realistic environment surrounding the biomass power industry, among others. Overwhelmed with the number of comments containing vital information, the EPA asked the U.S. District Court for the District of Columbia to grant it an extension of either six or 15 months past its Jan. 16 final rule deadline, to allow more time to review the comments and incorporate any needed changes. The latter was the preferred option, as it would accommodate a complete reproposal of the rules, along with another comment period. After a short, five-day extension for the court to mull over the request, it was denied and instead the EPA was granted only one month to craft the final rule, which it promised would differ significantly from the proposal.
 So with the biomass power industry on the edge of its seat anxiously awaiting a rule that could potentially devastate development, the EPA released its final rules on Feb. 23, cautioning up front that they were completely rewritten and compliance would cost about $1.8 billion less than projections for the proposed rules, a reduction of about half.
 &ldquo;We received more than 4,800 comments that shed new light on a number of key issues,&rdquo; says Gina McCarthy, assistant administrator for EPA's Office of Air and Radiation. &ldquo;Based on this feedback, EPA revised the draft standards and found we could reduce emissions at a lower cost and still achieve the health benefits required under the law.&rdquo; The rules are realistic, achievable and reasonable, she adds. The EPA expected it would not be granted its extension, McCarthy discloses, and thus began overhauling the rule immediately, shifting away from simply massaging the original proposal to rewriting it completely. &ldquo;So while we would have preferred to have done it in a different process, we&rsquo;re pretty comfortable with the rule that&rsquo;s gone out,&rdquo; she says. &ldquo;We think it&rsquo;s well-thought-out.&rdquo;
 Boiler Breakdown
 The actions released Feb. 23 encompass standards for four source categories&mdash;major source industrial, commercial and institutional boilers and process heaters; area source industrial, commercial and institutional boilers; commercial and industrial solid waste incinerators (CISWI); and sewage sludge incinerators&mdash;as well as an updated definition of solid waste, crucial in determining which rules a technology will fall under.
 The biggest change to the final rules that will save the most money in comparison with the proposal comes in the section dedicated to boilers at major source polluter locations. Major sources are categorized by the release of more than 10 tons per year of any single air toxic or 25 tons per year of any combination of air toxics. Based on the data received in comments, the major source rule&mdash;divided into 15 subcategories of units burning natural gas, biomass, coal and other fuels&mdash;combines coal and biomass boilers into one solid fuel category. That closes the loophole for other solid fuel that may be burned, such as tires, and provides biomass boilers more flexibility. &ldquo;As a result, the standards make it clear that many existing large biomass boilers no longer have to install scrubbers to control acid gases or lower mercury, because the data tells us that most of them don&rsquo;t emit those pollutants to any great extent,&rdquo; McCarthy says. The major source rule establishes emission standards for mercury (Hg), carbon monoxide (CO), dioxin/furans, hydrogen chloride (HCl), and particulate matter (PM).
 The rolling together of the two categories means higher and more easily achieved emission limits for PM, HCl and Hg in all existing biomass units. It also results in higher emission limits for three existing subcategories of biomass boilers for dioxin/furans. For CO, however, emission limits were decreased in two subcategories of existing units. And for new biomass units, emission standards for mercury and dioxin/furans were increased in all subcategories, but PM and HCl standards were decreased. CO standards were increased for two biomass subcategories and decreased for two.
 &ldquo;By combining the coal and the biomass boiler categories for those three pollutants (PM, HCl and Hg), it has resulted in higher emission limits for the [existing] biomass units that will likely lead to them not having to install very expensive pollution control equipment that the original proposal would have required,&rdquo; says Deanna Duram, managing consultant with Trinity Consultants, headquartered in Dallas. But while the improvements for existing biomass units are a positive, the decreased standards for PM and HCl in new units will be challenging, she adds.
 Another important change also comes in the boiler categories. &ldquo;We learned during the comment period that both new and existing small boilers are designed in a way that does not accommodate monitoring for specific pollutants,&rdquo; McCarthy says. &ldquo;That&rsquo;s true whether you&rsquo;re a major or area source.&rdquo;
 In light of that realization, the EPA created a subcategory for small boilers&mdash;classified by a heat input capacity of less than 10 million Btu per hour&mdash;requiring only tune-ups every two years, in lieu of compliance with numeric emission standards. Limited-use boilers are also only required to conduct the tune-ups as well as all existing area source biomass boilers, and new area source biomass boilers with heat input capacity of 10 MMBtu per hour or greater are only required to meet PM limits. &ldquo;It makes sense because these units are not a big piece of the pie in terms of toxic emissions and if we get them tuned up, they run more efficiently, more cleanly; they save money for the facilities and they keep emissions as low as they can get,&rdquo; McCarthy says.
 Existing units falling under the boiler and process heater categories must comply with the rules by 2014, and new ones must comply upon start-up.
 Incinerator Issues
 Both CISWI and sewage sludge incinerator rules control the five pollutants addressed in the boiler rules, as well as lead, cadmium, sulfur dioxide and nitrogen oxides. A major point of contention with the proposed rules in the biomass industry was the definition of solid waste, key to determining which rules a technology will fall under and subsequently how much money it will cost to comply. The deadline for compliance with CISWI rules is three years after the EPA approves a state plan to implement the standards, or 2016, whichever is earlier.
 Generally, to classify as a fuel instead of solid waste, a material must not be discarded initially; must remain in control of the generator; must be managed as a valuable commodity; have meaningful heating value and be burned in units that recover energy; and contain contaminants that are comparable to or lower than that of traditional fuel products. A petition process is also included for material that does not remain in control of the generator but has not been discarded and meets the legitimacy criteria above.
 Perhaps one of the most meaningful changes in the final definition for the biomass industry is the classification of resinated wood residuals as a nonsolid waste whether combusted in or out of the generator&rsquo;s control, provided it meets the legitimacy criteria. That means forest products companies selling their board trim, panel trim, sander dust and other materials can consider them fuel. &ldquo;The benefit in this change is basically the rule as proposed said once it goes off-site, it&rsquo;s a solid waste,&rdquo; Duram explains, adding that the material has always been considered a valuable fuel in the forest products industry. &ldquo;They still have to meet legitimacy criteria, but this was, for a lot of my clients, a very important change in the final rule.&rdquo;
 As in the proposed rule, materials such as forest residuals, ag biomass and other clean cellulosic resources still qualify as fuels, but are now given the title of &ldquo;alternative&rdquo; traditional fuels. Had the biomass materials not qualified as fuels and instead solid waste, the operations burning them would be subject to stricter emission limits. As they are, the limits will require emission reductions at 85 of the 88 currently operating CISWI, according to the EPA. The rule requires stack testing, monitoring, and additional monitoring for new sources. Annual inspections of emission control devices are also required, as well as annual visible emissions tests of ash handling operations, and owners and operators must follow certain procedures for test data submittal.
 The sewage sludge incinerator rule includes multiple hearth and fluidized bed technologies and may require control device installations at about 196 of the 218 existing units, according to the EPA. The rules require provisions for testing, monitoring, recordkeeping, reporting and operator training. They were not included in the April 2010 MACT draft.
 For more information on the rules, visit www.epa.gov/airquality/combustion.
 Moving Forward
 As a result of the significant changes in the final rules, the EPA announced a 60-day reconsideration period for certain aspects of the boiler and process heater portions, as well as for CISWI. The process will essentially replace the public comment period that would have been allowed with a 15-month extension.
 Under the Clean Air Act, the EPA is obligated to regulate hazardous air pollutants from these sources and initially finalized a rule in 2004. It was vacated by the court in 2007, however, on the grounds that it did not properly distinguish &ldquo;industrial boilers&rdquo; from &ldquo;solid waste incinerators,&rdquo; which must be regulated separately, as per the CAA. The relevant definition of solid waste is not in the CAA, but rather the Resource Conservation and Recovery Act. The EPA, however, was tasked to determine which nonhazardous secondary materials are, and are not, solid waste as it relates to the CAA and MACT rules. &nbsp;&nbsp;&nbsp;
 The EPA fully expects petitions during the reconsideration period, McCarthy says, and promises to assess them fully, making further changes to the rules if necessary. &ldquo;The rules we finalized [Feb. 23] are based on best scientific data,&rdquo; she says. &ldquo;They will lead to significant achievable reduction. They&rsquo;ll promote tremendous public health benefits, and as we move forward with the next steps in the reconsideration process, we&rsquo;ll make sure that these standards remain practical to implement and that American families can see the health benefits as soon as possible.&rdquo;
 McCarthy also promised that the EPA will work with the U.S. departments of agriculture and energy to make compliance as easy and as inexpensive as possible for effected operations. The rules do, she adds, encourage the use of cleaner technologies by the dirtiest polluters: coal-fired boilers. &ldquo;I think the final rule does provide some good incentives for coal to look at cofiring with biomass as part of a less-expensive compliance strategy.&rdquo;
 Bob Cleaves, president and CEO of the Biomass Power Association, acknowledges the final rule is a large improvement, especially in the elimination of numeric emission standards for certain small biomass boilers, but doesn&rsquo;t include the sweeping changes the BPA had hoped for. &ldquo;Despite the best efforts by the administration and EPA, what we are left with is a rule that, in spirit, is a very positive development,&rdquo; he says. &ldquo;I think a number of important changes were made, but I think it remains problematic.&rdquo; The solid waste definition continues to worry the biomass power industry, as it can still include materials such as urban wood waste in California. &ldquo;We are not incinerators,&rdquo; Cleaves emphasizes. During the reconsideration process, the BPA plans to petition for a facility-by-facility basis for the rule, rather than the current pollutant-by-pollutant structure.
 While the new solid fuel subcategory of the major source rule increases some pollutant limits, the biomass power industry is still concerned about meeting the limits for mercury and dioxins, Cleaves says. He adds, though, that the subcategory does ease concerns considerably, and McCarthy agrees. &ldquo;The move to solid fuel category really provided flexibility for some of the biomass units and I think it was appropriate because it allowed them to target their controls to the actual emissions that they most contribute,&rdquo; she says.
 Although Cleaves still has some complaints about the final rules, he is appreciative of the fact that the EPA attempted to better understand the biomass power industry and how those rules would affect it. &ldquo;There&rsquo;s no question that the EPA had a substantial learning curve in the past 12 months,&rdquo; he says. Author: Lisa Gibson Associate Editor, Biomass Power &amp; Thermal &nbsp;(701) 738-4952 <a href="mailto:lgibson@bbiinternational.com">lgibson@bbiinternational.com</a>

The U.S. EPA has released an overhauled final version of the Maximum Achievable Control Technology rules, and the biggest changes will affect biomass boilers. 

MACT Madness

Wood pellet exports from the U.S. and Canada to Europe have doubled in the past two years, with 1.6 million tons of wood pellets shipped from the countries to the Netherlands, U.K. and Belgium in 2010, according to Wood Resources International LLC.
 The report points out that, while Canada has been the major overseas wood pellet provider to Europe for the past 10 years, reaching about 1 million tons in shipments in 2010, exports from the U.S. have taken off since they began in 2008, reaching 600,000 tons in 2010.
 The European Union&rsquo;s goal of reaching 20 percent renewable energy by 2020 can be attributed to the increased demand, as many countries have ramped up their consumption of woody biomass in the form of wood pellets and wood chips in the past few years to meet the renewable target, the report said. More than 11 million tons of wood pellets were consumed in the EU in 2010, up 7 percent from the previous year.
 The report also predicts that higher oil prices will benefit wood pellet exporters in North America, and that shipments to Europe can be expected to increase during 2011.
 &mdash;Anna Austin

North American wood pellet exports to the European Union have doubled. 

Export Enhancement

In the Northeast, using forest biomass for heat would be far more effective in replacing liquid fossil fuels than converting it to cellulosic ethanol for road transport, and it could replace as much as one-quarter of liquid fossil fuels currently&nbsp; being used for industrial and commercial heating in the region.
 That was one of many conclusions of a study released in mid-February by the Cary Institute of Ecosystem Studies, which teamed up with the Environmental Defense Fund and University of Vermont&rsquo;s Gund Institute for Ecological Economics to analyze the supply of wood in the Northeast and the impacts of intensive forest harvest to supply biomass energy.
 Charles Canham, lead author of the study &ldquo;Forest Biomass and Bioenergy: Opportunities and Constraints in the Northeastern United States,&rdquo; points out that it is widely assumed forest biomass is going to be an important part of the Northeast&rsquo;s renewable energy supply, and there&rsquo;s little debate that if it&rsquo;s done sustainably, using wood from its forests can have significant environmental and economic benefits. &ldquo;There&rsquo;s been an awful lot of speculation about how much energy our forests can produce, and that&rsquo;s what the report addresses; it assesses the potential of this form of renewable energy to replace fossil fuel consumption, in the eight Northeastern states,&rdquo; he says.
 Forests cover a little more than two-thirds of the Northeast landscape. &ldquo;That&rsquo;s a remarkable recovery from 100 years ago when forests had been cleared from much of our landscape, and surprisingly the current forest landscape is very close to optimal in terms of productivity and its ability to sequester carbon,&rdquo; says Canham, a forest ecologist and senior scientist at Cary Institute.
 What might come as a surprise is that the existing forest products industry already harvests most of the available net growth for traditional wood products. &ldquo;From our analysis, the bulk of additional biomass available for bioenergy will have to come primarily from waste from logging practices,&rdquo; Canham says. &ldquo;The total we can sustainably harvest for bioenergy is a lot lower than what studies have previously said, although I have to note those early studies were typically based on much more limited data than our analysis.&rdquo;
 The bottom line is that if all of the additional forest biomass that the researchers believe is sustainably available is channeled into the most efficient forms of biomass energy, it could make up from 1 to 2 percent of the region&rsquo;s energy consumption, Canham says. That number varies, however, if the biomass is targeted at specific energy sectors. &ldquo;Then it could represent a much more significant component of energy used,&rdquo; he says. &ldquo;For example, we estimate if you use all the additional biomass to make pellets used to make residential heat, you could replace 16 percent of the oil we currently use for heat. If all of it was used to generate electricity, it could represent around 5 percent of what we currently use.&rdquo;
 Canham says those numbers are small but significant. &ldquo;They are smaller than a lot of the hope and expectations out there, but they are still important numbers that would preserve working forests, create local jobs and develop regional renewable energy sources,&rdquo; he says. &ldquo;More to the point, they could represent a meaningful fraction of a renewable energy standard that most states have adopted or are considering. But this is where the caution has to come in&mdash;the benefits are lost if new regulations and incentives lead to unsustainable harvest rates.&rdquo;
 &mdash;Anna Austin

Total aboveground tree biomass (adult trees plus saplings), and live tree merchantable biomass (biomass above the stump and below a 10.2 centimeter top branch diameter) in the Northeast, are shown by state and for the region as a whole, and per unit 

2011/03/13007433492646.jpg

Researchers say using wood for heat is effective as long as it's harvested sustainably.

Wood Heat in the Northeast

With the lease of the Port of Beaumont in Texas, Zilkha Biomass Energy will join the growing list of American companies shipping wood pellets to feed Europe&rsquo;s booming biomass power market.
 The company is building an inventory of between 3,000 and 5,000 tons of its waterproof black pellets for the first shipment, expected to sail in April. The pellets will come from its plant in Crockett, Texas, which has a nameplate capacity of 40,000 tons, according to company CFO Glenn Dillon. &ldquo;Based on our current capacity, it&rsquo;s estimated we&rsquo;ll be shipping every other month,&rdquo; he says.
 It will be the first shipment from the U.S. of black pellets, he adds. Zilkha&rsquo;s waterproof black pellets have a high energy density, are abrasion resistant, and can be stored outside like coal, according to the company.
 Zilkha conducted a test shipment in October before signing the lease agreement, which extends through the end of this year. After that time, the company will assess its needs, Dillon says. The economics are more favorable in Europe than in North America, he says, as power pricing in Europe is higher. &ldquo;We are working strategically with some U.S. utilities. We don&rsquo;t have contracts with any yet. But we are focused toward the European power market.&rdquo; Zilkha&rsquo;s customers are in northern Europe, he says, declining to specify, but adding that they are all utilities.
 The Zilkha company name was established in 1984 with a strategy centered around oil and gas, but it switched its concentration to wind energy in 2000. Now, the company has updated its focus exclusively to biomass, mainly wood pellets from sawmill residues such as chips, sawdust and shavings, Dillon says.
 The company also has an idled plant in Alabama that is expected to resume operation by the end of this year. With the addition of the port to its assets, Dillon says Zilkha plans to increase production. &ldquo;We&rsquo;ll likely expand the Crockett plant to a higher capacity,&rdquo; he says.
&mdash;Lisa Gibson

PELLET POWER: Zilkha says its black pellets are waterproof, abrasion resistant and can be stored outdoors. 

2011/03/13007436763891.jpg

Zilkha Biomass Energy has leased a port in Texas that will allow shipment of its wood pellets to Europe.

Shipshape

A report jointly released by researchers at the Georgia Institute of Technology and Duke University says that the South could pay less for its electricity than what current forecasts predict in 20 years if it invests in more renewable energy.
 That is, with the right mix of public policies. If done right, the region could produce as much as 30 percent&mdash;up from less than 4 percent&mdash;of its electricity from renewable sources by 2030, the study finds.
 Titled &ldquo;Renewable Energy in the South&rdquo; the report&rsquo;s authors build on a policy brief released last summer and provide an in-depth assessment of the scope of renewable energy resources in the South and their economic impacts on electricity rates and utility bills in the region.
 Co-lead researcher, Marilyn Brown of GIT, says there are a few reasons for the potential lower electricity rates relative to the business-as-usual National Energy Modeling System forecast. First, the report assumes some incremental technology improvements for several renewable energy resources including combined heat and power, biomass and solar, which bring down costs, as well as implementation of a renewable energy standard. &ldquo;We also assume updated wind and hydro resources, which are more expansive than in the NEMS forecast,&rdquo; Brown says. &ldquo;That brings on a great deal of cost-effective wind and hydro.&rdquo;
 Third, the researchers introduce a great deal of combined heat and power and other end-use renewables that result in a significant reduction in electricity use relative to the NEMS forecast, which drives down rates. &ldquo;We also assume that investment tax credits are extended, which moves some costs from the ratepayer to the taxpayer,&rdquo; Brown says, adding that it is important to note that rates do rise in the report&rsquo;s renewable energy scenario, but just not as much.
&mdash;Anna Austin

Study says renewable energy in the South will pay off if it's done right.   

Return on Renewables

&nbsp;The demand for ethanol with a lower carbon footprint seems to be spurring a movement in which ethanol plants are using biomass to power their operations. The lower carbon score of the manufacturing process can make the ethanol product itself more attractive, according to Mike Jerke, general manager of Chippewa Valley Ethanol Co.
 The Benson, Minn.-based ethanol plant produces about 46 million gallons annually and, when the price of natural gas is high, powers itself with corncobs and wood chips. The company is also in the process of permitting the system for sunflower hull feedstock. &ldquo;If you can replace petroleum sources with something renewable, that gives you an end product that has more value in places like California, where they&rsquo;re concerned about the carbon index score of the fuel they&rsquo;re buying,&rdquo; Jerke says.
 In addition to favorable carbon scores, the biopower movement in the ethanol industry was pushed in 2005-&rsquo;06 by rising natural gas prices, Jerke explains. The gasification system CVEC employs creates a gas that can be handled similarly to natural gas. &ldquo;We refer to it as producer gas,&rdquo; he says. That producer gas is piped to the burner to heat water to produce steam that is distributed into the plant to run the process.
 And CVEC isn&rsquo;t the only one. Poet LLC has proposed systems that utilize biomass combined heat and power, and Archer Daniels Midland Co. is using biomass cogeneration in Nebraska and Iowa. It&rsquo;s cleaner than petroleum and is simply the &ldquo;right thing to do,&rdquo; Jerke says. In addition, the current rate structure curtails the amount of natural gas that can be used on high-demand days, such as those in the middle of brutal Minnesota winters. So using biomass alleviates the need to resort to more expensive gas such as liquefied petroleum. &ldquo;There are a number of benefits,&rdquo; Jerke says.
&mdash;Lisa Gibson

RUNNING ON BIOMASS: CVEC is one of several ethanol plants using biomass to reduce their carbon footprints and save on energy bills. 

2011/03/13007438730195.jpg

A growing number of U.S. ethanol plants are reaping the benefits of using biomass for power.

Biomass-Powered Ethanol Plants

Time, money and patience are perhaps the three most essential resources that a developer going through the permitting/approval process should have. Of course, each project is different and each state&rsquo;s requirements may vary. Some developers discover that the entire process is much more difficult, complicated and time-consuming than initially anticipated, leaving them frustrated, unprepared and set back, and in some cases, regretting their decision to move forward with a project. In other cases, developers find themselves sailing through the process without much of a hitch.
 The process is especially difficult if the developer is using innovative technology, as is the case with James Taylor, president and CEO of Taylor Biomass Energy LLC, which broke ground on a 20-megawatt biomass gasification plant in Montgomery, N.Y., in early December. Taylor says it took him five years to gain all of the necessary approvals and permits for the garbage-to-energy plant, more time than he ever imagined it would take. He started the process in 2006, and completed phase one approvals in 2010.
 Taylor, who also owns a recycling business with which the biomass plant will be co-located, describes his experience as &ldquo;an exhaustive, draining and sometimes duplicative process.&rdquo; Not to mention costly. The final permitting price tag ran him about $3 million.
 Taylor wishes that before embarking on the process he had better understood the changes in regulations that would occur over the years. &ldquo;I didn&rsquo;t truly understand how much government has grown, and how many new requirements exist,&rdquo; he says.
 Local approvals were the toughest to get, Taylor says. Though public opposition or NIMBYism (not in my backyard) sometimes plays a role in achieving local approval, he says it really wasn&rsquo;t the case in his situation. &ldquo;There was no real opposition,&rdquo; Taylor says. &ldquo;In fact, most public turnouts were strongly in favor of approval of the project. I truly believe it was elected officials who were afraid to be in support of a project that they thought would hurt them instead of the opposite.&rdquo;
 Mostly Sunshine in Florida
 On the flip side, Rick Jenson, CEO of Florida Biomass Energy LLC, says he had a few setbacks when getting his 60-megawatt waste wood/vegetative waste-fired plant permitted, but his overall experience was positive.
 Unlike Taylor Biomass, Florida Biomass Energy is using time-tested technology. Jensen says he has been working on the project, which is in Manatee County in southwestern Florida, for about two years and has all necessary permits in line. &ldquo;We were actually permitted within about a year, but unfortunately, Florida has a statute called the Administrative Producers Act, which allows any individual in the state of Florida to challenge any project,&rdquo; Jensen says. &ldquo;We had a nearby individual who decided to challenge the project&mdash;not based on any merits but based on personal gain&mdash;so that set us back a good nine months. His first challenge was in November 2009, and it wasn&rsquo;t resolved until October the next year, so it was about a 12-month slow-down, unfortunately.&rdquo;
 Luckily, the situation ended in the biomass company&rsquo;s favor. Jensen notes that it&rsquo;s important for a developer to expect and be prepared for setbacks such as the one he faced. &ldquo;It was resolved and we&rsquo;re moving forward, but that really was an anomaly,&rdquo; he says. &ldquo;Unfortunately, most developers do have something like that they run into.&rdquo;
 In his opinion, many problems developers face are often self-created. &ldquo;The truth is that when you go in for development, there are both federal and state regulations for permitting and what&rsquo;s allowed, and up until recently, developers have gone in trying to achieve the bare minimum in terms of standards. This creates challenges and difficulties along the way.&rdquo;
 Like Taylor, Jensen says all of the different level of approvals required can be challenging and confusing because there is a lot of overlap. &ldquo;It makes it a little more difficult in managing the process,&rdquo; he says. States are working to make improvements though, including Florida, he points out. &ldquo;The state has recently stepped up and is focused on combining some of the processes,&rdquo; he says.
&ldquo;For the APA, in which we were recently challenged&mdash;on multiple fronts including our zoning, our comprehensive land-use change, our air permit and on our power purchase agreement with the Public Service Commission&mdash; each was an individual action that we had to address and defend separately. They recently implemented some new statutes in Florida where all challenges will be combined into a single-hearing, a single-challenge review. It&rsquo;s an expedited action, and that will help tremendously in moving the process forward quickly.&rdquo;
 Getting Florida Biomass Energy permitted was an overall positive experience for the company, other than the project challenge, and Jensen attributes that to the attitude of the state of Florida. &ldquo;They are pro-business,&rdquo; he says. &ldquo;The staff and folks in Florida were very supportive, and overall we had a good experience from a permitting standpoint, and that&rsquo;s working with multiple agencies.&rdquo;
 With all permits in hand, Florida Biomass Energy is now nearly ready to break ground. &ldquo;We&rsquo;re keeping our fingers crossed that we&rsquo;ll be able to obtain financing soon,&rdquo; Jensen says. &ldquo;We went into full financing mode in the end of 2010, and we hope to obtain it and be able to break ground in the second quarter of 2011.&rdquo;
 If that happens, the company plans to take advantage of the federal 1603 Program. &ldquo;So far, we&rsquo;re moving in that direction, and that&rsquo;s our goal,&rdquo; he says.
 Permitting in the Beaver State
 While Oregon is a biomass-friendly state, it takes quite a bit of time to gain all of the necessary permits for a project; the key permits being air, water and zoning/land use, according to Robert Broberg, president of Biogreen Sustainable Energy Co. Biogreen is developing a 25-megawatt, wood-fired biomass power plant in the city of La Pine in central Oregon.
 Overall, it took the company about 20 months to acquire its permits at a cost of about $2 million. Broberg points out that this is the company&rsquo;s first plant, and as with any first run at something, costs usually run higher than second or third attempts. The company estimates the total project will cost between $68 million and $75 million.
 For the most part, Broberg says the process went pretty well. &ldquo;We engaged the public early and built a solid rapport with them, and this was key to moving the project through,&rdquo; he says. &ldquo;We also were fortunate to have very good consultants and attorneys working on the air, water and land-use critical path items.&rdquo;
 Development in Oregon hasn&rsquo;t been without its setbacks, however. &ldquo;One problem that arose was a LUBA (Land Use Board of Appeals) appeal, which had nothing to do with the actual citizens of La Pine,&rdquo; he says. &ldquo;It was a result of outside interests and agendas. Going through the land-use process was the most difficult part of the whole process.&rdquo;
 The La Pine city council rejected an appeal of the project in December. In Oregon, a LUBA appeal can be filed by a person, organization or corporation dissatisfied with the land-use decision or limited land-use decision made by the local government or special district. It is cheap to do, only costing a petitioner $400 to file the appeal, plus attorney costs if one is hired. &ldquo;I think the only thing that needs a hard look at [in Oregon&rsquo;s permitting process] is the issue of standing in a land-use appeal,&rdquo; Broberg says. &ldquo;Currently, anyone anywhere can appeal a land-use decision for any reason and it hardly costs them anything. These appeals should be reserved for citizens the project would actually affect. [The state] would see a lot more development if this issue was resolved.&rdquo;
 Fortunately for the developers who have positive outcomes, LUBA requires the losing party of an appeal to reimburse the winning party for certain costs incurred during the process.
 Now past that setback and having all necessary permits in hand, Biogreen plans to break ground as early as this spring.
 Words from the Wise
 On advice to other developers, Taylor recommends making sure a developer is ready to deal with what could be a lengthy and stressful process. &ldquo;Ask yourself, do you really want to do this?&rdquo;
 Broberg believes the most beneficial move a developer can make when going through the permitting process is to engage the help of experts. &ldquo;Hire good consultants and permitting specialists with a lot of experience,&rdquo; he says.
 Jensen warns developers not to skate under the minimum thresholds. &ldquo;Try to develop a project that truly is an asset to the community, not just a money-making entity for the developers and investors because the people you&rsquo;re working with at all levels&mdash;the community and the state, and those on local and federal levels&mdash;they&rsquo;ll see what you&rsquo;re doing, and they&rsquo;re smart people,&rdquo; he says.
 Jensen says if developers who did that took a different angle going into a project, it could streamline the permitting process. &ldquo;Our philosophy as a company is not to just go in green, but go in clean and green, so we went in as clean as possible. People were more willing to accept our project, and they were more willing to help us move our project forward because they saw us as trying to do something positive, rather than trying to skate by with the minimum standards.&rdquo;
 &nbsp;The reason that isn&rsquo;t always done is because of costs, Jensen says. &ldquo;It does cost more to be cleaner.&rdquo; Author: Anna Austin Associate Editor, Biomass Power &amp; Thermal (701) 738-4968 <a href="mailto:aaustin@bbiinternational.com">aaustin@bbiinternational.com</a>

FLOURISHING IN FORIDA: Florida Biomass Energy has been working on permitting for a 60-megawatt biomass power project in Manatee County, Fla., for about two years. The plant would use waste wood and vegetative waste.  

2011/03/13008040905392.jpg

CONSTRUCTION READY: Biogreen has all the necessary permits to build a 25-megawatt wood-fired biomass power plant in La Pine, Ore., and plans to break ground in the spring. 

2011/03/13008041589383.jpg

Every permitting experience is different. Biomass Power & Thermal talks to project developers about the challenges and successes of their permitting processes.

Pushing for Permits

In some locations, permitting is a nightmarish rigmarole that can drag on for years before a project is finally ready for construction and operation. Permitting requirements for biomass power and thermal operations can vary by size, location, technology type and other factors, depending on the country&mdash;and sometimes the area within the country&mdash;where they&rsquo;re being developed.
 Denmark has set itself apart from the rest of the world, however, with its efforts to simplify the permitting process for renewable energy operations, as it works toward its goal of 30 percent renewables by 2020. Especially when compared with the U.S., the country&rsquo;s biomass power and heat facility permitting processes are admirable and undoubtedly have made development easier, contributing to the fact that biomass accounts for about 70 percent of Danish renewable energy consumption. Utilization of biomass material for energy has more than quadrupled from 1980 to 2005, and is still growing.
 &ldquo;They&rsquo;ve done a lot in Denmark to make [permitting] easy,&rdquo; says Hans Christian Krarup, Danish country director for international consulting firm Golder Associates A/S. &ldquo;It would be difficult to find another country where it&rsquo;s easier.&rdquo;
 Perhaps the most important factor in the case of permitting is that developers don&rsquo;t have to distribute permitting applications and analyses to multiple agencies. Instead, it&rsquo;s all submitted at the local level to the municipality with jurisdiction over the chosen development site, which conducts a majority of the permit issuances. &ldquo;In Denmark, you have one-stop shopping with all the permits,&rdquo; Krarup says. &ldquo;You just make the application directly to the municipality and they&rsquo;ll forward it to the relevant parties.&rdquo;
Krarup contributed to a 2008 study of noncost barriers to renewable energy growth in the European Union that found stakeholders in renewable sectors appreciated the one-stop shopping aspect of permitting in Denmark, saying it simplified and streamlined the process, making it move more swiftly.
 US Complications
 Most states in the U.S. have a much more complicated and involved process, highlighting another factor that sets it apart from Denmark&rsquo;s: permitting requirements and processes vary significantly from state-to-state and often involve multiple agencies. While most large permits, such as air, must meet federal requirements, states are delegated to implement them and can enact more stringent requirements and thresholds than are dictated by federal laws.
 In Oregon, an energy facililty siting permit is required for biomass power plants producing more than 25 megawatts (MW), whereas in Washington the threshold for that permit is 350 MW. The permit in Oregon comes from the Energy Facility Siting Council and in Washington is issued by the Washington Energy Facility Site Evaluation Council, according to Golder Associates. Although the Oregon Energy Facility Siting Council issues the certificate, it does not analyze the technical aspects of the project, as the group is made up of appointed citizens. &ldquo;Being private citizens, they don&rsquo;t work on evaluating the project per se,&rdquo; says Chad Darby, Oregon-based senior consultant with Golder Associates. &ldquo;The state [Department of Energy] has project officers who evaluate project applications and make recommendations to the council for approval or denial of the siting certificate.&rdquo; In Oregon, the intent of the certificate is to look at everything the facility impacts, including air, water, noise, scenic views and other elements, numbering about 30 when all is said and done.
 Similarly, some states require a state environmental impact analysis or assessment. Again, the environmental impact permit requirements vary greatly from state to state and some projects can trigger state or federal environmental programs, such as Washington&rsquo;s State Environmental Policy Act, the California Environmental Quality Act or the National Environmental Protection Act. Without a state environmental act, Oregon, for instance, would not require such a permit or assessment, outside of the energy facility siting certification, Darby says.
 U.S. biopower company Adage has alleviated some of the headaches that come with developing in different states by using a reference design intended specifically to fall under certain permitting requirements in the states the company has considered for development. Adage's 55-megawatt model will run on forest residues and employ best achievable control technologies (BACT) to ensure more ease in the permitting process, according to spokesman Tom DePonty. The company has permitted two projects: one in Hamilton County, Fla., and another in Mason County, Wash.Florida permitting was made simpler because the site already had an Environmental Resource Permit, which comes from the State Department of Environmental Protection, DePonty explains. The permit needed minor amendments, though, because of differences between the biopower facility and the operation that was originally granted the permit but didn&rsquo;t develop there.
 The air permit for Florida was also granted by the Department of Environmental Protection, which does not require a BACT analysis, DePonty says. &ldquo;We meet the BACT Standards, but Florida doesn&rsquo;t require BACT analysis in their permit,&rdquo; he says.
 In Washington, Adage received preliminary approval for an air permit from the Olympic Region Clean Air Agency, and a land-use permit, regulated by SEPA. The latter includes an environmental assessment with 13 different areas of analysis including water quality, noise and traffic, DePonty says. At press time, Biomass Power &amp; Thermal learned that the Washington project was canceled because of poor market conditions.
 But the identical facility design will help Adage wade through the varying permitting requirements, making it simpler in comparison with companies developing different facilities in different states. &ldquo;I wouldn&rsquo;t disagree that it can be a complex process [in the U.S.],&rdquo; DePonty says.
 Static Standards
 In contrast, Denmark&rsquo;s permitting requirement framework for biomass power and heating plants is the same across the entire country and has been since the 1990s, when it began using biomass resources extensively, according to Finn Bertelsen, senior advisor for the Danish Energy Agency&rsquo;s Division of Energy Supply and Renewable Energy. Small changes have, of course, come into play, but the principle of the permitting process has remained static. &ldquo;In the 1990s, the Danish Energy Agency was informed of municipalities&rsquo; decisions and could evaluate,&rdquo; he says. &ldquo;But since about 2004, we don&rsquo;t do that anymore.&rdquo; The law on heat production controls district heating plants, while the law on electricity production controls those that generate electricity, he adds. Denmark is a constitutional monarchy divided into five regions and 98 municipalities, with governing bodies on the national, regional and municipal levels.
 Biomass power facilities 25 MW or larger in Denmark will need air and water permits that come from a regional environmental protection center, permission from the Danish Energy Agency to supply clean power to the grid, and in most cases, permission from the municipality to deliver district heat to its local network, according to Bertelsen. Any biomass power plant with an output below 25 MW is regulated entirely on the local level, including air and water permits, as are all small-scale district heating plants. District heating delivers more than 60 percent of the heating needs in Denmark, 40 percent from biomass. All power plants also provide district heat, Bertelsen adds.
 Power plants above 25 MW are also not required to submit an environmental and socio-economic impact analysis, although they do have to prove emission data, he says. &ldquo;Bigger electricity-producing plants are on the market, so it&rsquo;s a pure economic decision if you want to build that plant or not,&rdquo; he says. Small district heating facilities are also not required to submit an environmental study.
 Air and water permits for biomass facilities fall under an all-inclusive environmental permit required for all operations that pollute, whether renewable energy-related or as simple as an auto workshop, Krarup says. While Danish biomass plant water permits generally deal only with the quality of water discharged from the operations, U.S. water permits can relate to stormwater runoff and other issues, and the approving agencies also vary among states.
 In Tiers
 In keeping with the theme of complicated permitting requirements, the U.S. has a tiered, headache-inducing air permitting process that, to make matters even more confusing, is still being formulated. Emissions above a certain threshold trigger major source requirements, causing consternation with greenhouse gas emissions from biomass power plants. &ldquo;Once you get into that major source permitting category, there&rsquo;s a whole lot more you have to do in order to get your permit,&rdquo; Darby says.
The magnitude or type of facility can categorize it under New Source Performance Standards&mdash;applying to specific new, modified or reconstructed facilities in a number of industries&mdash;or the Maximum Achievable Control Technology rules, which splice permitting requirements even further between solid waste incinerators and boilers. &ldquo;Our system can be very confusing,&rdquo; Darby says. &ldquo;There are requirements coming from a wide variety of agencies.&rdquo; In Denmark, air permitting for biomass power is not so fractured and the only differentiating factor is the 25 MW threshold, Krarup says. &ldquo;There are standard parts of environmental law which are by now quite well-integrated for these effects,&rdquo; he adds.
 Of course, facilities in both countries need construction permits on the local level, which can also vary by location. In Denmark, larger plants and those that generate issues with transmission lines, noise or other factors for neighbors must go through a public hearing process, whereas in the U.S., the construction permitting process is almost always open to public input. Intricacies with building permits can encompass zoning and conditional-use factors, as well.
 &ldquo;The sense I get is that [Europe] has a much more holistic way of looking at pollution,&rdquo; Darby says. &ldquo;The European permitting process for industrial sources looks at whole life-cycle impacts, whereas we have a more fractured system where you&rsquo;ve got to go to one agency group to get a water permit &hellip; then you go to another agency group to get an air permit and so on.&rdquo;
 While it could be argued that differences in permitting between Denmark and the U.S. are the result of contrasts in country size and government structure, Krarup says it could also stem from the countries' industrial backgrounds. &ldquo;We are a small nation. We don&rsquo;t have many raw minerals so we have to use other resources. And there&rsquo;s no doubt Denmark is ahead in many areas of the renewable energy sector. It has benefited our industry that we have been open to [new technologies and options for clean energy].&rdquo; Author: Lisa Gibson Associate Editor, Biomass Power &amp; Thermal (701) 738-4952 <a href="mailto:lgibson@bbiinternational.com">lgibson@bbiinternational.com</a>

DENMARK's DEXTERITY: Permitting biomass power plants such as Plant Maarbjerg in Jutland, Denmark, a combined-heat-and-power facility, is much easier than in the U.S. as Denmark has an ambitious goal of 30 percent renewables by 2020. 

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Compared with the U.S., Denmark has a shockingly simple permitting process for biomass heat and power facilities, undoubtedly a factor in its immense biomass energy consumption.

Particularity in Permitting

Picture this. The chief executive officer of a large biomass corporation wants to pursue a new development. The economic difficulties haven&rsquo;t slowed his company so he decides to build a new plant near a small town in Massachusetts.
 The company&rsquo;s management team constructs the business plan, collects the proper paperwork and gets ready for the approval process. All of a sudden the zoning commission holds off on granting their permit. Why? Residents of the towns near the proposed site created an opposition group to fight the project. Despite the fact that the new plant would generate clean energy to power up several towns, increase the tax revenue and improve the local economy, the community doesn&rsquo;t seem to understand these benefits. The residents say the new facility would be too close to their homes and may be potentially hazardous to their health. They say it would create too much noise, pollution, and traffic, and would obstruct their views. This is when the chief executive officer realizes that opposition is indeed a roadblock that may halt or even destroy his project. So what does he do now?
 The problem that this company is faced with is not so uncommon. It is called the &ldquo;not in my backyard syndrome&rdquo; or NIMBYism. It consists of strong opposition by one person or a group of people to a new project or development in their community. NIMBYs, as they are commonly referred to, are likely to organize quickly to communicate their opposition to a local project in an effort to curb development. The origins of NIMBYism are somewhat vague. Some scholars believe the concept originated as early as the 1950s. However, the practice of communal opposition to development blossomed in the 1980s.
During that time, community concerns were reasonable and justified in most cases. First of all, the biomass industry was so new that people simply feared it as the unknown. In addition, with the technology available during that period, building a biomass plant in a neighborhood could mean noise, traffic, and pollution. While those days are gone, the sentiment of opposition remains, as does the stigma of a biomass development near one&rsquo;s home. With the use of modern technology and strict government regulations, the inconvenience caused by any sort of development is usually reduced to the minimum.
 The NIMBYs, however, always find a reason to oppose development. It seems that often they are simply &ldquo;in it to win it.&rdquo; They oppose just for the sake of making a statement. The size of the &ldquo;backyard&rdquo; has grown so vastly that nowadays NIMBYism affects companies all over the world. From New York to Tokyo, businesses in the biomass industry are looking for ways to win the NIMBY battle.
 Fight Misinformation 
 If your firm finds itself involved in a NIMBY fight, take the steps necessary to ensure the proper message is getting out to the public. Very often the opposition stems from misinformation and poor communication between project representatives and the community. In this case, it is better to play on the offensive. Instead of waiting for the opposition to grow, present the facts up front.
 It is necessary to look for local support and build allies in order to form a supporter coalition. First and foremost, identify and create a database of local residents who are in favor, against or undecided about the project. A good way to begin is by conducting a poll or establishing a phone bank, asking local residents about their view of the renewable energy industry in general, and about your development plan in particular. The results of the surveys may then be published to showcase the positive attitude in the community toward your venture.
 Once the database is created, it has to be maintained and updated frequently for the campaign management to be aware of any changes in the local opinion. One way to do this is through a targeted direct mail and/or advertising campaign. A strong social media campaign may also work as a modern tool to spread your message, reach out to the community and provide supporters with a communication outlet. Although many campaigns use modern technology to deliver a message, most grassroots campaigns mainly rely on direct face-to-face interaction between the developers and local communities.
 Reach Out to Supporters
 Now that you have distinguished supporters from opposition, the next step is to reach out to third-party groups that support your development. These could be anything from small businesses to a local decision maker. Those companies or groups with whom you have had a positive relationship or will benefit from your project should be encouraged to participate in the campaign.
 Residents should express their support through writing letters to their elected officials or newspapers. Those who are looking to support further can attend public hearings where they can speak about the benefits of your project. Most likely, an independent pro-group would have emerged by now and will actively participate in all aspects of the campaign.
 You may choose to fight NIMBY on your own. Experience shows, however, that hiring a specialized firm will provide you with the necessary tactics to ensure support for your development. More often than not, the public relations firm you are looking to employ may not be equipped with the necessary tools and experience to tackle the NIMBY issue. Public relations specialists may help you develop your brand, create your image, and give your company the publicity it needs. Those benefits may be useful in some instances, but experience in grassroots campaigns is necessary to properly assess your project and analyze your NIMBY issues. Your best bet is to consult a public affairs organization. Professionals, trained in grassroots, will make sure that the correct message from your company is being distributed to the community and the silent majority is heard. The way you approach the situation will make all the difference.
 When it came down to it the chief executive officer of that biomass corporation had a decision to make. He could choose to ignore the NIMBY fight, avoid communicating with the local community and take the situation to an unnecessary level of tension. Instead the company&rsquo;s management team hired a specialized firm that developed a strategy, engaged in conversation with the community and encouraged the proponents of the project to voice their support. Soon after the conflict was put to rest, the permit was granted and the company went on to build the plant. Author: Al Maiorino President, Public Strategy Group Inc. <a href="http://www.publicstrategygroup.com">www.publicstrategygroup.com</a> (617) 859-3006

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HEAD OFF NIMBYS: Project developers need to get out ahead of any potential opposition and present the facts about their project right away.

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What steps can you take when your biomass project faces opposition?


Do You Have Control Over NIMBYism?

The renewable energy sector in China is growing by leaps and bounds as the country strives to meet its goal of 15 percent renewable electricity by 2020. That poses opportunities for foreign investors, but all foreign investment in China, from a simple representative office to the creation of joint ventures, requires government approval, according to Ellen Eliasoph, managing partner with law firm Covington &amp; Burling LLP.
 Eliasoph was one of five speakers discussing renewable energy in China during Developments in China&rsquo;s Renewable Energy Markets, a March 1 webinar hosted by the American Council on Renewable Energy U.S.-China Program. &ldquo;Foreign investment in China is regulated in every respect,&rdquo; she says. &ldquo;Luckily, the clean energy sector is very much open to foreign investment.&rdquo; In fact, the country aims to strike a balance between supporting indigenous industry and encouraging foreign investment, she adds.
 All forms of foreign investment are allowed in some areas of manufacturing industries including biomass-drying pyrolysis systems and gasification devices, among many others; power production and supply including biomass power stations; and scientific research, technical services and geological exploration, again including biomass energy development technology. There are some categories, however, where foreign investment is limited to joint ventures, such as the manufacturing of complete or key equipment for generating electricity with new energy sources including biogas, among several others. Foreign investment in the production of biological liquid fuels is restricted in China, and is prohibited in certain coal applications and products, Eliasoph says.
 Despite those challenges and restrictions, the Chinese energy market is opening up, according to webinar speaker Gary Wigmore, partner with Milbank, Tweed, Hadley &amp; McCloy LLP. Some issues in the regulatory framework have plagued the markets, but many have been amended, and more changes are most likely on the way, he says, adding that the country&rsquo;s needs and targets have put it on the map with foreign investors. &ldquo;We expect China will continue to be a key player in the renewable energy business,&rdquo; McCloy says.&nbsp;
&mdash;Lisa Gibson

China's growing renewable energy sector represents enormous opportunities, but significant challenges, for foreign investors.

Key Renewable Player

Government policy in Thailand encourages further power production from biomass than is already being realized. That expansion could catapult the country to the top of the biomass market chain, and global companies are starting to take notice.
 Recognizing Thailand&rsquo;s potential, China-based solutions provider DP CleanTech has opened an office in Bangkok, after successful development of many biomass power plants in China, and more in the works. &ldquo;DP CleanTech has identified Thailand to be the next major market in its rapid rollout of biomass power systems in Southeast Asia,&rdquo; the company&rsquo;s website says. &ldquo;Southeast Asia is home to one-third of the world&rsquo;s attainable biomass, of which Thailand contributes a significant proportion.&rdquo;
 But that expansion could also cause competition for feedstocks and, according to some, even a shortage. And on the heels of that shortage comes a price increase for raw material, according to Carl Kukkonen, CEO of Viaspace Inc. Viaspace is working with about five companies in Thailand that are interested in growing and using its trademark biomass feedstock, Giant King Grass, as a cheaper alternative to pricier materials available there now. The price hike has cost money for companies in long-term power purchase agreements that were signed with feedstock price assumptions, Kukkonen says.&nbsp;
 Since relying on the spot market has proven to be an ineffective strategy, companies are looking for a more reliable and secure feedstock, he adds. Most biomass power plants in Thailand either direct combust or employ anaerobic digestion (AD) processes, Kukkonen explains, adding that two of the most prominent AD waste feedstocks are from tapioca and pineapple processing. One of Viaspace&rsquo;s prospective partners in Thailand, which Kukkonen declined to disclose, is developing an AD facility with a pineapple company and plans to codigest 30 percent Giant King Grass with the pineapple waste stream. Viaspace&rsquo;s prospective partner will plant trials of the grass to ensure it will grow well in Thailand, but Kukkonen isn&rsquo;t worried. &ldquo;We&rsquo;re certain that it will.&rdquo;
 If all tests go well, that company plans to build several plants that will digest 100 percent Giant King Grass, Kukkonen says, but didn&rsquo;t release a timeline for the construction of the power plants. &ldquo;We expect that there will be Giant King Grass growing in Thailand in the next few months.&rdquo;
 DP CleanTech doesn&rsquo;t seem as concerned with feedstock availability, but shares in the excitement about the growing biomass power industry there. &ldquo;Thailand&rsquo;s abundant resources coupled with its accommodative renewable energy policies represent an excellent opportunity for further biomass development and a priority market for DP CleanTech,&rdquo; the company says.
&mdash;Lisa Gibson

MASSIVE GRASS: Viaspace is looking at partnerships to allow utilization of its Giant King Grass in Thailand. 

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A push for biomass power expansion might make Thailand a prime market in the global industry.

Trends in Thailand

Researchers at the University of Georgia are using an $880,000 USDA grant to experiment with pine tree plantations for potential use for electricity and biofuel production.
 The project will not examine the economics of using trees for bioenergy, but will instead focus on quality growth methods and environmental impacts on soil and water quality and carbon sequestration.
 Each of the four team members, researchers at the UGA Warnell School of Forestry and Natural Resources, has a different role. Associate Professor Daniel Markewitz will study the amount of carbon stored underground by the trees and what happens to it when they are harvested. Associate Professor Michael Kane will focus on aboveground tree components including tree dimensions such as height, diameter and branching, as well as biofuel and timber biomass. Professor Robert Teskey will research the biology of tree growth, what happens physiologically to pine trees when planted closer together and how efficiently they capture energy from the sun. And, Assistant Research Scientist Dehai Zhao will provide an integrative life-cycle carbon analysis, modeling above- and below-ground carbon accumulation and losses of carbon due to forest management activities, identifying the benefits of pine biofuels for reducing carbon loss to the atmosphere.
 Markewitz says the project is already underway, and the team is currently recruiting students to work on the project and selecting specific project sites. Field work will begin this summer.&nbsp;
 The researchers are focusing on pine trees for many reasons, Markewitz says.&nbsp; &ldquo;First, we&mdash;in the collective sense including forest industry, timber management organizations, nonindustrial private forest landowners, public landowners, universities, etc.&mdash;are very good at growing pine,&rdquo; he says. &ldquo;This is amply demonstrated by the timber resources growing in the Southeast, so there is already a lot of growing stock on the ground and a great deal of available infrastructure to grow and harvest this feedstock.&rdquo;
 Additionally, most of the planted southern pines are native to the region, Markewitz says. &ldquo;As such, we are trying to improve on many decades of existing knowledge and investment. Finally, the USDA was specifically interested in a number of feedstocks, which included southern pine.&rdquo;
 The researchers believe that incorporating bioenergy feedstock production into existing systems of timber production could be beneficial to regional landowners and to national energy security.
&mdash;Anna Austin

PINEY PROSPECTS: A University of Georgia study will focus on improving growth methods for pine trees and the environmental impacts on soil and water quality and carbon sequestration.   

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Researchers are investigating the use of pine trees for bioenergy.

Pine Tree Potential

February marked an important milestone in the establishment of a bioenergy center in Vero Beach, Fla., as developer Ineos Bio JV held a groundbreaking ceremony that drew a larger crowd than expected to the project site.
 More than 200 people attended the event for the Indian River BioEnergy Center, according to Dan Cummings, vice president of commercial and external affairs for Ineos Bio. The excellent turnout included officials from the U.S. departments of agriculture and energy, as well as local government officials and investors.
 The excitement revolves around an innovative gasification-fermentation process that will produce 8 million gallons of bioethanol annually, as well as 6 megawatts of power, using local yard and household wastes from a nearby landfill.
 Unlike many power-producing gasification systems, the resulting steam is what generates the power, not the syngas. It is cooled and then fed into a steam turbine, according to Cummings. About 4 megawatts will be used at the facility and the rest will be exported to help power 1,400 homes, although power purchase agreements have yet to be finalized. &ldquo;That&rsquo;s what gives us a very good life-cycle profile, not only for this process, but for the fuel as well,&rdquo; he says. The syngas, produced at a certain temperature regime to maintain quality, is used in the subsequent fermentation process to make the bioethanol, although a variation of the process does allow the use of syngas for electricity. &ldquo;We do have an alternative design where we actually bypass some of the syngas directly to the boiler to produce even more power,&rdquo; says Mark Niederschulte, Ineos Bio chief operating officer. &ldquo;That&rsquo;s a design we&rsquo;ve come up with to satisfy the needs of the European market.&rdquo;
 Although the power production aspect of the facility does bring efficiency and economic benefits, it is essentially an outcome of the design and technology, Niederschulte adds. &ldquo;Functionally, it works out,&rdquo; he says. &ldquo;It&rsquo;s an outcome of the heat interaction of the design to try to maximize the energy efficiency of the entire process.&rdquo;
 Ineos Bio began construction in February and expects the facility to be completed in April of 2012, with commissioning and operation shortly thereafter, Cummings says.
&mdash;Lisa Gibson

INEOS ADVANCES: Ineos Bio is developing a bioenergy center that will produce ethanol and power from biomass.

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Ineos Bio's bioenergy center will generate 6 megawatts of power from a gasification system, but not from the syngas. 

Energy Innovation 

The Alabama Department of Economic and Community Affairs has provided a $56,000 grant to the University of Alabama in Huntsville so that it can continue to assist ADECA in implementing its Biomass Energy Program.
 Through the program, ADECA reimburses companies up to $75,000 in loan interest payments over a maximum three-year period to install systems that use wood waste to power manufacturing processes. Eligible applicants include industrial, commercial, and institutional facilities, as well as agricultural property owners and city, county and state entities. Landfill gas projects are also eligible for funding consideration.
 UAHuntsville&rsquo;s role in the program has been to visit companies interested in the program to observe existing equipment and operations to determine whether converting to a wood waste system is feasible. Once completed, university experts return to the project to ensure that the new equipment is operating properly and collect and analyze energy savings data for each project.
&mdash;Anna Austin

Grant money helps University of Alabama to continue to assist state biomass program.

Bioenergy Backing 

New investors and start-up companies in Minnesota will soon have access to a new funding resource to help get projects off the ground.
That includes emerging biomass and biofuel companies in the state, according to Melissa Kjolsing of the BioBusiness Alliance of Minnesota, a nonprofit state organization dedicated to fostering and cultivating the long-term viability of the state's bioscience sector.
 In short, the Minnesota Angel Network provides a secure and focused web-based portal to facilitate connections between angel investors and companies, making it easier to obtain angel funding to grow their business. The system is also designed to save time for the investor by helping the company prepare for due diligence questions by providing seasoned mentors to aid them through the process.
 The program also aims to help maximize utilization of the Minnesota Angel Investor Tax Credit, which was signed into state law in April 2010 and provides a 25 percent individual income tax credit for qualified investors who put money into start-up and emerging companies focused on high technology or new proprietary technology. There is $15.9 million in tax credits available for 2011, according to the Minnesota Department of Employment and Economic Development.
 The program is the result of two years of planning and is supported by the Biobusiness Alliance of Minnesota, several regional investor networks, Minnesota Initiative Foundations, universities and business leaders.&nbsp;The network&nbsp;is part of The BioBusiness Alliance of Minnesota's Full Spectrum Funding initiative that is focused on improving the funding environment for start-up companies statewide.
 Kjolsing says that the Minnesota Angel Network website is still beta testing the application process, but the network will open the portal sometime this summer to companies and projects.
&mdash;Anna Austin

Minnesota Angel Network aids new companies in need of funding.

A Financial Blessing

Biomass power plant project opponents commonly claim that particulate matter (PM) emissions cause lung ailments and other health detriments and use that&nbsp; information to block the building of new facilities in their communities. What the developers of these plants, and authorities who permit them know, however, is that there are strict PM and other emissions limitations in place, and a number of options to help achieve these limits.
 Another common misconception of project opponents is that emissions regulation enforcement is passive, when it is quite the opposite. The U.S. EPA and state air pollution control districts closely monitor all power plants to make sure that they are in compliance with these laws, in order to protect public health and preserve air quality. In February, two 15.5-megawatt wood-fired biomass power plants in California&rsquo;s San Joaquin Valley were fined a combined total of nearly $850,000 for failing to comply with PM and other emission regulations on both federal and district levels. In addition to the fines, the plants had to immediately install new equipment, and will be closely monitored for the next two years while they complete several other compliance orders.
&nbsp;
PM regulations currently in place are the result of decades of research and have changed over the years as methods of gathering relevant data have become more advanced. The first standards for PM were established by the EPA in 1971 under the Clean Air Act, and then were significantly revised in 1987 when the EPA changed the indicator of the standards to regulate inhalable particles smaller than or equal to 10 micrometers in diameter (PM10), or one-fourth of the size of a grain of table salt. Ten years later, they were changed again, setting separate standards for PM10 and fine particles (PM2.5) due to links with health problems and smaller microparticles. Twenty-four hour and annual standards were established for PM2.5, and PM10 has only a 24-hour standard due to insufficient evidence linking health problems to long-term exposure.
 Most recently, the EPA&rsquo;s Maximum Achievable Control Technology rules, which were released Feb. 23, made additional, tighter requirements to new and existing biomass boiler PM and other emission limits and requirements. (To learn more about the changes, see &ldquo;MACT Madness&rdquo; on page 30.) So what might influence a biomass plant&rsquo;s PM emissions and the type of control equipment that&rsquo;s required? According to Paul Beauchemin, director and partner at Envirochem Services Inc., that depends on a number of factors.
 PM Parameters and Equipment The chemical composition of the feedstock, physical and operational parameters, the combustion process and the type of air pollution control equipment used all affect PM emissions, Beauchemin says. For example, fuels high in ash, such as agricultural biomass, will require more costly PM controls than low-ash fuels.
 &nbsp;The combustion of wood, which is commonly used for power generation, produces different types of particles, according to Andy Miller, EPA national program director of global change research. These include small pieces of unburned fuel, which tend to be the largest particles. &ldquo;These are fairly rare in industrial systems, especially in power generation plants, and can easily be captured by electrostatic precipitators (ESPs), cyclones and fabric filters,&rdquo; he says.
 &nbsp;There are also particles composed of the inorganic ash in wood, and these tend to be much smaller, on the order of a micrometer in diameter. &ldquo;These are similar to the ash particles from coal plants, but do not have as much heavy metal as is the case for coal,&rdquo; Miller says. &ldquo;These are well-controlled using both fabric filters and ESPs.&rdquo;&nbsp;
 The last type of particle is composed of condensed liquid or gas-phase organic matter that cools and forms small droplets. &ldquo;These are also about a micrometer in diameter, but sometimes they are still in the gas phase when they get to the control system,&rdquo; Miller says. &ldquo;This material often condenses on the ESP or the filter, and is usually combustible, so that adds some operational difficulties to the system. There are ways around this problem, but the designers need to be aware of the issue, which they are for large systems like power generation plants.&rdquo;
 In general, Miller says the most effective PM controls are fabric filters, with cyclones being much less effective and electrostatic precipitators (ESPs) falling in between, but much closer to fabric filters than to cyclones. For larger wood-fired plants, Beauchemin says he believes the best control option is ESPs. &ldquo;For other fuels, material balances on the other chemicals in the fuel such as chlorine and sulfur may determine that some form of scrubbing or other mitigation process is required.&rdquo;
 The final control level selected may depend on the evaluation of local and long-range impacts through the use of air shed analyses and dispersion modeling, Beauchemin adds. &ldquo;There are now integrated controls appearing on the market that can manage PM, nitrous oxides (NOx), sulfur oxides and other gases in a single system,&rdquo; he says. &ldquo;Larger scale units typically have better controls than smaller units, usually because they can afford to, or are required by permit to have them. For example, small-scale industrial facilities are not currently fitted with ESPs, NOx reduction systems or air preheaters, all of which can affect the emissions.&rdquo;
 Carlos Garcia, senior air quality engineer at the San Joaquin Valley Air Pollution Control District in California says the best controls depend a lot on the specifics of the particular installation. &ldquo;[The best controls] for new biomass plants are likely to be a series of control techniques, such as a set of cyclones or a multiclone to take out larger particles, followed by a scrubber, followed by a baghouse,&rdquo; Garcia says.
 All eight biomass plants in the San Joaquin Valley were equipped with baghouses or ESPs when they were constructed. &ldquo;These controls, which have similar abilities to control particulate emissions by 90-plus percent, were considered best available control technology (BACT) when constructed, and are still generally thought of as very good control technologies,&rdquo; Garcia says.
 District rules require new biomass plants to control emissions with BACT, so their choices are limited, Garcia points out. &ldquo;BACT is defined as the most effective control that has been achieved in practice anywhere in the world, at minimum. Also, anything that is more effective must be considered, and it will be required if it is also cost-effective.&rdquo;
 Garcia points out that the process of determining BACT is project-specific, and is quite complex and time consuming. &ldquo;It would probably result in requiring the installation of something like the series of controls [cyclones-scrubber-baghouse],&rdquo; he says.
 Easing Fears of PMs
 As those in the biomass power industry know, air quality permitting regulations are designed to prevent health problems from industrial facilities, including biomass plants, Garcia says. &ldquo;We can&rsquo;t speak for the rest of the country, but PM emissions from biomass plants in the San Joaquin Valley are well-controlled. All have either baghouses or ESPs, and newly proposed plants would be expected to be even better controlled as technology has improved since the existing plants were permitted.&rdquo;
 As for fears about PM in siting new plants, Garcia says it shouldn&rsquo;t be an issue, at least not in the San Joaquin Valley. &ldquo;Our permitting process would not allow us to issue a permit to a facility that is expected to cause a significant health risk to the public,&rdquo; he says. &ldquo;Of course, no one wants one in their backyard, just like they don&rsquo;t want any industry in their backyard.&rdquo;
 To assure compliance, biomass plants in the San Joaquin Valley are equipped with continuous emissions monitors that record emissions of some pollutants (although generally not PM) on an ongoing basis, which can be accessed from the district offices. The plants are also required to hire a third party to test the pollution being emitted from their facilities, Garcia adds, including particulate matter emissions, and report that information to the district. &ldquo;Permits also contain conditions of operation that are expected to assure compliance with permitted emission limits, and we regularly inspect these facilities, as we do all permitted facilities, to ascertain compliance with those permit conditions.&rdquo;
 When the district finds sources operating out of compliance, it issues Notices of Violation and requires them to come back into compliance. These facilities can be charged significant penalties for their period of noncompliance&mdash;the longer the periods of noncompliance, the higher the penalties, Garcia says.
 He points out that some biomass plants operate for years without significant violations, and some have larger problems, such as the two recently fined in the San Joaquin Valley.
 Miller says, generally speaking, biomass PMs don't pose any greater risk than coal emissions, but there will be differences between coal and wood, in that coal has more heavy metals and wood has more polycyclic aromatic hydrocarbons on a per unit energy input basis (pounds of emissions per million Btu of fuel input). &ldquo;My view is that the public should be aware of these issues, and that all wood units should have effective controls,&rdquo; he says. &ldquo;It&rsquo;s easy to look at small residential, commercial and industrial wood combustion units and think that a power plant will be the same, and will generate more [emissions] because it is bigger. However, it is always more cost-effective to have effective controls on larger units, simply because the cost of the control is a much smaller fraction of the total plant cost, and because large plants will have enough technical capability and people to make sure the systems are operating well.&rdquo;
 Pollution control equipment manufacturers such as Eisenmann Corp., which offers a wet ESP that provides PM, acid gas and sodium oxide (SOX) removal, are confident their equipment can meet boiler MACT emissions limits. &ldquo;The developers who feel [that EPA's emissions limits] are too harsh will convert their boilers to fossil fuels, while others will put in the appropriate emissions controls to meet compliance and probably modify their feedstocks to meet the [return on investment] they are looking for,&rdquo; says Bradley Ginger of Eisenmann. &ldquo;We'll most likely see new projects that will be using different feedstocks. Either way, the market will adapt so the economics will work out.&rdquo;
 Some projects use separate systems to handle each pollutant, including PM, but that isn&rsquo;t ideal, Ginger says. &ldquo;Having multipollutant controls in place will give the developer the flexibility needed to stay in compliance and stay profitable.&rdquo;
 Author: Anna Austin Associate Editor, Biomass Power &amp; Thermal <a href="mailto:aaustin@bbiinternational.com">aaustin@bbiinternational.com</a> (701) 738-4968

2011/03/13008036218528.jpg

CLEAN AND CLEAR: Eisenmann says its wet ESP is capable of meeting EPA's MACT emissions limits. 

2011/03/13008036771152.jpg

Today's emission control devices are capable of keeping particulate matter emissions at reasonable levels and in line with regulations, but the best option may vary with each project.

Controlling PM

Project finance is a creative, sophisticated means to secure debt and other financial resources to construct major industrial facilities with minimum reliance on recourse to equity owners. The principal advantage of project finance is reducing the impact of the financing package on the owners&rsquo; balance sheet and other lending relationships. The techniques developed in project finance can be useful in the biorefining industry to finance capital-intensive projects like biorefineries, chemical plants and similar facilities. The key characteristic of project finance is that the &ldquo;project&rdquo; is intended to support the financing required for its construction and operation, without significant dependence on the balance sheets or guarantees of project equity owners. The equity participants might be a single owner, or two or more joint venture parties, typically with an interest in the plant&rsquo;s feedstock or production. How the equity is divided is likely to depend more on input or off-take relationships and management or operating expertise than on actual cash invested, or land and equipment provided. The equity may be divided into classes having different interests and rights.&nbsp; The debt financing is even more likely to be stacked with different rights and returns. Typically, one or more banks or financial institutions will provide long-term senior debt for a significant percentage of the as-built value of the asset, secured by a first mortgage on that asset. Subordinated debt of one or more tranches will enjoy a higher return based on the additional risk undertaken. Subordinated debt to finance equipment and working capital will most likely be secured by equipment, inventories and receivables. In each case, the lenders will focus principally on the anticipated cash flow of the project to sustain principal and interest payments on their loans. The package may also include other financial resources or benefits integral to the enterprise&rsquo;s financial viability, such as industrial revenue bonds, tax incentives, government grants and similar enhancements. Matching the requirements of the project with the applicable tax regime can be both challenging and productive. For instance, a major fertilizer plant was constructed in a manner to qualify as movable personal property to avoid being taxed as real property. The political dynamics and contractual arrangements need to be analyzed carefully to assure that government enhancements will remain in place for the duration of the project, or at least until the debt has been repaid. Project cash flow will typically depend on long-term contracts to supply feedstock, energy and transportation, and to purchase outputs. The contracting parties could be other major players in the industry and could be one or more of the equity owners of the project. These supply or purchase agreements will normally remain in place for the duration of the project or financing, subject to some latitude for adjustments if circumstances change. If one party is on both ends of the production stream, a tolling agreement might be considered. Management or operating agreements will be required. In all cases, the lenders will evaluate the strength and staying power of the contracting parties because they will inevitably be the source of the cash flow required to service the debt. If the equity owners are parties to these agreements, they will indirectly provide some measure of guarantee. The lenders will insist on several financial and operating covenants in their loan agreements. Both the project developers and lenders will need to assess the likelihood of noncompliance with covenants and the consequences of failure or default on the part of the project. Lenders may require limited recourse to equity participants or contracting parties in the event the project&rsquo;s ability to meet its obligations is threatened. Although separate lending agreements may be carefully drafted between each financing source and the project, intercreditor agreements are advisable to clarify the differing rights of the lenders among themselves.&nbsp; Bringing all of these pieces together requires lengthy and detailed planning. Financial projections will be essential, including highly credible construction and equipment cost figures and operating forecasts buttressed by long-term agreements. The plant location will determine the availability of grant and tax benefits and the operating and tax expenses to be incurred. A detailed schedule or critical path from planning stage to operations will guide the process. The team required to accomplish planning will include finance, operations, sourcing and marketing, legal and accounting representatives. Interdependent agreements will address everything from construction to asset ownership upon debt repayment. Variables will make almost every project unique; imagination and flexibility will be essential. Early discussions with financing sources will be important to assure a realistic plan. The conceptual phase isn&rsquo;t too early to approach potential financing sources. Outside advisors will bring expertise to the table to produce a financing package that will be viewed favorably by potential lenders. Author: Dean R. Edstrom Partner Attorney, Lindquist &amp; Vennum (612) 371-3955&nbsp; <a href="mailto:dedstrom@lindquist.com">dedstrom@lindquist.com </a>

Detailed planning is required to fund projects successfully

Biorefinery Project Finance Techniques

1. San Francisco-based SynGest Inc. has been approved to receive $2.5 million from the Iowa Power Fund and Iowa Office of Energy Independence for the design and engineering stage of a biomass-to-ammonia production facility in Menlo, Iowa. Contingent upon receiving the state funding, SynGest managed to successfully raise an additional $3.5 million in new cash equity, according to CEO Jack Oswald. The future facility, expected to carry a total capital cost of $135 million, will utilize approximately 130,000 tons of decommissioned railroad ties as feedstock to produce 50,000 tons of biobased anhydrous ammonia annually through a pressurized oxygen-blown biomass gasifier operating in an expanding bed fluidized mode.
2. Butamax Advanced Biofuels LLC announced in December that the U.S. Patent and Trademark Office has granted a patent encompassing Butamax&rsquo;s isobutanol-producing biocatalyst. The patent is titled, &ldquo;Fermentive Production of Four Carbon Alcohols.&rdquo; Butamax has filed an extensive patent portfolio for its proprietary technology across the biofuel value chain, including biocatalyst, bioprocess and fuels. A number of Butamax&rsquo;s patent applications have been successfully accepted into the USPTO&rsquo;s Green Technology Pilot Program for accelerated review. &ldquo;This biocatalyst patent is a reflection of our first-mover position in isobutanol,&rdquo; says Tim Potter, CEO. As more of our patent portfolio matures, our patents will play an important role in our efforts to develop and commercialize biobutanol for the global transport fuel market.&rdquo;
3. German airline Lufthansa has announced plans to fuel select commercial passenger flights with a 50/50 mix of biofuel and traditional kerosene jet fuel. According to the airline, the project is backed by the German government within the framework of its aviation research program, which aims to increase the sustainability of air traffic. Biofuel used for the project will be procured from Neste Oil, which recently began operations at a renewable diesel plant in Singapore. The six-month trial program is slated to begin in April. During the research period an Airbus A321 that travels commercially along the Hamburg-Frankfurt-Hamburg route will be fueled with the 50 percent biofuel mix, pending the fuel&rsquo;s certification. According to Lufthansa, the primary goal of the project is to conduct a long-term trial to study the effect of biofuel on engine life and maintenance.
4. Neste Oil has announced the start-up of its new renewable diesel plant in Singapore. Production at the facility will be ramped up on a phased basis. According to Neste Oil, the 800,000 ton (240 MMgy) plant was completed on schedule and on budget. A similar-sized NExBTL plant, which is under construction in Rotterdam, Netherlands, is expected to be commissioned in the first half of 2011. In addition, Neste Oil already operates two smaller renewable diesel plants in Finland. According to Jarmo Honkamaa, Neste Oil&rsquo;s deputy CEO and executive vice president, all the plants are able to use a wide variety of renewable raw materials to produce NExBTL diesel. &ldquo;Currently Neste Oil uses palm oil, rapeseed oil and waste animal fat sourced from food industry to produce its NExBTL diesel,&rdquo; he says. Neste Oil&rsquo;s NExBTL production process involves hydrotreating feedstock.
5. Bolingbrook, Ill.-based Elevance Renewable Sciences Inc. and Dow Corning Corp. have introduced a new biobased home-care product, Dow Corning HY-3200 Emulsifying Soy Wax, the third in a growing family of biobased product lines based on Elevance&rsquo;s novel metathesis of natural lipids. According to Andy Shafer, vice president of sales and market development for Elevance, Dow Corning HY-3200 provides emulsifying characteristics that the industry typically receives from polyethylene glycol, a polyether compound traditionally made from petroleum and used in various industrial manufacturing applications. He added that the biobased ingredient also acts as a thickening agent that simplifies formulations. The product will be commercially available in 2011.
6. The Organic Matrix Combustion catalyst (OMX) and FT microchannel reactor system have won the Institution of Chemical Engineers (IChemE) 2010 award as the Innovative Product of the Year. Made by U.K.-based Oxford Catalysts Group, the catalyst is part of the winning system that features a novel FT microchannel reactor at a plant in Austria. According to Matt Stalker of IChemE, the awards &ldquo;are the most prestigious in chemical and process engineering worldwide. They are global in reach, attract entries from all over the world,&rdquo; and have been presented for the past 17 years, he said. The OMX is characterized by crystallites that feature a terraced surface to enhance activity, combining a metal salt with an organic compound to create a process that stabilizes the catalyst when used in the FT microchannel reactor, which utilizes 900 microchannels in the millimeter range. As the winner of the bioprocessing award, Stalker said the OMX/FT reactor system was considered the best product originating from the process industries to be manufactured commercially after July 2009.
7. 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; The research conducted by Lessner and his colleagues focused on a strain of methanogen known as Methanosarcina acetivorans. According to Lessner, this particular strain was used because it can naturally consume more substrates or chemicals than most other methanogens.
8. Lakewood, Colo.-based ZeaChem Inc. achieved two key financial milestones that will help bring online its 250,000 gallon-per-year demonstration-scale biorefinery currently under construction in Boardman, Ore. First, the company obtained a guaranteed maximum price, under the EPC agreements with engineering firm Burns &amp; McDonnell, for construction of the project&rsquo;s core facility. Second, ZeaChem intends to use a $25 million grant from the U.S. DOE to fund the independent front and back-end cellulosic process components, which will enable ZeaChem to produce fuel-grade cellulosic ethanol as well as intermediate chemicals from nonfood biomass. John Nobles, president of Burns &amp; McDonnell&rsquo;s process and industrial group, says, &ldquo;Since 1898, we have built a reputation of making our customers successful with practical technology advancements and predictable costs. We look forward to helping ZeaChem deploy their technology.&rdquo;
9. As part of the Obama Administration&rsquo;s continuing commitment to accelerating R&amp;D to develop a more sustainable transportation system, the U.S. DOE is accepting applications for up to $30 million in total funding for small-scale process integration projects that support the development of advanced biofuels. Specifically, the funding opportunity provides up to $30 million over the next three to four years to support as many as five projects. The projects will focus on optimizing and integrating process steps that convert biomass into biofuels and bioproducts that will eventually be used to support hydrocarbon fuels and chemicals. These process improvements could include pretreatment methods that alter the biomass to improve the yield of sugars in subsequent process steps; less costly and more efficient enzymes that produce sugars; and fermentation organisms and catalysts that convert the sugars into fuel and chemical intermediates. Successful applicants are expected to demonstrate the research potential to improve the economics and efficiency of their proposed processes.
Share your industry briefs: To be included in Business Briefs, send information (including photos and logos if available) to: Industry Briefs, Biorefining, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also fax information to (701) 746-8385, or e-mail it to <a href="mailto:rkotrba@bbiinternational.com">rkotrba@bbiinternational.com</a>. Please include your name and telephone number in all correspondence.

Business Briefs: People, Partnerships & Deals

The U.S. DOE has awarded supercomputing time to three biofuel-related projects through its Innovative and Novel Computational Impact on Theory and Experiment program. The awarded time will allow researchers to use computer simulations to perform virtual experiments that would otherwise be impossible or impractical to perform. One of these three teams will be performing complex simulations to explore how biojet fuel performs in aircraft engines, as part of a project titled, &ldquo;Large Eddy Simulation of Two-Phase Flow Combustion in Gas Turbines.&rdquo; The project, led by Thierry Poinsot, a researcher at the European research institution CERFACS, has been awarded 10 million processor hours. According to Poinsot, the supercomputing time his team was awarded will be used to simulate the performance of existing aircraft and helicopter engines; specifically the conversion channels of these engines. &ldquo;This is the place where the kerosene and the air are mixed and burned to get the power, it is really the heart of the engine,&rdquo; he says. Existing aircraft engines have been optimized to effectively and efficiently burn kerosene, not biofuels. Before changing to a new fuel source, such as biojet fuel, it is important to understand how the engine will react. This is because any change in fuel can affect engine stability, such as oscillation, Poinsot says, which could lead to dangerous in-flight problems. Simulating biobased fuel use in existing aircraft engines with the DOE&rsquo;s supercomputers will allow Poinsot and his team to identify possible problems in less risky conditions. &ldquo;We want to study combustion stabilities for normal fuels, the ones we have today,&rdquo; Poinsot says. &ldquo;Then we plan to use biofuels to see if they could lead to problems in terms of instabilities. That is the ultimate goal of the project.&rdquo; Although the biofuels component of the project is new, Poinsot says his team has been studying aircraft engines through simulations for several years. He also notes that he expects this line of study to continue well into the future. &ldquo;Demand for these studies is huge in Europe at the moment, and it&rsquo;s about the same in the states actually,&rdquo; he says. &ldquo;Every company is looking for a way to predict engine performance.&rdquo; In addition to publishing the results of the research in scientific journals, Poinsot says he expects the outcomes to provide real and immediate benefits to industry. &ldquo;Since we are computing real engines, we hope to be able to give some guidance to companies working on these engines, to try to avoid instability,&rdquo; he says. &ldquo;That is the goal of the program of course, to try to control these things at the design stage.&rdquo; Biofuels projects at Oak Ridge National Laboratory and the University of Washington have also been awarded supercomputing hours. An ORNL project led by researcher Jeremy Smith, titled, &ldquo;Cellulosic Ethanol: Simulation of Multicomponent Biomass System,&rdquo; was awarded 30 million processor hours. The project aims to provide simulation models of biomass and biomass enzyme interactions, with the ultimate goal of allowing for improved second-generation biofuel yields. The University of Washington project, titled, &ldquo;Towards Breakthroughs in Protein Structure and Design,&rdquo; has also been awarded 30 million process hours. The project, led by UW researcher David Baker, will include simulations of &ldquo;de-novo&rdquo; enzyme design for fixation of carbon dioxide to create biofuels. &mdash;Erin Voegele

Biofuels projects awarded time on U.S. DOE's most powerful supercomputers

Empowering Simulations with Supercomputing

Researchers at New Mexico State University have been awarded a $2.3 million grant from the U.S. Air Force to study all aspects of algae jet fuel production, from cultivation to utilization. According to Shuguang Deng, a NMSU professor of engineering leading the study, the project is slated to last approximately 12 months. One key aspect of the study is to determine if NMSU&rsquo;s technology is feasible, Deng says. &ldquo;If it is feasible, then what will be the cost?&rdquo; he asks. &ldquo;We want to find out what the bottom line is.&rdquo; The project is designed to address each stage of algae-based biojet fuel production. Deng and his team will use two algae cultivation methods, an open pond system and a bioreactor. &ldquo;We are trying to optimize energy production from the algae species,&rdquo; he says. &ldquo;Not only biomass, but more importantly I think for this project is the lipids, because we need oil.&rdquo; The team is currently producing about one dry kilogram of algae a month, but Deng says that rate will increase to approximately 15 to 20 dry kilograms per month by March 2011. Algae produced by the team will then be transferred to Deng&rsquo;s lab, where his team will work on extraction and conversion processes. &ldquo;We are working on a few options right now,&rdquo; Deng says. One involves multiple steps, including drying, extraction and reforming. &ldquo;We&rsquo;re also working a very new process, called extractive conversion,&rdquo; he continues. &ldquo;So, we will do the extraction and conversion in a single step.&rdquo; Fuel produced in NMSU&rsquo;s lab will be transferred to the University of Central Florida, where it will be burned in a jet engine to determine what effects it might have on the engine components and fuel system. Since the project is only slated to last 12 months, Deng says the team will be unable to perform any long-term studies. &ldquo;If possible, we would like to continue this project with the Air Force for another one or two years,&rdquo; he says. At the close of the project, Deng and his team will supply the Air Force with samples of both the finished biojet fuel and the algae oil. Deng also notes that he has been approached by the Canadian Aviation and Aerospace Museum, which would like to create an exhibition to display a sample of the algae oil and biojet fuel. According to Deng, the U.S. currently imports about 30 percent of its energy from abroad. Domestically produced advanced biofuels could help reduce that percentage. He also notes that annual jet fuel use on a global basis equates to approximately 80 billion gallons, with the U.S. Department of Defense alone consuming nearly 4.6 billion gallons of that. In addition to providing a national benefit, NMSU&rsquo;s algae research will also benefit its local community. &ldquo;I think New Mexico State is establishing itself as a national leader on algae biofuel as a resource,&rdquo; Deng says. &ldquo;I think this grant is going to boost our [program] and is also going to help us build up its foundation for the future.&rdquo;&nbsp; &mdash;Erin Voegele

NMSU embarks on extensive algae initiative funded by the U.S. military

Advancing Algae

The first part of the Drayton Valley Bio-Mile&rsquo;s story is nothing out of the ordinary. Around 2008, things for the small community of Drayton Valley, Alberta, were looking pretty bleak. The shutdown of an OSB plant, costing the town nearly 500 jobs and 12 percent of the tax base, didn&rsquo;t help. For a town of 7,000, that&rsquo;s huge, says Mayor Moe Hamdon. But after searching for a way to save the community, Hamdon and his team decided the best way back to prosperity was to use the vast resources surrounding the town: oil and gas, forestry and agriculture. &ldquo;Economic development happens from two drivers,&rdquo; Hamdon says. &ldquo;Desperation or inspiration.Clearly, the beginning was desperation.&rdquo; The answer for Hamdon was what is now called the Drayton Valley Bio-Mile, an industrial cluster based on a single premise; one person&rsquo;s waste (or industry in this case) can be another person&rsquo;s input. The goal is to take wood fiber and plant-based biomass from the surrounding region and facilities, and produce a wide array of products including traditional sawmill products, electricity, plastics and resins, cellulosic fuel, synthetic natural gas, biobased chemicals and more. The one-square-mile area will partner with a Weyerhaeuser sawmill and the Valley Power cogeneration facility. In its completion, Hamdon says, the site will feature a power plant, a greenhouse, a research center, a biochar facility that could make green chemicals, and other technology to produce renewable fuel. &ldquo;The agricultural community will also be involved with purpose-grown crops,&rdquo; he says. Wood waste from the mill will be used for electricity and steam generation, which can then be used to make syngas, and from there, renewable fuel and biobased chemicals, depending on the technology used. &ldquo;When you look at the sustainability aspect of it and what we hope to achieve, it is something that excites a lot of people,&rdquo; Hamdon says. And he&rsquo;s right. The Bio-Mile has already received support from both the federal and provincial governments. As for partners, the list includes CLIB2021, a German-based bioindustrial consortium that has chosen Drayton Valley as the site for its first North American headquarters, where the group will study cellulosic fuels and biochemicals; Otoka Energy, a biomass-to-energy company that has plans to set up a power plant in 2011; TTS Inc., a research and development firm that is planning to bring two 30,000-square-foot fiber-mat facilities to the Bio-Mile; Weyerhaeuser Co.; the University of Alberta; and a slew of others. Hamdon says if a person drove by the Bio-Mile today, there wouldn&rsquo;t be as much to see as there will be in another year. But even that will just be the beginning, says Hamdon. &ldquo;Our vision sees it (that square mile) going beyond its borders.&rdquo;&nbsp;&nbsp;
&mdash;Luke Geiver

Hard times inspire a futuristic biocluster in Canada

The Drayton  Valley Bio-Mile

A recent study conducted by SBI Energy predicts that the renewable chemical industry will grow to $7 billion by 2015, more than doubling the expected $3 billion market value for 2011. SBI Energy attributes this increase to steady growth in the two largest biorenewable chemical markets, the platform and intermediate biorenewable chemicals sectors, as well as key regulatory and research developments. According to SBI Energy, platform biorenewable chemicals will continue to represent approximately two-thirds of the market over the next five years, with glycerin and lactic acid continuing to dominate the sector. The company also predicts that intermediate biorenewable chemicals will grow at an even stronger rate. SBI states that bioethylene will be the largest intermediate biochemical in the space. However, due to its significantly higher production cost, polyhydroxyalkanoates (PHA) will represent the most revenue in the sector. In the next five years, the study predicts that annual production of polylactide (PLA) will double, the production of 1,3 propanediol will triple, and the production of PHA will quadruple. The study also shows that the U.S. and European Union were the top two markets for biobased renewable chemicals in 2009, with a respective 22 percent and 19 percent of product sales. While both regions are described as top markets for nearly all types of biochemicals, larger sales of biobased polymers allowed the U.S. to claim leadership in the industry. SBI Energy states that China continues to be a strong market for glycerin and lactic acid, but notes that the country hasn&rsquo;t yet become a strong contender for other biochemical segments, such as biobased polymers.&nbsp;
&mdash;Erin Voegele&nbsp;

Study predicts significant growth in the biobased chemicals industry

Exponential Growth, Increasing Demand

In late 2010, the Global Biofuels Alliance tossed its hat into the biofuels arena, bringing the total number of trade organizations serving the biorefining sector to eight. While some of these voices, including the Renewable Fuels Association, the American Coalition for Ethanol and National Biodiesel Board have an extensive history of serving the interests of first-generation biofuels, several new organizations have popped up in recent years to support the development of second- and third-generation companies. When the policy goals of these disparate trade organizations align, it is possible for them to speak to federal lawmakers with a powerful chorus of voices, which has clear benefits for the industry as a whole. When different factions of the industry start pushing opposing messages that frame each other as competitors, however, the results can be overwhelmingly negative. These competing messages can confuse federal lawmakers and undercut the ability to develop the policy objectives that all sectors of the biorefining industry need. Those leading these trade organizations seem to understand the danger and consequences that can result from treating each other as competition rather than allies, and have taken important first steps towards creating more harmony in their messages and their goals. That said, most agree that there is always room for improvement.
Unraveling the Dynamics The very characteristics that define the biorefining industry are a big part of the reason so many trade organizations are necessary. &ldquo;Given that there are so many innovative technologies, and so many different types of advanced biofuels and biobased chemicals from distinct feedstocks, it&rsquo;s natural that there would be a variety of organizations representing different sectors,&rdquo; says Mary Rosenthal, executive director of the Algal Biomass Organization. &ldquo;Each technology and each feedstock&mdash;whether corn, vegetable oils, cellulosic materials, municipal solid waste, algae and so forth&mdash;has unique characteristics, challenges and opportunities that make multiple trade groups necessary.&rdquo; The fact that each biorefining sector has grown over a different timeline is also a factor. &ldquo;I think when you look at the biofuels industry, you have to look at it from a historical context,&rdquo; says Michael McAdams, president of the Advanced Biofuels Association. &ldquo;Ethanol was the only biofuel in the '80s and '90s.&rdquo; Organizations such as RFA developed during that time to support ethanol, so it makes sense that this is where their focus remains. Rather than seeing first-generation fuels as competition, it is important to note that those companies and their respective trade organizations are the ones who have laid the groundwork for advanced and cellulosic fuels. &ldquo;If you would not have the [RFA], I don&rsquo;t know that you would have had the ethanol policies that you have in this country right now,&rdquo; McAdams says. &ldquo;My hat is off to Bob Dinneen and the job RFA has done over the past 20 years to create a viable first-generation ethanol industry.&rdquo; However, when an existing statute base has been around for 25 years, there are some challenges when it comes to altering those statutes to accommodate new fuels and new technologies, McAdams continues. It is important to note that each trade organization is simply trying to advocate for what it thinks is best for its members. With 14 billion gallons of corn ethanol already in production, those in the second- and third-generation sectors often argue those resources should be redeployed to help support their development in the same way they were used to support the development of first-generation fuels in the past. Conversely, however, organizations serving first-generation interests want to see those incentives and resources continue to support their members, through either maintaining current policies or redeploying those resources to develop infrastructure. &ldquo;That is a natural tension,&rdquo; McAdams says. &ldquo;There is a natural tension that the biofuels industry has because they are competing with each other, and they are offering different products with different performance mechanisms. If I&rsquo;m making a drop-in molecule, I want help building my first-of-kind plant. If I&rsquo;m making a corn ethanol molecule, I want to grow my current market by establishing infrastructure. Those objectives don&rsquo;t necessarily align. It&rsquo;s problematic.&rdquo; Many of these tensions are a direct result of the mission-oriented disconnect between different components of the biorefining industry. &ldquo;Every organization has its own charter and its dues-paying members expect the organization to work on their behalf,&rdquo; Rosenthal says. &ldquo;I believe it&rsquo;s possible to not only support our members&rsquo; expectations, but collaborate with the biofuels ecosystem to achieve a favorable policy environment that benefits us all.&rdquo;
Unintended Consequences In truth, the vast majority of damage from those competing messages seems to be unintended. &ldquo;We&rsquo;ve said things without appreciating our brethren,&rdquo; McAdams says. &ldquo;We&rsquo;ve confused people, and much of it may have been unintended. Not out of malice, but just out of trying to do the right thing for the sector they know, and not understanding the impacts it had on the broader biofuels industry. Maybe we&rsquo;ve had the unintended effect of confusing people and pitting ourselves against each other when we need to come together.&rdquo; Growth Energy CEO Tom Buis notes that sometimes competing messages can be a good thing, as long as those messages don&rsquo;t confuse Congress and result in inaction. &ldquo;Differences of opinion are often helpful,&rdquo; he says. &ldquo;There are a lot of different voices out there, but I think people work together where they can. Where there are differences, we try to work those out for the best of the industry. When you have differences of opinion&mdash;of how you get somewhere, what the goal is, and different opinions on how you can get there&mdash;that can sometimes get very confusing to policy makers. That&rsquo;s why you have to just keep working hard to make sure that everyone has the same goal, and work out your differences on how you get there.&rdquo; The real challenge is getting people to actually work together to create concrete solutions. While competition is good in the marketplace, it&rsquo;s not always productive in the arena of policy. &ldquo;Convincing a large number of segmented and fractionated trade groups to agree and work together on issues is incredibility difficult,&rdquo; says National Biodiesel Board CEO Joe Jobe. &ldquo;However, that is precisely what is necessary in order to have policy and other successes with limited resources. The overall universe of biorefining products is relatively small, and mostly in emerging stages of development. Yet, those limited resources are scattered among dozens of disunited trade groups independently pursuing duplicative&mdash;or even contrasting&mdash;goals and messages. One of the natural tendencies is for individual groups to differentiate their products by publically touting its benefits compared to other specific bioproducts. The end result is that bioproducts trade groups often work against each other when they should be working together. While various technologies should complete in the markets on the merits and strength of individual precuts, it is essential that at this stage in our collective development, we pull together to face the enormous challenges before all of us.&rdquo; According to Brent Erickson, executive vice president of industry biotechnology at the Biotechnology Industry Organization, the multitude of voices in the biorefining arena is both a blessing and a curse. &ldquo;It&rsquo;s really a two-edged sword,&rdquo; he says. &ldquo;On the negative side, we sometimes have disparate voices with different points of view, and that&rsquo;s kind of confusing to Congress. On the positive side, we actually have more voices where we do have common policy goals, and a louder chorus calling for Congress to support those.&rdquo;
Creating Harmony The nature of competing goals is problematic for the industry, and a challenge that must be overcome, McAdams says. The process of developing new federal policy objectives can be murky, and compromise is the key. When it comes to policy, the first- and second-generation sectors of the industry are too often seen as working against each other. &ldquo;They are kind of at odds with each other, and we need to work together to be more harmonious to support our first-generation brethren&mdash;stand on the shoulders of our first-generation brethren and deliver the promise of a second-generation advanced and cellulosic industry. That is what really needs to happen here.&rdquo; The solution is simple, McAdams says. &ldquo;Not everybody gets what they want, and we sit down and try to have a holistic conversation where people become reasonable,&rdquo; he says. &ldquo;We protect the first-generation assets that have been built, which are key to national security and backing out foreign crude, and help realign the resources that are left to try to jump-start the future industry. But there has got to be give and take amongst these various trade organizations. They&rsquo;ve got to work together, not against each other.&rdquo; Erickson notes that the industry needs to adopt what he calls the &ldquo;Ronald Regan principle.&rdquo; &ldquo;Ronald Regan said no Republicans should speak ill of other Republicans, and I think in the biofuels space we would all adopt the rule that no biofuels company or association ought to speak ill of other biofuels technologies, fuels, molecules, or processes,&rdquo; he says. &ldquo;United we stand; divided we fall. We have enough external challenges and enemies, we don&rsquo;t need internal ones. I think we need to stay unified. I think when the economy turns down and resources become scarce, people tend to become hypercompetitive. I&rsquo;m not sure that&rsquo;s always positive. We need to be really careful about how we talk about each other&mdash;especially in public.&rdquo; Rosenthal agrees that those in the biorefining industry need to start seeing each other as allies rather than competition. &ldquo;We believe strongly that when it comes to advanced biofuels, a rising tide lifts all boats,&rdquo; she says. &ldquo;We believe that by partnering with other trade groups, we can better leverage our collective resources, educate policymakers and the public, and promote the industry. I think we all recognize that a unified front is needed to ensure success for the whole industry. Regardless of feedstock or technology, we must work together to help policymakers understand the benefits of domestic and renewable fuels. It&rsquo;s important that everyone understand that we are contributing to job creation and reducing our dependence on foreign oil.&rdquo; As the industry continues to mature, these objectives might come together in a natural way. &ldquo;Our overarching guiding principle is that we want to establish a biobased economy, and part of the way we have a biobased economy is to have biorefineries,&rdquo; Erickson says. &ldquo;We want to see the development of integrated biorefineries that are like oil refineries, where you take in agricultural feedstocks and make multiple products, not just fuels&mdash;fuels, chemicals and plastics. I would hope that all the biotech associations could rally around that concept, because that&rsquo;s the future. That&rsquo;s where we need to go, and that enables people to agree.&rdquo;
&nbsp; Author: Erin Voegele Associate Editor, Biorefining (701) 850-2551 <a href="mailto:evoegele@bbiinternational.com">evoegele@bbiinternational.com</a>

With eight trade groups, too many voices may prove to be a liability the industry can't afford

Searching for Unity

As air is necessary to breathing, capital is the lifeblood for early-to-middle stage biobased fuels and chemicals firms looking to accelerate commercialization efforts and introduce their novel products to the marketplace. But in order to achieve their goals, they&rsquo;ll need more capital in the form of cash to compete against petroleum giants that dominate the market today&mdash;a tall order. While traditional means of raising capital, such as private equity and venture capital, remain necessary sources for funding technological developments at the R&amp;D and pilot-scale levels, and for sustaining working capital expenditures, there is an equally effective financing alternative. A company can raise money by issuing either debt or equity. If the company has never issued equity to the public, the action is known as an initial public offering (IPO). The act of filing an IPO shouldn&rsquo;t viewed as a reflection of venture funds drying up completely, according to Andrew Soare, research associate for Lux Research. Rather, he says, an IPO is one of a few avenues biobased developers can take to obtain capital where several rounds of venture funds haven&rsquo;t been enough to achieve desired performance and results. &ldquo;After several rounds of venture funding, it&rsquo;s tough to justify more venture capital funding and you definitely need to turn to alternative methods,&rdquo; Soare says. &ldquo;One of those methods is through the public markets.&rdquo; Contrary to the dot com boom of the mid- to late-1990s, the biofuel industries have fallen short of achieving IPO success in recent years. In 2007, for example, Renewable Energy Group Inc., a biodiesel firm, cancelled its plans to raise $150 million, while Seattle-based Imperium Renewables set aside its ambitions for a $345 million IPO, in 2008. The IPO window may be widening in response to a rebounding economy, however. Today's investor seems to be more willing to evaluate each company on its merits rather than in creating a basket of everything in the sector, as in years past. &ldquo;Investors, especially IPO investors, are not looking for concepts or products that maybe won&rsquo;t be made available in the next three or four years,&rdquo; says Scott Sweet, managing partner for IPO Boutique, an IPO advisory firm based in Lutz, Fla. &ldquo;They&rsquo;re looking for top- and bottom-line growth with no debt. Emerging, yet promising [biofuel and biobased chemical companies] generally don&rsquo;t meet that criterion, so one has to have a very compelling story to bring a biorefining company public right now.&rdquo; Rather than taking their companies public on a &ldquo;one wave floats all&rdquo; mindset dictated by favorable market conditions, biorefining companies are taking a more strategic approach today before considering an IPO. &ldquo;Successful public companies have a good handle on the milestones they intend to achieve, and how those milestones combine to create value for investors,&rdquo; says Jeryl Hilleman, chief financial officer for Emeryville, Calif.-based Amyris Inc. In October, Amyris closed on its $84.8 million IPO, falling short of its $100 million target. The key behind Amyris&rsquo; compelling story is that it has successfully developed genetically engineered and screening technology that enables the company to modify how microorganisms process sugar through their metabolic pathways. By controlling the metabolic pathways, Amyris designs microbes to serve as living &ldquo;factories,&rdquo; or biorefineries, to produce target molecules such as farnesene from biomass. Amyris first developed and applied its novel technology to create microbial strains that produce artemisinin, an effective antimalarial therapeutic. &ldquo;Being able to articulate and then deliver on these milestones is important right from the start of being public,&rdquo; Hilleman explains. &ldquo;Companies should test themselves [to ensure] if they are ready to operate with these additional pressures and timeframes in order to achieve the benefits of being public.&rdquo; For firms that were successful filing and closing their IPOs, like Amyris, the decision was not easy. However, the move brings with it advantages developers can capitalize on. It&rsquo;s About Time In going public, the company gains the ability to tap into a broader network of investors and a larger pool of investment capital, with which it can raise more capital through additional stock offerings. It also increases investor exposure and the potential to attract and retain more highly qualified personnel. Depending on the financial standing of a company and how aggressive its commercialization efforts are, the time may not be right for some, Soare says. &ldquo;This financing act isn&rsquo;t the last step for these companies,&rdquo; Soare says. &ldquo;They&rsquo;re still far away from profitability, but it will help them gain credibility in the marketplace.&rdquo; For Amyris, its IPO gave it the attention it needed to access a broader customer base that it might not otherwise have had when it was a private entity, according to Hilleman. &ldquo;Our customers are looking for long-term suppliers and conduct extensive due diligence on us as a company,&rdquo; she says. &ldquo;By becoming a public entity, we&rsquo;re more visible to our customers on an ongoing basis, operating under the controls and governance they would expect from a supplier of key ingredients. Thus, our decision to go public was heavily influenced by our customers.&rdquo; Filing its IPO was a key driver behind Amyris&rsquo; solidifying existing manufacturing contracts while creating new ones as it works to commercialize biobased farnesene. In November, Amyris signed a manufacturing contract agreement with global agribusiness firm Tate &amp; Lyle to produce biofarnesene at Tate &amp; Lyle&rsquo;s bulk ingredients operations in Decatur, Ill. Prior to that, the company entered into a similar agreement with a facility of Biomin GmBH in Piracicaba, Brazil. Amyris is using contract manufacturing capacity to produce farnesene at commercial scale to supply customer demand in advance of the start-up of its first commercial plant under the joint venture with Grupo Sao Martinho. The company said it expects to begin production of biobased farnesene at the Biomin facility in the first half of 2011. Amyris also has a partnership with global flavors and fragrance company Firmenich S.A. to develop a cost-effective and reliable source of a key ingredient used in the fragrances and flavors market. Oil conglomerates Royal Dutch Shell and Total have invested in Amyris and are betting on the company&rsquo;s technological efforts to thrive in the biorefining sector. According to Hilleman, Amyris doesn&rsquo;t intend to become more aggressive than it already had been with its commercialization strategy of biobased farnesene, on either domestic or international fronts. &ldquo;We expect to continue the same intense commercialization process that we started well before the IPO,&rdquo; Hilleman says. &ldquo;In fact, we believe that the fast pace and intensity we&rsquo;ve brought to this process throughout our history is a big part of why we&rsquo;re able to go public, having demonstrated execution over time of technical, business, production and scale-up advances.&rdquo; Looking Ahead Among other companies that joined Amyris in the IPO foray were California-based biocatalyst developer Codexis, which closed on its IPO value of $78 million in April, below its $100 million target. Prior to its successful IPO, Codexis originally filed with financial regulators to go public in April 2008, but withdrew the filing by fall of that same year. Other biorefining companies in the IPO pipeline are Gevo Inc. and PetroAlgae Inc., which both filed for IPOs in August. Gevo targeted a value of $150 million while PetroAlgae targeted $200 million. At press time, both were pending the close of value for their respective IPOs. Although advanced biofuel and biobased chemical companies both face risks and opportunity, the renewable energy IPO market is considered less than ideal by many investors. But, according to latest data released by Lux Research in October, global biofuel capacity is forecasted to grow 7.8 percent annually to 53 billion gallons by 2015, while biomaterials are on pace to grow at a 17.7 percent per year clip to reach 8.1 million tons. &ldquo;I see a small amount of IPO filings in 2011, but only those that are highly venture backed by the best names,&rdquo; Sweet says. &ldquo;We&rsquo;ve done far more IPOs already in 2010 than in 2008 and 2009 combined by far. I envision the IPO market to be strong in 2011.&rdquo; Author: Bryan Sims Associate Editor, Biorefining (701) 738-4974 <a href="mailto:bsims@bbiinternational.com">bsims@bbiinternational.com</a>

Taking a company public may be a viable finance vehicle for some, but not all

Stepping Into the Public Light

Proterro Inc. doesn&rsquo;t have any issues with office furniture or parking spots. In fact, the promising startup, which is developing a fermentation-ready sugar for biofuels, is a virtual company that doesn&rsquo;t even have employees, or at least, not the kind of employees one might think an advanced biofuel up-and-comer would have. CoolPlanetBiofuels, another potential advanced biofuels winner, does have employees&mdash;and they&rsquo;re good. Mike Cheiky, president of the Camarillo, Calif.-based company, has received the World Economic Forum Technology Pioneer for the Energy and Environment award twice and has been issued 40 patents, with several more on the way. Both companies have arrived at the same place, however: they're on the cusp of breaking out as the latest, greatest, unknown technology providers that could change the future of biofuel production. Here&rsquo;s how they did it, and why each company&rsquo;s growth path, although very different, shows that the winner&rsquo;s platform for advanced biofuel players is large enough for several to stand on. A Sweet Story Surprisingly, the Proterro story is not a unique one, according to Kef Kasdin, general partner for Battelle Ventures and CEO of Proterro. &ldquo;This virtual company model is one that we have adopted in several cases in our portfolio,&rdquo; Kasdin says. Currently, the company has a CEO, a CTO and a vice president of development, all of them employed as consultants by Proterro. Admittedly, Kasdin wears two hats, currently acting as the CEO while continuing to fulfill her duties for Battelle Ventures&rsquo; early stage capital venture fund, the same fund that helped Proterro get off the ground. Battelle Ventures, an independent $220 million fund whose sole limited partner is Battelle Memorial Institute (Battelle), and Braemar Energy Ventures together provided Proterro with $5 million in seed financing, which, as Kasdin explains, the funding was granted more on what Proterro didn&rsquo;t have rather than what it did. &ldquo;One of the innovations that we came up with at Battelle Ventures,&rdquo; she says, &ldquo;was that if we identify a platform at the laboratories, it was probably a better course to think about this virtual company route to meet certain milestones in terms of the company&rsquo;s&nbsp; commercialization development, before starting to add a lot of internal resources.&rdquo; The key to the virtual concept, as Kasdin says, is to minimize the costs related to building up management teams, leasing office space, lab space and new equipment. &ldquo;The other part,&rdquo; she says, &ldquo;is that taking these early-stage technology developments to commercialization are a very risky process. Some just don&rsquo;t work out.&rdquo; Two Worlds Instead of sacrificing capital on lab equipment or office supplies, Battelle Ventures has found a way to leverage its resources and make a company such as Proterro possible. Battelle manages six of the U.S. DOE&rsquo;s national laboratories, and Kasdin says the virtual approach used at Proterro has taken advantage of that relationship. In 2006, Kasdin began looking for an answer to many of the biofuel dilemmas of today regarding feedstock, transport and process methods. After examining the entire landscape, including what other VCs and the U.S. DOE were investing in, she put together a presentation to take to all of the labs managed by Battelle. After linking up with Proterro&rsquo;s current CTO John Aikens in an effort to evaluate the latest technology at the labs, Kasdin and Aikens eventually arrived at the same conclusion. The answer they were looking for, however, was not in any of the labs. Their idea, and the foundation of Proterro&rsquo;s technology, was to create a feedstock that could cut out the growing, harvesting and transport issues seen today by other energy crops.
&ldquo;What if there was a way to circumvent all that,&rdquo; Kasdin says the two contemplated, &ldquo;and just go from sunlight, carbon dioxide and water, directly to simple sugar.&rdquo; Apparently there was a way, but to develop the idea into a reality, Kasdin had to utilize Battelle Ventures&rsquo; experience with the virtual model. &nbsp; &ldquo;We leveraged other people&rsquo;s capital at other labs to actually demonstrate the viability of the technology,&rdquo; she says, by subcontracting certain Proterro-based work out to engineers and scientists already working at a lab. &ldquo;It&rsquo;s like sponsored research,&rdquo; she explains. &ldquo;We are paying them to do our project as part of their responsibilities.&rdquo; The nice part about the whole approach, according to Kasdin, is the help you get at the lab. &ldquo;You can get some very high level, senior, brilliant scientist and engineers&rdquo; who have access to &ldquo;wonderful capital investment that, typically, the government has already paid for.&rdquo; Proterro pays for the access, but does it in a way that is much more capital efficient than recreating all those tools needed in small startups. Now, as Proterro stands on the brink of exiting the virtual model, Kasdin explains the next step to making it all work. In a typical model, the first CEO will act more as a project manager, but eventually, as Kasdin predicts will happen for her role, the first CEO will be replaced by another, better-suited business person. Proterro will eventually get to a point where someone who has business connections in the biofuels and biobased chemical world is needed, she says. &ldquo;We are going to reach a point at Proterro when we would benefit from having somebody that comes out of the biofuels industry.&rdquo; A Perfect Partner If the Proterro approach to building a startup to become a prominent force in the biofuels industry represents the virtual or nontraditional method, CoolPlanet Biofuels is the exact opposite. The company, which is developing a thermal processor to convert biomass into multiple gas streams for catalytic upgrading to conventional fuel components, all of which can be integrated into a transportable modular shipping container each producing roughly 1 MMgy, is already backed by North Bridge Venture Partners, and recently partnered with GE Energy Financial Services as well. While Kasdin touts Proterro&rsquo;s approach, there&rsquo;s no doubt that Ricardo Angel, senior vice president of GE Energy Financial Services, is sold on the CoolPlanet process to the degree, in fact, that he has earmarked the startup as an investment. &ldquo;If and when the company needs more capital,&rdquo; he says, &ldquo;we will put more capital in there.&rdquo; And there's more to winning Angel's confidence than backing. Angel says, &ldquo;From our end, we always like to think that we are a group that is different than other VC groups. We add value and we do add capital like others do, but in addition to that, we can leverage the GE platform overall.&rdquo; GE boasts nearly 3,000 PhD&rsquo;s, experts and research facilities to leverage, all together with &ldquo;a lot of money,&rdquo; according to Angel. As the company evolves, Angel says, GE understands very well what it takes to scale up the process of commercialization, and, what it takes to integrate different systems. GE Energy Financial Services, one of five arms of GE, can add different forms of capital to CoolPlanet through credit finance, project finance or through working capital, Angel says. &ldquo;Not too many people can bring that to these types of companies.&rdquo; The joint venture between CoolPlanetBiofuels and Angel&rsquo;s GE team may sound like a perfect match for CoolPlanet, but as the numbers Angel presents show, working with a team like GE&rsquo;s might be difficult. &ldquo;Over time our group probably looks at more than 1,000 companies or businesses a year,&rdquo; he says, &ldquo;and out of that, we usually do good work with probably 30 companies, and each year we probably invest in around six companies.&rdquo; So, if a company is looking for additional funding, is the best path the one that leads to a perfect partner like GE Energy Financial Services, or is it the one that ends up with a virtual approach championed by Battelle Ventures? Angel says his team invests in tech-based companies that have breakthrough potential in a large market. As for Kasdin, the virtual approach is well-suited for taking certain nascent technologies out of the lab. To determine the right investments, Angel says they look at all the components of a company as a whole, and one particular variable will not typically set a company apart. &ldquo;It&rsquo;s not a simple equation where you have 20 percent for management, 20 percent for technology, or 20 percent for market&rdquo; to determine the value of a company, he says. In the end, GE usually invests $2 million to $5 million per project, and prefers to come in on the second round of funding. Investing in a series A round has happened before, he says, but it&rsquo;s more of an anomaly. Fortunately, even if the two companies&rsquo; growth plans are different, one going bare bones just to get out of the lab, the other utilizing the vast resources of a major energy company, there is one similarity between both, and it has to do with winning. The phrase has been used before but it bears repeating. Both Kasdin and Angel stressed one idea: that in the advanced biofuels spectrum, there is room for multiple winners. &ldquo;We would be happy to invest in a few additional players,&rdquo; Angel says. Kasdin adds that &ldquo;there is huge market potential&rdquo; for new processes. Regardless of the model used to get from potential to reality, however, Angel says this about the current state of the industry, &ldquo;We are seeing a good amount of opportunities right now. I think this is the right environment to invest.&rdquo; Author: Luke Geiver Associate Editor, Biorefining (701) 738-4944 <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a>

There's more than one way to grow a company, and in the end there can be more than one winner  

Breakout Potential

The huge news at press time is the signing into law of the big $850-plus billion tax bill that included the retroactive reinstatement of the biodiesel and renewable diesel blender credits, as well as the extension of the volumetric ethanol excise tax credit; not to mention extension of the investment tax credit, section 1603, and the alternative fuels mixture credit. For those who have been living under a rock for the past year, the biodiesel and renewable diesel tax credits expired at the end of 2009 and went through brutal ups and downs throughout the past year in anticipation of renewal. The lapse had devastating effects on the U.S. biodiesel industry, and, less quantifiably so, may have also depressed domestic renewable diesel project development. Earlier this year, the U.S. ethanol industry began to question whether its credit would suffer the same fate as the renewable and biodiesel credits did, and all of the hardship that came with it. Interestingly, the biodiesel industry, which has been proudly displaying its designation as the first commercially available advanced biofuel in America (per U.S. EPA&rsquo;s calculation of lifecycle reduction of greenhouse gas emissions compared to baseline petroleum diesel), began to adapt to a world without a tax credit&mdash;one can argue that the biodiesel industry has been forever changed as a result of its experiences in 2010&mdash;as biomass-based diesel renewable identification number (RIN) prices soared in recent weeks to 80-plus cents a credit. With each gallon of biomass-based diesel producing 1.5 RINs, this comes out to $1.20 per gallon, a fifth more than the $1 per gallon tax credit. Producers registered under EPA&rsquo;s RFS2 program were taking advantage of this, and plants were beginning to manufacture fuel again. The downside to RINs, however, is the once-a-year reporting period, causing volatility in the RIN market place: prices spike as obligated parties scramble to meet their obligations by the end of the year, after which prices can dip dramatically. The retroactive nature of the biodiesel and renewable diesel tax credits will provide a cash injection to the industry, specifically for those who held on to the hope that the credit would come back and continued blending biodiesel, and the surety of the credit through 2011 will surely be positive. But the trade associations, such as the Advanced Biofuels Association and the National Biodiesel Board, will have their work cut out for them in 2011 as they push for multiyear extensions to bring investor confidence back into their respective sectors.

Reinstated

The new year is likely to bring an event that Washington hasn&rsquo;t seen in a very long time. A president trying to get back on his feet after a sizeable mid-term electoral defeat, while trying to maneuver a legislative and political landscape made increasingly complex not only by the newly empowered Republicans, but also factions from within his own party. It&rsquo;s likely to play out much like an old-fashioned shotgun wedding with a future father in-law ready to call out any missteps by an anxious groom. The nuptials began with a tenuous legislative dance last month when, on Dec. 15, the Senate, by a vote of 81 to 19, approved President Obama&rsquo;s compromise tax package. The following day, despite three months of rancorous positioning, the House of Representatives agreed to the Senate bill by a vote of 277 to 148. For the biofuels industry this was a long time coming. It has been more than two years of waiting that has resulted in job losses among our companies, so this was the best news of the holiday for those who might now be able to go back to work building better fuels.&nbsp; The final bill, which the president quickly signed into law following the late night vote in the House, renewed the existing biofuels tax credits. Specifically for the ethanol industry, Congress renewed the current ethanol tax credit at 45 cents per gallon despite a highly contentious and political fight waged by a significant opposition. But the credit was simply extended until Dec. 31. The bill also extended the ethanol tariff for an additional year and left the current 54-cent tariff rate in place.&nbsp; As for the biodiesel and renewable diesel industries, the bill retroactively extended the biodiesel and biomass-based diesel credits from Jan. 1, 2010, until Dec. 31, 2011. The same treatment was afforded the alternative fuels mixture credit. Additional effort to give algae producers parity with cellulosic producers, by adding them to the definitions of the cellulosic production tax credit, simply ran out of time and encountered resistance to any new provisions being placed in the package. The algae industry and others made a significant and worthy effort to position this issue as one of the priority amendments to be considered when the new Congress goes to work. The tax package provides our industry much needed and long awaited economic encouragement, but there is much work to be done in the new year. At the end of the year-long push, the combination of biofuels associations and individual companies were unable to convince the Congress to add biofuels under coverage of the Investment Tax Credit, section 1603. In fact, the president&rsquo;s original compromise with the Republican leadership struck the provision from continuation. This was largely the result of the Republicans&rsquo; focus on repealing new provisions which had been authorized under the American Recovery Act. Once the bill was released to Capitol Hill, lawmakers of both parties reviewed the effectiveness of the 1603 provision and were compelled to extend the refundable credit for an additional year. Our industry&rsquo;s efforts to add a new component fell short, however, due to concerns over additional added cost and simply time. In somewhat of a surprise, the Senate Appropriations Committee attempted to cut back the Biomass Crop Assistance Program at USDA, a move that was withdrawn at the last hour. At press time, a continuing resolution was being considered that would fund the government at current levels, including the BCAP program at 2010 levels. Our industry&rsquo;s enhanced efforts to work more closely together over the past six months must continue, with an even clearer focus on how to sustain current first-generation fuels while building the necessary public policy to expedite the deployment of the second generation advanced biofuels. We will return to a new Congress in 2011 with a quarter of the entire House being freshman members. This will require an extensive and compelling education effort on behalf of the biofuels industry. The political fights that we witnessed over the past six months on tax policy will not go away. They will be renewed afresh and a new policy discussion will begin.&nbsp; The biofuels industry will need to be ready to engage as a collective force once again, as we will be faced with the last year of the tax provisions, again. Perhaps our New Year&rsquo;s Resolution as an industry should be to develop a comprehensive game plan that reflects a reasonable set of requests from all of us associated with the biofuels industry. A toast to the new year from the nation&rsquo;s capital. Author: Michael McAdams President, Advanced Biofuels Association (202) 747-0518 <a href="mailto:mmcadams@bhfs.com">mmcadams@bhfs.com</a>

Celebrating the long-awaited passing of U.S. biofuels tax credits

Washington's Shotgun Wedding

5/2 Get ready, Show Me State, for the largest, most intense biomass conference of the year because the 4th annual International Biomass Conference &amp; Expo is coming to the America&rsquo;s Center May 2-5, in St. Louis. This dynamic event unites industry professionals from all sectors of the world&rsquo;s interconnected biomass utilization industries: biobased power, thermal energy, fuels and chemicals. Organized by BBI International and coproduced by Biomass Power &amp; Thermal and Biorefining magazines, the conference brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It&rsquo;s a true one-stop shop&mdash;the world&rsquo;s premier educational and networking junction for all biomass industries. The event is where future and existing producers of biobased power, fuels and thermal energy products go to network with waste generators and other industry suppliers and technology providers. It&rsquo;s where project developers converse with utility executives; where researchers and technology developers rub elbows with venture capitalists; and where Fortune 500 executives and influential policy makers sit side-by-side with American farmers and foresters. The largest, fastest-growing event of its kind, the 2011 show is expected to draw nearly 2,500 attendees. In 2010, 1,700 attendees registered, bettering 2009&rsquo;s attendance by 80 percent and doubling the attendance of the inaugural show. This growth is fueled by a world-class Expo and an acclaimed program. The 2011 program will include 30-plus panels and more than 100 speakers, including 90 technical presentations on topics ranging from anaerobic digestion and gasification to pyrolysis and combined heat and power, all within the structured framework of six customized tracks: Crop Residues; Dedicated Energy Crops; Forest &amp; Wood Processing Residues; Livestock and Poultry Wastes; MSW, Urban Wastes &amp; Landfill Gas; and Food Processing Residues. The conference will help biomass industry stakeholders identify and evaluate technical and economic solutions that fit their operation. It&rsquo;s time to tap into the revenue generating potential of sustainable biomass resources. Get started today by registering for the 2011 International Biomass Conference &amp; Expo at www.biomassconference.com.

Show Me the World's Largest Biomass Event

Biobased fuel and chemical firms are gaining increased public and scientific attention, driven by factors such as oil price spikes, the need for increased energy security and concern over greenhouse gas emissions from fossil fuels. As popularity increases, so does the demand for biofuel- and chemical-based products. As such, many firms are interested in circulating their products throughout the marketplace. As always, the tax implications of any business decision must be considered. Several strategies exist to make taxes and the cost of starting a company manageable and less expensive for these firms, and all small businesses. No doubt the number of startup biofuel and chemical firms will rise as a result of the industry&rsquo;s growing popularity. The Small Business Jobs Act, enacted by President Obama in 2010, helps these businesses in several ways. The startup expense deduction allows taxpayers to deduct up to $5,000 in qualified trade or business startup expenses. Startup expenses are defined as costs related to creating an active trade or business, or investigating the creation or acquisition of an active trade or business. For those businesses already established, the act contains an S Corporation Built-in Gain Period. A C corporation that converts to an S corporation, usually for tax purposes, now must hold appreciated assets for five years, rather than the previously existing 10 years, to avoid the tax on the appreciation at the highest tax rate (35 percent). Shortening the hold period by five years will help S corporations save on taxes for appreciated assets. In terms of tax strategies, businesses should first find a tax-friendly business structure. The first step in reducing tax liability is to make sure that your business is structured as a tax-friendly entity. Some forms of business entities require that the business pay taxes on the money it earns throughout the year and that the business owner pay taxes on the income he or she receives. This results in a double taxation scheme that costs the business twice. Most types of business entities, however, do not have to pay double taxes, and any tax owed is paid by the owner who receives the income. When structuring your business then, make sure you choose a form of business that will avoid double taxation and help you meet your tax saving goals.&nbsp; &nbsp;&nbsp;&nbsp; Next, become an excellent bookkeeper and learn your deductions. Whether or not you have an accountant or a bookkeeper, maintaining extremely accurate records and learning the potential business deductions is key to paying lower taxes and avoiding a tax audit. Hiring an accountant to manage your taxes is a great idea and helps itemize expenses into the most tax efficient filing. There are many deductions for small business owners that the average entrepreneur may not even know about. This is especially true within the biofuel and chemical industries as the American Recovery Act amends several provisions of the U.S. Tax Code, expanding or providing new renewable energy incentives for businesses and utilities that produce or utilize renewable energy. These incentives generally take the form of tax credits for the production of electricity from and facilities that utilize wind, refined coal, geothermal, biomass, solar, and combined heat and power systems. Learn the list of deductions and, after that, write everything down. The combination of knowing what deductions are allowable and meticulous record keeping will make tax returns easier to manage. Finally, make sure your taxes are done properly and on time. If for some reason you can&rsquo;t have your taxes done by the deadline, filing an extension as soon as possible, and before the deadline, avoids any potential problems with the IRS. Making estimated tax payments too will reduce the burden when it comes time to pay the whole bill and will help guarantee that when that day comes, you will have the money available. If after all of your preparation, you don&rsquo;t have money to pay your taxes, the IRS offers a variety of programs to help you out, including payment and settlement plans. The recent enactment of tax incentives for alternative energy means potential for the biofuel and chemical industry. Firms seeking to circulate their products throughout the marketplace should consider creating a tax strategy in order to avoid unnecessary expenses so they can focus on maximizing profit and efficiency, thus resulting in success for their business. Author: Deborah Sweeney CEO, MyCorporation Business Services Inc. (818) 224-7642 <a href="mailto:dsweeney@mycorporation.com">dsweeney@mycorporation.com</a>

Helpful hints for business growth in the bioenergy sectors

Tax Strategies for  Biorefining Startups

Roswell, N.M., may be better known for the alleged crash-landing of extraterrestrial spacecraft in 1947, but the town will soon become a new haven for algal research when California-based OriginOil Inc. and Sustainable Resources Inc. jointly deploy an Advanced Algae Center devoted exclusively to algae commercialization. The planned center was once the headquarters for the U.S. DOE&rsquo;s Aquatic Species Program from 1978 to 1996. Once deployed by mid-year, the center will provide algae researchers, engineers and producers a uniquely secure and unbiased environment to test their technologies and processes on a wide variety of algae species before commercial deployment, according to Origin Oil CEO Riggs Eckelberry.&nbsp; &ldquo;We need to have a place where everyone can experiment without having to give up intellectual property,&rdquo; Eckelberry says. &ldquo;All too often, many consortium deals favor the operators who have no IP and the technology companies are left short.&rdquo; With its abundant sunshine and low production costs, the location offers an ideal setting for algae growth, according to Eckelberry. &ldquo;If we can attract people in sort of a magnet site to grow the algae, harvest it and then convert it into fuels, feed and fiber products, then people would have a place to showcase what they have,&rdquo; he says. &ldquo;I think it will put Roswell back on the map this way.&rdquo;&nbsp;&nbsp; &mdash;Bryan Sims

Why all roads in algae R&D may converge in New Mexico—again

Alien Visitors?

A luncheon is never just a luncheon when the U.S. DOE Secretary Steven Chu shows up, especially when he delivers a speech on energy. During a recent National Press Club event, Chu gave a presentation titled, &ldquo;The Energy Race: Our New Sputnik Moment,&rdquo; and while he spoke on the growing superpower of China and the idea that innovation is the key to prosperity and progress, he also commented on what he believes is the most ideal transport fuel, adding that &ldquo;this is a complicated economic issue.&rdquo; For Chu, corn ethanol was a good way of getting the American public to realize driving a vehicle on ag-based fuels is possible, but that we need to focus on developing the new technology that can supersede ethanol made from starches. &ldquo;Ethanol is not an ideal transportation fuel. Gasoline, jet fuel, kerosene and diesel fuel are much better things to use,&rdquo; he said, &ldquo;because they don&rsquo;t require changing the infrastructure.&rdquo; Now, Chu says, we need to focus on producing biofuels that can be directly substituted into any ratio or gas tank. &ldquo;Wealth creation is created by innovation,&rdquo; he said during the speech, pointing to three new bioenergy research centers that are working to create a process for drop-in fuels. The hope, he said, is that the U.S. can recognize the economic opportunity in energy, and continue to pump in investments towards research and development.&nbsp;&nbsp;&nbsp;
&mdash;Luke Geiver

Secretary Chu on China, energy and the ideal transport fuel

The Energy Expert Speaks

While other biorefining firms may be chasing the biofuels market, Toronto, Ontario-based Vertichem is aggressively pursuing the specialty chemicals market. To help forge its commercialization efforts, the company formed a 50/50 joint venture with the Warner Babcock Institute in Boston to investigate new applications for its lignin and xylose-based specialty chemicals derived from woody biomass. According to Mike Smith, vice president of communications for Vertichem, the company intends to focus on the robust lignin market, which it estimates has a nearly $70 billion market potential. Vertichem&rsquo;s lignin could a viable alternative to petroleum-derived PVC pipe and fillers, adhesives and polyurethanes. &ldquo;We hope to [pull 50 percent] of our income stream from that $64 billion market,&rdquo; Smith says. Similarly, Vertichem expects 32 percent of its revenue to come from a $1.5 billion market for xylose, which can be used in personal care products like toothpaste or food additives. Although Vertichem is also capable of producing a cellulosic pulp and paper material from its proprietary process, which can be further converted into biobased solvents or cellulosic ethanol, Smith says Vertichem will focus its R&amp;D efforts on penetrating the lignin and xylose markets first before it gets heavily involved in the biofuels space. &ldquo;We&rsquo;re looking to partner on a collaborative basis with major chemical companies like Dow Chemical or BASF,&rdquo; Smith says, adding that global consumer products manufacturers like Proctor &amp; Gamble have already expressed interest in Vertichem&rsquo;s potential. Prior to its joint venture with the Warner Babcock Institute, Vertichem received a $3 million equity investment to help launch the company and commenced on a $25 million equity drive with additional funding rounds expected to come, Smith says. As part of its commercialization efforts, Vertichem has identified a site near Vicksburg, Miss., for a planned biorefinery that will have an estimated production output volume of 2.5 tons per day. The company has already secured feedstock arrangements with a large sawmill in the U.S., which holds about 3.4 million acres of forest land and produces approximately 250 dry tons of hardwood waste per day. Vertichem looks to get 1 percent of that volume to feed its planned biorefinery, which is expected to break ground sometime in mid- to late 2011, with product sales projected to come out by late 2012 or early 2013, according to Smith. &ldquo;At that point, in 2013, you can start banging out two or three more of these commercial biorefineries because the company will be generating significant revenue by then,&rdquo; he says.&nbsp;&nbsp;
&mdash;Bryan Sims

Vertichem eyes the multibillion dollar specialty chemicals market

On The Straight And Narrow

It all started when a project director from the U.S. Defense Advanced Research Projects Agency approached Richard Gross and challenged his jointly owned company, SyntheZyme, to develop a bioplastic that could be degraded back to a liquid fuel. Consequently, the professor of chemical and biological science of Polytechnic Institute at New York University successfully developed a method for producing a biodegradable bioplastic using yeast that feed on plant-based lipids such as those from palm oil. Specifically, Gross employs a biocatalytic fermentation route that uses a genetically modified strain of Candida tropicalis that, when fed on plant-based fatty acids, is capable of producing large quantities of monomers called omega-hydroxyfatty acids. When the omega-hydroxyfatty acid monomers are strung together in long repeating units, they form a polymeric bioplastic material that could be used as a viable substitute for petroleum-based polyethylene. His findings were published in the Journal of the American Chemical Society. &ldquo;I wanted to be able to break the plastic back down to molecules that look a lot like biodiesel,&rdquo; Gross tells Biorefining. &ldquo;I knew I had to redesign the fatty acid so that it has another functional group on the other side of the molecule so I could make polymers from it.&rdquo; With help from two DARPA funding cycles totaling approximately $4 million, Gross was able to focus much of his work on identifying an ideal yeast strain. &ldquo;Engineering the organism involved removing 16 enzymes; essentially moving 16 gene fragments from the yeast to finally get to the yeast that can make a monomer,&rdquo; Gross says. &ldquo;We got really good yields and have demonstrated the potential to develop a low-cost process from a carbon source like palm oil.&rdquo; According to Gross, the biocatalytic fermentation pathway is capable of producing approximately 112 grams-per-liter of omega-hydroxyfatty acid from plant-based fatty acid. &ldquo;That&rsquo;s about two grams per liter per hour,&rdquo; Gross says, adding that production run rates are being improved to increase the desired yield of omega-hydroxyfatty acids. &ldquo;The fermentation takes about 55 hours, but we&rsquo;re looking to bring that down to 40 hours or so and improve the productivity a bit,&rdquo; he says. &ldquo;They&rsquo;re close to commercially acceptable numbers.&rdquo; Traditionally, omega-hydroxyfatty acids are produced via a difficult and expensive petrochemical pathway that leads to a high-cost product. &ldquo;People have been using these to make fairly long chain hydroxyl acids that can be cyclized to make the musk in fragrances,&rdquo; he says. Gross says samples of its omega-hydroxyfatty acid were sent to some of the prominent specialty chemical manufacturers in the market. So far, the interest is overwhelming. &ldquo;They&rsquo;ve assessed our product and they like what they&rsquo;re seeing,&rdquo; Gross says, adding that he envisions SyntheZyme deploying a pilot plant within the next three or four years capable of producing 30 million tons annually of omega-hydroxyfatty acid materal. &ldquo;We&rsquo;re discussing possible collaborations to bring our product to market.&rdquo; As it turns out, the challenge initiated by DARPA was originally intended to serve a dual purpose: to produce a bioplastic, and biodiesel for military engines after it&rsquo;s depolymerized to omega-hydroxfatty acid monomer units. With the successful production of polymerizing omega-hydroxyfatty acids to form bioplastic now complete, research is underway to convert the bioplastic into biodiesel, according to Gross.&nbsp; In addition to producing bioplastics based on its biocatalytic fermentation technology, SyntheZyme is also capable of producing a suite of bioproducts for applications in fragrances, vinyl monomers, biosurfactants and biopesticides. The company is backed by 16 granted and pending patents.&nbsp;
&mdash;Bryan Sims

How plant-based lipids are creating more value-added bioproducts

Stemming From Biocatalytic Roots

The number of products made from a barrel of crude oil today is almost infinite. Someday, we&rsquo;ll say the same thing about the number of products made from an energy crop like miscanthus or willow. But, for that to happen, we need to remember those early days of crude oil discovery to understand the true potential of energy crop utilization, says Barry Caslin, bioenergy specialist for Irish-based Teagasc, a semi-state organization that focuses on agriculture and food development.&nbsp; &ldquo;If we talked about a barrel of oil in the context of when crude oil was discovered, the first thing that was produced from crude oil was kerosene,&rdquo; Caslin explains. &ldquo;Kerosene was the easiest thing to distill off. The majority of the rest was just thrown away,&rdquo; he says. &ldquo;Today, you would think that as a ludicrous and wasteful way to carry on.&rdquo; It&rsquo;s that same waste-not mindset taken with a barrel of crude today that Caslin says could be used to transform the need and use of energy crops for tomorrow. &ldquo;I would like people to think about the current organic chain in the same way,&rdquo; he says, &ldquo;bearing in mind we are at the beginning and just taking the fuel out of that chain doesn&rsquo;t seem a very sensible way forward.&rdquo; In addition to biofuels, Caslin says, &ldquo;we are going to have to take out the energy component for power generation and take out platform chemicals.&rdquo; While the idea that an energy crop could, and should, have multiple uses isn&rsquo;t new, Caslin and his team from Teagasc are making sure others get the point. During an energy crop demonstration day, local farmers and other delegates met to discuss market possibilities, followed by a harvesting demonstration that featured a Biobaler. &ldquo;In a single pass the Biobaler cuts and compacts biomass into a dense, round bale,&rdquo; Caslin says of the machine. &ldquo;Live practical demonstrations always go down well with farmers,&rdquo; he says. Caslin says it is difficult to see where our energy crop developments will be in 30 to 40 years and that farmers will play a large role in the development of sustainable products made via energy crops. For those who aren&rsquo;t completely sold on that potential, more events like Teagasc&rsquo;s are a good thing, but remembering the history of crude oil use (or nonuse, in this case) might be even better at predicting just how much potential there really is.&nbsp;&nbsp;
&mdash;Luke Geiver

Energy crop demonstrations help, but a look into the past says it all

A Crude Lesson in Oil History

Fulcrum BioEnergy Inc.&rsquo;s Sierra BioFuels Plant project has been selected by the U.S. DOE to enter the final stage of the department&rsquo;s loan guarantee program. According to Fulcrum, the company has received a detailed indicative term sheet from DOE and has begun the negotiation process to advance the loan towards closure and funding. &ldquo;We recognize that until the loan is closed, there is no assurance that a loan guarantee will actually be issued,&rdquo; says Fulcrum President and CEO E. James Macias. &ldquo;However, as we move ahead and negotiate terms of the loan with DOE, and it continues its technical, commercial and financial due diligence through the closing of the loan guarantee, we are optimistic that a conditional commitment and loan guarantee will be issued.&rdquo; The Sierra BioFuels Plant will be located near Reno, Nev. Using post-sorted municipal solid waste as feedstock, the plant is expected to produce 10.5 MMgy of cellulosic ethanol and 16 megawatts of renewable electricity. Construction is scheduled to begin immediately following the award of a loan guarantee, with completion targeted for 2012. Fulcrum estimates the project will create 53 full-time and more than 450 temporary jobs. &ldquo;With equity capital in place, the DOE loan guarantee represents a vital financing tool to allow our $120 million project to move forward, opening the door to an exciting new industry,&rdquo; Macias says.
&mdash;Erin Voegele

With no shortage of loan program criticism, at least one project is greenlighted 

Fulcrum Pushes Ahead

Another annual biodiesel conference has come and gone, and it was great to see so many of you in Phoenix.
 From the Super Bowl party and the concert afterwards&mdash;where musician Emily Richards jammed out on vocals and keyboard, Joe Jobe played harmonica and Manning Feraci finessed the guitar&mdash;to the general and breakout sessions, lunch and receptions in the expo hall, offsite dinners and meetings, hallway talk and booth conversation, it was, as usual, a good and productive show. There is no replacement for the one-on-one time that an event like the National Biodiesel Conference &amp; Expo can offer.
 Conversations I had with producers and industry stakeholders had some common elements. Despite the National Biodiesel Board being thrilled about the 11th hour retroactive extension of the dollar tax credit, several producers and industry players I spoke with expressed serious concern over the uncertainty in the marketplace it is creating, especially without the assurance of any long-term policy commitment. One producer told me he thought the retroactive reinstatement was like one last chance: &ldquo;Here you go, enjoy it and use it wisely because it&rsquo;s not going to happen again,&rdquo; he said. Maybe that&rsquo;s true. Many said to me that rather than focusing lobby efforts on a subsidy for which getting any extension longer than a year in this political climate is highly unlikely, the real opportunity lies in expanding the federal biomass-based diesel carve-out well beyond the 1 billion gallon mark by 2012. At the very least, it should be doubled&mdash;immediately.
 NBB board members discussed the push for 5 percent by 2015. That is certainly an avenue worth pursuing. People were telling me the only ones who profit from the dollar credit are the oil companies required to blend the fuel. And as soon as the credit is in play, feedstock prices track right along with it. But with a healthy mandate in place, and market certainty created by a world without the short-term disruption of the tax credit, RINs would fulfill their intended goal in the market and supplant government subsidies. And moreover, with a robust, court-upheld mandate, who needs a subsidy anyway? The obligated parties have to blend biodiesel and that&rsquo;s that, irrespective of price.

2011/03/12996990319115.jpg

Event Recap

If you are a shareholder in a biofuels corporation, or if you have an ownership interest in a different business organization (such as a limited liability company), you may be curious about the value of your company. Or, perhaps more specifically, you may be interested in the value of your stock or similar interest. Alternatively, you may have concern as to whether your business is complying with local law. As a person holding such an ownership interest, the law may permit you to inspect and copy the business&rsquo; books and records to obtain answers to these and other important questions.
 In many states across the country, if you have a proper purpose and/or meet certain statutory criteria, the law may allow you to inspect and copy your business&rsquo; books and records. While a proper purpose will frequently vary from case to case and state to state, a few generalized examples include conducting an inspection to:
 &bull; Ascertain the true financial condition of a business in which you hold an ownership interest.
 &bull; Determine the specific value of your stock or similar interest in the business.
 &bull; Assess whether the affairs of the business have been or are being conducted in accordance with the law.
 &bull; Investigate possible mismanagement and/or wrongdoing. If the stated purpose for conducting a books and records inspection is to investigate possible mismanagement, then the requesting party may be required to establish a credible basis from which to infer there is possible mismanagement to warrant further investigation.
 Generally, the scope of a books and records request should be tailored to and consistent with the requesting party&rsquo;s stated purpose. For example, if the requesting party&rsquo;s purpose is to ascertain the financial condition of the business, then the records request should be limited to seeking books and records relating to the financial condition of the business. If the requested books and records are not properly related to the stated purpose, then the inspection can be denied as seeking materials beyond what is need to satisfy the purpose. Similarly, if a requesting party already has sufficient information to satisfy a stated purpose, whether from other sources or as a result of a prior books and records request, then an inspection may properly be denied.&nbsp;&nbsp;
 Depending upon the state in which your business is incorporated, or otherwise created, the type of documentation available for inspection and copying may vary. Frequently, however, a stockholder or person holding a similar interest can inspect and copy the following records:
 &bull; Excerpts of minutes from meetings of the board of directors, committees acting for the board of directors, and shareholders&rsquo; meetings (among others).
 &bull; Accounting records of the business.
 &bull; Records of shareholders.
 &bull; The business&rsquo; most recent financial statements.
 The formal procedure to initiate and successfully complete an inspection generally requires compliance with state law. Failure to comply with applicable law may result in the business recovering any fees and costs (including attorneys&rsquo; fees and costs) incurred as a result of an improper inspection demand. Conversely, if the business fails to provide you with certain records after you have made a proper demand, you may be entitled to recover any attorneys&rsquo; fees and costs you may incur.&nbsp;
 Laws on this important issue vary from state to state and entity to entity. If you are interested in learning more about your business by conducting a proper books records inspection, or simply have questions, you may want to consider consulting a licensed attorney. Author: Matthew McKinney Attorney, BrownWinick (515) 242-2468 <a href="mailto:mckinney@brownwinick.com">mckinney@brownwinick.com</a>

2011/03/1299699518387.jpg

You Don't Know What You  Have Until It's Gone—or You Inspect It

Besides issues related to economics and policy, and despite being competitive with petroleum diesel fuel, biodiesel has continued to face several technical issues, including unfavorable cold flow and oxidative stability, as well as questionable NOx emissions. With the introduction and increasing market penetration of new emissions control technologies such as selective catalytic reduction (SCR), the issue of NOx may fade with time, but the issues of cold flow and oxidative stability, both of which are addressed by specifications in biodiesel standards, will remain. This article briefly discusses addressing these problems without compromising other fuel properties in biodiesel standards, such as cetane number (CN) and kinematic viscosity.
 As fatty acid mono-alkyl esters, the major components of biodiesel are constructed of two moieties, the fatty acid and the alcohol, both of which can be considered for &ldquo;tailoring&rdquo; to improve biodiesel properties.
 Five approaches exist for modifying biodiesel fuel composition for improvement. These are a) additives; b) using an alcohol other than methanol to produce biodiesel; c) physical procedures such as fractionation; d) using &ldquo;alternative&rdquo; feedstocks with an inherently different fatty acid profile; e) genetic modification of the fatty acid profile.&nbsp;
 Additives are probably the most common approach. However, several additives are likely necessary since specific additives usually address a single problem. Issues here are additive compatibility, effects on other properties besides the one to be addressed, storage and more. For example, antioxidants are consumed with time, thus they are actually oxidation delayers. Oxidation of biodiesel will begin once the antioxidants have been consumed.
 Physical procedures include fractionation, for example, to remove higher-melting saturated fatty esters to improve cold flow. However, this lowers both oxidative stability by enriching the unsaturated fatty esters in biodiesel, and the CN, as saturated fatty esters possess higher CNs than unsaturated fatty esters.&nbsp;
 Changing the alcohol moiety has no or little effect on properties such as oxidative stability or CN. Any effect is likely marginally beneficial. Kinematic viscosity, however, slightly increases. Esters other than methyl have better cold flow properties as shown by the melting points (MP) of ethyl stearate (33 degrees Celsius) and propyl stearate (28.1 C) vs. methyl stearate (37.7 C). Isopropyl esters have even lower melting points, reflected in lower cloud points of the corresponding vegetable oil esters. The major disadvantages of using esters other than methyl as biodiesel are the higher cost of the alcohol, and changes to the transesterification reaction.&nbsp;
 The other approaches, &ldquo;alternative&rdquo; feedstocks and genetic modification of the fatty acid profile, are partially related. For these approaches, it is useful to first define fatty acids that are most likely to impart favorable properties to biodiesel. Acids such as decanoic (C10:0; capric acid) and hexadecenoic (C16:1; palmitoleic) are prime candidates for enrichment as their esters compromise between the various fuel properties. Methyl decanoate has a MP of around minus 13 C, a CN of 51 to 52, oxidative stability exceeding 24 hours in the Rancimat test, and a kinematic viscosity of 1.72 mm2/sec. Methyl octanoate, with an even lower MP of minus 37.4 C, however, has a CN of approximately 42, below that prescribed in biodiesel standards. Accordingly, methyl esters prepared from cuphea oil enriched in C10:0 (about 65 percent) exhibited a CN in the range of 55 to 56, kinematic viscosity around 2.4 mm2/sec and a cloud point around&nbsp; minus 9 to minus 10 C, probably the lowest reported for a vegetable oil-derived biodiesel fuel. The oxidative stability, however, only slightly exceeded the 3-hour minimum prescribed in ASTM D6751, showing that an antioxidant additive would likely still be necessary. Cuphea oil methyl esters also exhibited improved combustion properties. Methyl palmitoleate has a MP of minus 34 C, lower than that of methyl oleate (minus 20 C), and a CN in the lower to mid-50s. Breeding feedstocks with a modified fatty acid profile highly enriched in such acids is therefore likely a promising approach to improving biodiesel fuel properties. An interesting aspect that has been receiving increasing attention in this respect is the use of nonlipid feedstocks (carbohydrates) to ultimately produce biodiesel. Minor components affecting biodiesel fuel properties, however, will need to be taken into account in any case.&nbsp;
 In summary, modifying biodiesel composition to improve fuel properties is a promising approach that is likely to receive increasing attention by researchers in the future. It may ultimately prove to be the most viable approach to improving biodiesel fuel properties, thereby ensuring its future commercial marketability and success. Author: Gerhard Knothe Research Chemist, USDA-ARS-NCAUR (309) 681-6112 <a href="mailto:gerhard.knothe@ars.usda.gov">gerhard.knothe@ars.usda.gov</a>

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Optimizing Biodiesel  Composition and Properties

As biodiesel supply and demand grow, a steady stream of glycerin is expected to follow, and research is underway to find new use methods for the biodiesel byproduct. Researchers at Austin Peay State University in Clarksville, Tenn., have discovered a novel method for converting glycerol into value-added coproducts such as hydrogen and ethanol.
 With funding from the National Science Foundation and the U.S. EPA, Sergi Markov, associate professor of biology, and two of his students, Jared Averitt and Barbara Waldron, have studied the effects of the bacterium Enterobacter aerogenes on glycerol. The team concluded that when Enterobacter bacterium feeds on crude glycerol under anaerobic conditions in a traditional stirred-tank bioreactor, a significant amount of hydrogen and ethanol is produced, including trace quantities of lactate, acetate, 1,3-propanediol and formate.
 Markov, Averitt and Waldron co-authored a paper on their findings, titled &ldquo;Bioreactor for Glycerol Conversion into H2 by Bacterium Enterobacter aerogenes,&rdquo; which was published earlier this year in the International Journal of Hydrogen Energy.
 Specifically, Markov tells Biodiesel Magazine that he obtained approximately 22 liters of hydrogen from a 17 liter-volume bioreactor per hour and 50 milliliters of hydrogen from a 35 milliliter-volume bioreactor per hour. From there, Markov explains, enough hydrogen was produced that he could inject it from the bioreactor directly into a small fuel cell to power a small fan in the lab.
 &nbsp;&ldquo;Our process for conversion of glycerol into hydrogen fuel is possible to scale up pretty quickly,&rdquo; Markov says. &ldquo;We can also use hydrogen as an energy source or as an energy carrier.&rdquo;
 According to Markov, the research on glycerol utilization stems from work he and his team initially did while trying to find efficient ways to produce biodiesel from cultivated algae oil. Since glycerol was an end coproduct in their trial runs, Markov says that&rsquo;s when the decision was made to study new uses for the compound.
 &ldquo;We were actually more successful converting glycerol into hydrogen than we were converting biodiesel from the algae oil,&rdquo; Markov says. &ldquo;Biodiesel from algae oil is still a work in progress for us.&rdquo;
&mdash;Bryan Sims

BETTER COPRODUCT: Sergi Markov, associate professor of biology at Austin Peay State University, and his team are able to produce hydrogen, along with trace amounts of other compounds, from glycerin.  

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APSU researchers discover useful byproducts from glycerin

Microbial Tricks for the Glycerol Trade

The Canadian government is moving ahead with plans established in 2009 to implement a 2 percent biodiesel mandate for diesel and home heating oil. The announcement, made Feb. 10, calls for a July 1 implementation. The proposed regulatory amendment has been published in the Canada Gazette, and is open for a 60-day comment period.
 &ldquo;When we announced our renewable fuels strategy, we were clear that the 2 percent requirement would be implemented subject to technical feasibility,&rdquo; said Peter Kent, minister of the environment. &ldquo;After positive results, we are moving forward with this requirement, which will result in further reductions in greenhouse gas emissions and ultimately in cleaner air for all Canadians.&rdquo;
 According to Canadian Renewable Fuels Association President Gordon Quaiattini, implementation of the mandate is critical to the country&rsquo;s biodiesel industry. &ldquo;It ensures a market for the renewable fuels that we are producing,&rdquo; he says. &ldquo;The commitment was made in 2009 that they would move ahead in 2011, so we are certainly appreciative of the government keeping that commitment and showing its leadership on moving ahead with this renewable diesel standard.&rdquo;
 The B2 mandate translates into the use of approximately 600 million liters (159 million gallons) of biodiesel each year. &ldquo;We have about 200 million liters of biodiesel capacity in Canada currently constructed, with other projects moving forward,&rdquo; Quaiattini says. &ldquo;So, we&rsquo;re not quite there in terms of having the capacity built out, but&hellip;certainly we are very optimistic that additional capacity will be built out to meet the mandate.&rdquo;
 In the meantime, there may be opportunity for U.S. producers to help meet the mandate. &ldquo;We have U.S. biodiesel that comes into the Canadian market, and we have Canadian produced biodiesel that goes into the current U.S. market,&rdquo; he continues. &ldquo;Under NAFTA we have an open fuels policy between Canada and the United States, so in the near term there is the possibility for imported biodiesel being used to meet the mandated requirements.&rdquo;
 While the CRFA is clearly supportive of the new mandate, some groups are not. The Canadian Trucking Alliance has spoken out challenging government claims that the mandate will help reduce greenhouse gas emissions. The CTA also claims that the use of biodiesel could cause cold-weather operation problems and negate vehicle warranties. &ldquo;It seems from the very beginning that concerns of the consumer&hellip;were secondary to those of big agribusiness, which stands to gain handsomely from the mandate,&rdquo; says CTA CEO David Bradley, noting that it is frustrating that the government would add cost to businesses in times of rising fuel prices to achieve questionable environmental benefits.
 &ldquo;We continue to be perplexed by what the [CTA] says,&rdquo; Quaiattini notes, adding that numerous demonstration projects have shown no adverse operating effects on vehicles running a B2 blend, and that the CRFA doesn&rsquo;t believe the CTA&rsquo;s position is representative of all trucking companies in Canada. &ldquo;We think this [mandate] is widely supported by a number of trucking fleets and busing fleets that have already been using biodiesel for some time now.&rdquo;&nbsp;
&mdash;Erin Voegele

BUILT-IN MARKET: The government of Canada is moving ahead with plans to implement a B2 mandate for diesel fuel and home heating oil, equal to approximately 159 million gallons of biodiesel per year. 

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Canadian Renewable Fuels Strategy meets new milestone

Implementing a Mandate

Carbon reduction is only one reason why Nevada Sen. Mike Schneider, D-Las Vegas, has put forth a bill that would require a B10 mandate for all diesel-fueled vehicles in the state. The other is jobs. Apparently, Schneider, chairman of the energy committee for the city, was the right person to go to.
 Led by producer members from Biodiesel of Las Vegas in collaboration with Schneider, the bill now&nbsp; before the state&rsquo;s natural resource commission is a reminder of one of the undeniable benefits of biodiesel production. &ldquo;There is no doubt about it, we need job creation in Nevada and here in Las Vegas, in particular,&rdquo; Schneider says. But, even as Schneider himself agrees that the mandate would help plants create more jobs, there is another element that usually, as this bill proves, comes with biodiesel: opposition.
 Schneider says that controversy is already brewing, mainly from the trucking industry that argues a B10 mandate would void many engine warranties. &ldquo;I think they just don&rsquo;t like mandates so they are trying to find a glitch in the bill,&rdquo; he says. Biodiesel proponents can point to other mandates already implemented throughout the country, or the ASTM D975 diesel spec that allows for up to 5 percent biodiesel without any notice, or the D7467 spec for biodiesel blends B6 to B20&mdash;at least if job creation is a real priority.
&mdash;Luke Geiver

Proposed B10 mandate highlights undeniable biodiesel facts, good and bad 	

Las Vegas' Top Priority?

Indianapolis may be home to the electrifying Indianapolis Motor Speedway and the Indy 500, but for four days in June, any positive buzz in the city will be coming from ethanol. As host to the 27th annual International Fuel Ethanol Workshop &amp; Expo, June 27-30 at the Indiana Convention Center, the city can expect more than 2,500 well-versed experts and attendees to arrive for the most recognized ethanol event in the world.
 The anticipation for the FEW has already begun, and the mayor of Indianapolis has issued a personal greeting to those headed for the Hoosier State. &ldquo;I admire your organization&rsquo;s commitment to ethanol, a product that helps fuel our famous Indianapolis 500 cars,&rdquo; Mayor Gregory A. Ballard wrote to International FEW members. And the city itself, according to Ballard, should provide an invigorating backdrop for the conference. &ldquo;The 13th largest city in the U.S. is continuing to grow, with more than $3 billion in new tourism offerings coming on-line by the time we host the Super Bowl in 2012,&rdquo; Ballard says. &ldquo;Consistently ranked as one of the Top 25 most visited cities in the U.S., I am confident our numerous cultural attractions, convenient downtown, and diverse culinary scene will create the perfect setting for your meeting.&rdquo;
 The four-day event will feature keynote speeches, technical presentations and unmatched networking forums based on the current, and future, ethanol industry. The 27th installment of the FEW will include four main tracks highlighting the most up-to-date innovations, strategies and operations in the realms of production, management, coproducts and cellulosic ethanol, all of which reach the presentation floor through an abstract rating process that utilizes nearly 40 industry experts to hand-pick the best of the best.
 With industry professionals attending from nearly all 50 states, 25 countries and plant personnel from almost every ethanol facility in the U.S. and Canada, this year&rsquo;s FEW will remain a conference tailored to ethanol producers. And for those interested in the current trends and challenges facing the blossoming cellulosic ethanol industry, expect the latest news and information on where the industry is, and where it is headed.

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27th Annual FEW Heads to Indy 

Teresa Alleman, a senior chemist at National Renewable Energy Laboratory in Golden, Colo., presented the latest biodiesel quality survey results at the National Biodiesel Conference &amp; Expo in early February. The results are very encouraging and positive, not only for biodiesel producers who make the fuel, but also for blenders and end-users. Only a few short years ago, nearly half the samples tested failed one parameter or another. This was the first B20 quality survey conducted by NREL in which the samples were held against ASTM D7467, the B6 to B20 blend spec.
 Forty B20 samples were taken from retail outlets from December 2009 through January 2010, and three-fourths of them were obtained from regions deemed as colder, while the remaining fraction was taken from warmer regions. Geographic areas with average temperatures below minus 12 degrees Celsius (10.4 degrees Fahrenheit) are considered colder climates, Alleman said, meaning having 10th percentile minimum ambient air temperatures below minus 12 C for December and January. Tests for accurate biodiesel content in the samples showed 95 percent were blends of B20 or below, and 76 percent were between B6 and B20. Only one sample displayed greater biodiesel content than 20 percent.
 NREL also photographed 26 pumps to assess Federal Trade Commission compliance with labeling, and found the vast majority of pumps were labeled correctly, including details down to the black lettering, blue background and font size. A few labels were out of compliance and homemade, but still effectively relayed the message about the fuel blend.
 Acid value tests showed all samples met the D7467 spec, and half of the B20 fuel samples came in at less than half of the specification.
 Eighty percent of the B20 samples met the oxidative stability spec, and the warmer climate samples tested tended not to meet the spec as often as those in the colder climates. Sample age, however, was not known.
 Most samples tested below 200 parts per million for moisture under the Karl Fischer test method. Even though there is no cloud point specification, Alleman said the fuel samples displayed that there&rsquo;s a wide range of cloud point in the field. NREL also did a FAME characterization study of the samples, and found there was a 50/50 split between straight soy biodiesel and multifeedstock biodiesel (a complex mixture of any two or more feedstocks out there).
&mdash;Ron Kotrba

DATA SAMPLING: The 40 B20 samples obtained by NREL were taken from the areas shown with dots; three-fourths were obtained from regions with an average temperature below minus 12 degrees Celsius. 


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Latest NREL sampling shows almost all biodiesel meets quality specs

Survey Says B20 Hits Quality Marks

BookMerge Technology Inc., through its wholly owned subsidiary Extreme Biodiesel, finalized all necessary operations, permitting, and outfitting of trucks, and retained personnel to own and operate a fully functional brown grease recycling and rendering plant on the site of its 6 MMgy biodiesel production facility in Corona, Calif.
 According to BookMerge Technology CEO Rick Carter, the move to conduct waste grease collection at local restaurants and perform grease trap cleaning will allow Extreme Biodiesel to create additional revenue and expand its waste vegetable oil collection business. &ldquo;With the economic environment getting better, the government reinstituting tax incentives and the demand for biodiesel going up, we&rsquo;re quite happy where things are going for us,&rdquo; Carter tells Biodiesel Magazine.&nbsp;
 In addition to producing biodiesel and waste oil collection, recycling and rendering operations, Extreme Biodiesel continues to produce and sell its line of &ldquo;mini extractor&rdquo; reactors, which it initiated in June 2004 in Santa Ana, Calif. These units, according to the company, are designed for small business owners and individuals who seek to produce biodiesel at their own locations. As sales of its mini extractors picked up in February 2008, the company moved to its 11,400-square-foot facility in Corona.
&mdash;Bryan Sims

Extreme Biodiesel becomes more than just a pure-play biodiesel producer

Supply Chain Capture

The Phoenix metro area is now home to a new biodiesel plant. Pure Earth Energy Resources LLC recently launched Rev Biofuels, a 10 MMgy biodiesel plant located in Gilbert, Ariz.
 The new facility began operations in December. According to Rev Biofuels President Dan Rees, the plant features four semi-continuous flow production lines that can process a wide variety of feedstocks. &ldquo;We built four small production lines, which enables us to use any type of feedstock we want, because there is a stopping point in each step of the process,&rdquo; Rees says. &ldquo;We&rsquo;re not bound by what equipment was tuned to do. We can adjust our process to whatever kind of feedstock is [running] in that particular line.&rdquo;
 To date, Rees says his company has secured access to waste cooking oil for use as feedstock, but is also investigating other feedstock sources. &ldquo;Waste oil is what we are starting with, but we don&rsquo;t think we can satisfy 10 million gallons on just waste oil, which is why we will need to look at other sources,&rdquo; he says.
 Although the company has investigated the use of cottonseed oil as a feedstock for the facility, it is not moving forward with procurement plans because there is currently no approved pathway for the feedstock under RFS2. &ldquo;It&rsquo;s not a viable product because it won&rsquo;t qualify for RINs (renewable identification numbers),&rdquo; Rees says.
 The extensive process required to approve a new pathway takes a great deal of time, Rees says. &ldquo;It&rsquo;s not something that is going to happen anytime soon,&rdquo; he adds, noting that Rev Biofuels has yet to determine if it will petition the U.S. EPA for a cottonseed oil pathway.
 In the near-term, Rees says biodiesel produced at the new facility will likely be used to meet local demand. &ldquo;It was really our goals and our mission when we opened the new plant to satisfy the local need, and I think there is enough demand locally to where we&rsquo;re not going to have any trouble moving all of our biodiesel as quick as we can make it,&rdquo; he says. Rees also notes that his company has plans to increase the capacity of the plant in the future, at which time it might make sense to sell into regional and national markets.
&mdash;Erin Voegele

FLEXIBLE PROCESSING: Rev Biofuelsâ€™ 10MMgy biodiesel plant in Gilbert, Ariz., features four semi-continuous flow process lines. 

April 2011

Business Briefs

Business Briefs

Business Briefs: People, Partnerships & Deals

Business Briefs

Columns

BBI International to Publish Pellet Magazine

Cutting BCAP Funding: Penny-Wise and Pound-Foolish

The Wood Stove Excels at Reducing Fossil Fuels—But Can it Get Clean Enough?

A Mobile Indirect Biomass Liquefaction System

Continuing Regulatory Uncertainty Need Not be a Showstopper

Biorefinery Project Finance Techniques

Reinstated

Washington's Shotgun Wedding

Tax Strategies for Biorefining Startups

Event Recap

You Don't Know What You Have Until It's Gone—or You Inspect It

Optimizing Biodiesel Composition and Properties

Featured

MACT Madness

Pushing for Permits

Particularity in Permitting

Controlling PM

Searching for Unity

Stepping Into the Public Light

Breakout Potential

A Critical Year

Finding the Right Purification Approach

The Pure Potential of Glycerin

Contributions

Integration and Use of Solid Waste from Agave

Do You Have Control Over NIMBYism?

Biodiesel Process Safety Management

April 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: People, Partnerships & Deals

Business Briefs

Columns

BBI International to Publish Pellet Magazine

Cutting BCAP Funding: Penny-Wise and Pound-Foolish

The Wood Stove Excels at Reducing Fossil Fuels—But Can it Get Clean Enough?

A Mobile Indirect Biomass Liquefaction System

Continuing Regulatory Uncertainty Need Not be a Showstopper

Biorefinery Project Finance Techniques

Reinstated

Washington's Shotgun Wedding

Tax Strategies for Biorefining Startups

Event Recap

You Don't Know What You Have Until It's Gone—or You Inspect It

Optimizing Biodiesel Composition and Properties

Featured

MACT Madness

Pushing for Permits

Particularity in Permitting

Controlling PM

Searching for Unity

Stepping Into the Public Light

Breakout Potential

A Critical Year

Finding the Right Purification Approach

The Pure Potential of Glycerin

Contributions

Integration and Use of Solid Waste from Agave

Do You Have Control Over NIMBYism?

Biodiesel Process Safety Management

April 2011