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MAY 2016 www.ethanolproducer.com Colocated Biodiesel Transforms Corn Oil into Fuel Nutritionists Want Data to Match New Feeds to Best Uses EVOLVING COPRODUCTS Page 32 Novita, Nutrinsic Launch Novel Feed Products Page 38 Page 26

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Page 1: 2016 May Ethanol Producer Magazine

MAY 2016

www.ethanolproducer.com

Colocated Biodiesel Transforms Corn Oil into Fuel

Nutritionists Want Data to Match New Feeds to Best Uses

EVOLVINGCOPRODUCTS

Page 32

Novita, Nutrinsic Launch Novel Feed Products

Page 38

Page 26

Page 2: 2016 May Ethanol Producer Magazine
Page 3: 2016 May Ethanol Producer Magazine

Reason

You’re

www.uswaterservices.com

Visit us at FEW 2016! Booth #223

Page 4: 2016 May Ethanol Producer Magazine

4 | Ethanol Producer Magazine | MAY 2016

MAY 2016 VOLUME 22 ISSUE 5CONTENTS

DEPARTMENTS6 EDITOR'S NOTE Building Upon What Already Exists By Tom Bryan

7 AD INDEX

8 THE WAY I SEE IT A New Long-Range Plan Every 4 Years By Mike Bryan

9 EVENTS CALENDAR

10 VIEW FROM THE HILL Barbecues, Beaches and E15? You Bet By Bob Dinneen

12 DRIVE Implement RFS as Congress Intended By Tom Buis

14 GRASSROOTS VOICE E15 Today, High-Octane E25 Tomorrow By Brian Jennings

16 GLOBAL SCENE EU Must Increase Ethanol Use to Meet Targets By Robert Wright

18 BUSINESS BRIEFS

20 COMMODITIES

22 DISTILLED

62 CLEARING THE AIR Ethanol Completes the Puzzle By Dave VanderGriend

64 BUSINESS MATTERS Carbon Intensity Creates Opportunities By Bernie Hoff man

66 MARKETPLACE

Ethanol Producer Magazine: (USPS No. 023-974) May2016, Vol. 22, Issue 5. Ethanol Producer Magazine is published monthly by BBI International. Principal Offi ce: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offi ces. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

COLOCATION Duel FuelMore plants come online producing biodiesel from corn oil alongside ethanol production By Keith Loria

26NUTRITION Needed: Species-Specifi c, Process-Specifi c Nutritional Profi les Feed industry needs good data on new, altered coproductsBy Susanne Retka Schill

32

FEATURES

CONTRIBUTIONS

Adkins Energy biodiesel plant manager Doug Roberts stands in front of the clean oil tank.PHOTO: DREIBELBIS-FAIRWEATHER

ON THE COVER

DIVERSIFICATION Protein Packs a PunchTwo companies take diff erent approaches to value-added feed coproductsBy Holly Jessen and Kassidi Andres

38PROFILE DG-Based Resins Spring into PlasticsNebraska company’s biobased components used in lawn, gardening products By Ann Bailey

44

PREVIEW FEW: Bigger and Better Than Ever in its 32nd YearColocated with the advanced biofuels conference, the largest gathering of biofuel producers and professionals of the yearBy Ann Bailey

46

52 BIODIESEL Biomass-based Diesel Poised for GrowthBiodiesel becomes major market for inedible corn oil By Dave Elsenbast

54 YEAST New Coproduct Technology Produces Food-Grade YeastPotential source for abundant, low-cost protein supplementsBy Don McLellan

58 REGULATION New, Evolving Coproducts Require Regulatory Due DiligenceAll feed ingredients must meet specifi c, defi ned legal defi nitionsBy Kurt Rosentrator

Page 5: 2016 May Ethanol Producer Magazine

www.fqptech.com

937-310-1425

Process Technologies

Process Technologies

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Page 6: 2016 May Ethanol Producer Magazine

6 | Ethanol Producer Magazine | MAY 2016

FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: TWITTER.COM/ETHANOLMAGAZINE

EDITOR'S NOTE

Building Upon What Already Exists

Tom BryanPresident & Editor in [email protected]

I’ve always believed that America’s advanced biofuels industry will substantially rise from, with or because of, our nation’s standing fl eet of corn ethanol plants. Our critics wish advanced biofuels would go away or spring autonomously from the 15 billion gallons of grain ethanol we already produce. But that fl awed logic ignores the fact that our existing ethanol facilities represent one of the best and most suitable places for next-generation biofuels to surface.

Today’s dry mills are getting more out of corn than once thought possible. While cellulosic ethanol from stover, cobs and residual fi ber is on the way, these facilities already are producing corn oil and, in a handful of places, biodiesel. “In Duel Fuel,” our page-26 cover story, we catch up with ethanol producers hosting on-site biodiesel production. As freelance journalist Keith Loria reports, the advantages of colocating biodiesel and ethanol production are multifold. By sharing infrastructure, feedstock, process essentials and personnel, biodiesel is clearly a smart play for some producers.

In fact, it is now exceptional for U.S. ethanol plants not to extract corn oil. The industry’s relatively swift and near-total transition to corn oil removal undeniably has changed the profi le of our industry’s chief coproduct. Distillers grains has been altered, and it’s going to take a little while longer to fully understand its various nutritional profi les. On page 32, in “Wanted: Species Specifi c, Process Specifi c, Nutritional Profi les,” EPM Managing Editor Susanne Retka Schill, reports on how these low-oil, low-fi ber, high-protein coproducts are fi nding their optimal market values while animal nutritionists revise their data sheets and assumptions.

Next, in “Protein Packs A Punch,” on page 38, EPM’s outbound managing editor Holly Jessen—who left BBI in March to pursue full-time parenting—collaborates with our editorial intern, Kassidi Andres, on a profi le of two companies taking advantage of distillers grains’ malleable attributes. Novita Nutrition and Nutrinsic Corp. have vastly different approaches and products, but each is transforming DDGS into higher-value products, from feed to fertilizer. We’re introduced to a company with similar aspirations in “DG-Based Resins Spring Into Plastics,” on page 44. In this story, by EPM Associate Editor Ann Bailey, we fi nd out how a Nebraska company is producing biomaterials from DDGS for thermoplastics.

Finally, on page 46, we feature our annual preview of the International Fuel Ethanol Workshop & Expo. The 32nd annual FEW will be held in Milwaukee, Wisconsin, in June. It’s fi tting that our conference preview is surrounded by stories about new technology and innovation because that’s what the FEW is all about. I’m excited about the fact that this year’s FEW will be held in concert with the National Advanced Biofuels Conference & Expo. We just couldn’t resist the synergies of colocation.

Page 7: 2016 May Ethanol Producer Magazine

MAY 2016 | Ethanol Producer Magazine | 7

VOLUME 22 ISSUE 5

TM

EDITORIALPresident & Editor in Chief

Tom Bryan [email protected]

Vice President of Content & Executive EditorTim Portz [email protected]

Managing EditorSusanne Retka Schill [email protected]

Associate EditorAnn Bailey [email protected]

News EditorErin Voegele [email protected]

Copy EditorJan Tellmann [email protected]

ARTArt Director

Jaci Satterlund [email protected] Designer

Raquel Boushee [email protected]

PUBLISHINGChairman

Mike Bryan [email protected]

Joe Bryan [email protected]

SALES Vice President of Operations

Matthew Spoor [email protected] & Marketing Director

John Nelson [email protected] Business Development Director

Howard Brockhouse [email protected] Account Manager/Bioenergy Team Leader

Chip Shereck [email protected] Account Manager

Jeff Hogan [email protected] Circulation Manager

Jessica Beaudry [email protected] & Advertising Manager

Marla DeFoe [email protected]

Customer Service Please call 1-866-746-8385 or email us at [email protected]. Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping and han-dling charge of $49.95 for anyone outside the United States. To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or [email protected]. Advertising Ethanol Producer Magazine provides a specifi c topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To fi nd out more about Ethanol Producer Magazine advertising op-portunities, please contact us at 866-746-8385 or [email protected]. Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to [email protected]. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

COPYRIGHT © 2016 by BBI InternationalPlease recycle this magazine and remove inserts or samples before recycling

ADVERTISER INDEX

2016 Fuel Ethanol Workshop & Expo 682016 National Advanced Biofuels Conference & Expo 57Apache Stailess Equipment Corporation 51Buckman 49Cloud/Sellers Cleaning Systems 30D3Max 63DuPont Industrial Biosciences 67Ethanol Producer Magazine Webinar Series 40Fagen Inc. 15Fluid Quip Process Technologies, LLC 5Growth Energy 2Hengye Inc. 18 Hydro-Klean LLC 48ICM, Inc. 9Indeck Power Equipment Co. 22Interra Global Corporation 19Iowa Economic Development Authority 56J.C. Ramsdell Enviro Services, Inc. 24Lallemand Biofuels & Distilled Spirits 13McC Inc. 25Mist Chemical & Supply Company 23Mole Master Services Corporation 31MPW Industrial Services 34Nalco Water 37Phibro Ehtanol Perfomance Group 17POET-DSM Advanced Biofuels 61Premium Plant Services, Inc. 59RPMG, Inc. 36Solenis LLC 11Sukup Manufacturing Co. 65Summit 28Swedish Exergy AB 60Thermal Refractory 29Tower Performance, Inc. 50U.S. Grains Council 55U.S. Water Services 3Valicor Separation Technologies 41Victory Energy Operations, LLC 42-43WestAgro Executive Brands 35

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When America talks about long-range planning that typically means until the next election. For example, the renewable fuels standard (RFS) is in place until 2022. While on the surface that may provide some comfort and a bit of breathing room for ethanol producers, it is not, by any defi nition, long-range planning.

The Affordable Health Care Act (Obamacare), meant to be a long-term solution to broader health care for millions of uninsured people, may be dismantled, depending on who wins the November election. The Iran nuclear deal, like it or not, was intended to be a long-term solution to dealing with Iran’s nuclear capabilities. A change in administration could scuttle the whole deal. The acceptance of Syrian refugees into America was imposed as part of an international solution to millions of people fl eeing oppression, but some candidates have suggested the elimination of that program all together. The winner on Nov. 8 could turn these long-term polices upside down.

Some will take great delight in seeing all of these policies done away with. Others will wish to see them kept in place or even expanded. The point here is that America seems to be stuck in a four- to eight-year planning cycle. During the debates, candidates talked endlessly about planning for the future—our children’s and grandchildren’s futures—but, in reality, almost all of that policy bravado is only as good as the next election cycle.

China has a 100-year plan broken into fi ve-year segments. I’ll be the fi rst to admit that it is easier to have a 100-year plan when the country’s leader may actually stay in power for 30 years or more and, in fairness, most democratic countries operate on election cycle planning. But wouldn’t it be great if Democrats and Republicans got together and did what they are supposed to do,

which is come up with strategies that actually put in place real long-term solutions that would foster economic growth, energy security, a cleaner environment, strong agricultural policies and combat poverty?

We can’t even seem to agree that global warming is a threat and come up with a long-range plan to deal with it when the worst thing that could happen is that the naysayers are right and we end up with a cleaner environment for naught. Now that would be a real shame.

It’s impossible for America to have even a fi ve-year plan like China because as soon as the election is over, the planning and bickering begin to unseat the current administration four years from the date it is sworn in. That cannot possibly end in any productive long-range planning. It can only end in policies that are short-sighted and designed to discredit the current administration with the focus of unseating it at the next election.

So when potential investors look at new technology that could make a signifi cant difference in our lives and the lives of future generations and then see that Congress’ long-range plan is only for the next four years, it gives investors little, if any, confi dence to invest. If we want real growth, for example, in renewable energy, we need to have a Congress that puts aside the petty politics and looks at the future, not just to 2022, but to 2050 and beyond.

We can take no solace in an RFS that ends in 2022. That’s at a minimum, 30 years short of what a real long-range plan for renewable fuels should encompass.

That’s the way I see it.

A New Long-Range Plan Every 4 Years By Mike Bryan

Author: Mike BryanChairman, BBI International

[email protected]

THE WAY I SEE IT

Page 9: 2016 May Ethanol Producer Magazine

2016 International Fuel Ethanol Workshop & ExpoJune 20-23, 2016Wisconsin Center Milwaukee, WisconsinNow in its 32nd year, the FEW provides the ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. As the largest, longest-running ethanol conference in the world, the FEW is renowned for its superb programming—powered by Ethanol Producer Magazine —that maintains a strong focus on commercial-scale ethanol production, new technology, and near-term research and development. The 2015 event drew about 2,000 people from 45 States, four Canadian provinces and 25 countries.

866-746-8385 | www.fuelethanolworkshop.com

National Advanced Biofuels Conference & ExpoJune 20-23, 2016Wisconsin CenterMilwaukee, WisconsinThe 6th annual National Advanced Biofuels Conference & Expo will take place June 20-23, 2016, at the Wisconsin Center in Milwaukee, Wisconsin. Produced by BBI International, this national event will feature the world of advanced biofuels and biobased chemicals—technology scale-up, project fi nance, policy, national markets and more—with a core focus on the industrial, petroleum and agribusiness alliances defi ning the national advanced biofuels industry.

866-746-8385 | www.advancedbiofuelsconference.com

ACE Annual ConferenceAugust 8-10, 2016Loews HotelMinneapolis, MinnesotaACE’s annual conference is unique in the world of renewable fuels because it is specifi cally tailored to the interests and needs of the people of ethanol—the folks in the trenches. It’s a gathering of ACE’s commitment to connect ethanol producers with farmers, researchers, retailers, and support businesses to continue what all of them started a long time ago. It’s also an excellent place to learn and share ideas. And it has all the fun of a family reunion. Join us August 8-10, 2016, at the Loews Hotel in downtown Minneapolis, Minnesota.

605-334-3381 | www.ethanol.org/conference

EVENTS CALENDAR

icminc.com/epm

Page 10: 2016 May Ethanol Producer Magazine

10 | Ethanol Producer Magazine | MAY 2016

Summer is right around the corner, which means backyard barbecues, beach trips and fl ip fl ops. But unfortunately, it also means a restriction on the sale of higher ethanol fuel blends. Starting June 1 and through Sept. 15, summer volatility restrictions are in place, preventing ethanol blends above 10 percent from being sold in nearly three-quarters of our nation's gasoline market.

Nearly 30 years ago, the U.S. EPA provided a 1-pound-per-square-inch (psi) waiver of the Reid vapor pressure (RVP) volatility requirements for certain ethanol blends. It did so in recognition of the fact that lower volatility blendstocks were not readily available in the marketplace and to encourage the increased use of renewable fuels. The agency also concluded, after extensive air quality modeling, that the 1-psi waiver would not result in increased ozone formation because reductions in exhaust hydrocarbons and carbon monoxide would offset the impact of potentially higher evaporative emissions.

Unfortunately, while EPA has given an RVP waiver to ethanol blends up to 10 percent, it has not extended the same waiver to any blends above that, frustrating millions of consumers who want to use E15 in their cars and trucks year-round.

Ironically, the RVP waiver—originally provided to expand the production and use of fuel ethanol—now is having the perverse effect of discouraging greater ethanol use in today’s gasoline market, and it is obstructing the successful implementation of important fuel and carbon reduction policies enacted since then, including the renewable fuel standard (RFS).

The Renewable Fuels Association repeatedly has urged EPA to extend the RVP waiver to E15, but the agency remains opposed. EPA has said it does not believe it has the statutory authority to extend the waiver. While we disagreed with EPA’s conclusion on that issue, another option available to the agency would be to simply require lower-RVP summertime conventional gasoline blendstocks for mixing with all ethanol blends.

Under the Clean Air Act, EPA has general authority to regulate the composition of fuels and it also has specifi c authority to mitigate any adverse effects on air quality based on the renewable volumes required by the act. These sections provide the agency with ample authority to require lower-RVP gasoline blendstocks, thereby reducing volatility across the board and removing the refi ning industry’s last excuse for achieving the renewable volume requirements mandated by Congress, while at the same time assuring even greater reductions in urban ozone formation.

An analysis completed for RFA in June 2015 evaluated a range of scenarios to determine the cost of lowering the RVP by 1 psi during the summertime. The most robust methodology found that removing the waiver would add 2 cents per gallon for refi ners. Sales of summer conventional gasoline represent approximately 20 to 25 percent of total annual gasoline sales. Thus, when spread across total annual gasoline production, the refi ning cost impact of a 1-psi RVP reduction would be just six-tenths of one cent per gallon.

There also are emission benefi ts from removing the 1-psi RVP waiver. Modeling conducted by Air Improvement Resource, using EPA’s MOVES2014 tool, found that elimination of the waiver would reduce carbon monoxide emissions by nearly 16,000 tons per month in the summertime, nitrogen oxide emissions by more than 700 tons per month and volatile organic compounds by approximately 1,850 tons per month. The economic value of these emissions reductions alone would offset any negligible increase in refi ning costs.

RFA will continue to pursue any and all avenues to getting this situation resolved, including legislation, and we look forward to soon seeing E15 at your local gas station in the summer and year-round.

Barbecues, Beaches and E15? You Bet By Bob Dinneen

VIEW FROM THE HILL

Author: Bob DinneenPresident and CEO,

Renewable Fuels Association202-289-3835

Page 11: 2016 May Ethanol Producer Magazine

solenis.com/ethanol

2015

At Solenis, we are committed to helping you stay ahead of the curve. Whether you need to increase your yields, meet a regulatory requirement or reduceyour costs, we’ve got you covered.

Antibiotic-free fermentation aids

2009Corn oil

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Process AidsWater Treatment ChemistriesMonitoring and Control Systems

Page 12: 2016 May Ethanol Producer Magazine

12 | Ethanol Producer Magazine | MAY 2016

The renewable fuel standard (RFS) is the most successful energy policy our nation has seen in the last 40 years. It has created almost 400,000 jobs and contributed nearly $44 billion to the nation’s gross domestic product.

The RFS works, plain and simple. We are expecting the U.S. EPA to release its renewable volume

obligation (RVO) proposal for 2017 by early June. In light of the last RVO proposals for 2014, 2015 and 2016, it is important that we weigh in and voice our support for the RVO to be set at statutory levels as Congress initially intended.

As EPA Administrator Gina McCarthy said in her address at Growth Energy’s Advocacy Conference in 2015, “The United States is the world’s largest producer and consumer of biofuels…So EPA’s proposal has to continue to build on that success. And to spur ambitious, yet achievable growth…EPA is working hard to make sure that the Renewable Fuel Standard program is actually moving towards the levels that Congress intended. I want you to know that that is my job. I understand that.”

We made progress with the last RVO rule by piercing the blend wall, but still fell short of statutory levels. It is important that we share the positive story of ethanol and what the RFS can do to add more chapters to that story. Industry insiders know fi rsthand the benefi ts of a strong RFS, but it is incumbent upon us to not only defend the policy, but also proactively show the public why a strong RFS is good for our entire nation.

To support the RFS, the RVO must be set at statutory levels to further break down the blend wall and facilitate a more widespread transition toward E15, creating up to an additional 136,000 jobs. Every additional drop of ethanol in our tanks means there are fewer harmful chemical emissions in the air we breathe, and fewer

pollutants in our water supply. Americans now are more aware than ever that many of the resources we take for granted on this planet are fi nite, and we must do all we can to preserve and protect them.

First-generation ethanol can reduce greenhouse gases by an average of 34 percent compared to gasoline. Furthermore, ethanol production is becoming more effi cient by the year, using less water, land and energy to make fuel. At the same time, advanced biofuels like cellulosic ethanol continue to develop and are expected to reduce greenhouse gas emissions by 100 percent or more. Just this year, a USDA report showed that ethanol is more energy effi cient to produce than conventional gasoline. For example, every Btu put into creating ethanol yields a return of 2.3 Btu nationally, and a 4:1 return in parts of the Midwest. Setting the RVO at statutory levels and enforcing the RFS as Congress intended is a win for the environment, for farmers and the American people. It is time for a 21st-century fuel for 21st-century vehicles.

The ethanol industry is strong, and it is important to this country. The RFS is something we must continue to defend so we can reach our goals of seeing the RVO set at statutory levels.

Big Oil has had its time in the sun, but after 103 years of government subsidies, it is time for it to stand on its own, just as the biofuels industry has done. The American people deserve a choice of high performance, low cost, cleaner burning fuels at the pump. They deserve to have our energy security strengthened and our dependence on foreign oil ended. Most of all, they deserve an earth-friendly fuel that helps improve our environment now and for future generations to come.

Author: Tom Buis

Co-chairman, Growth Energy202-545-4000

[email protected]

DRIVE

Implement RFS As Congress IntendedBy Tom Buis

Page 13: 2016 May Ethanol Producer Magazine

2012

2013

2015

2016

TransFerm® introduced under the MGT Technology Platform

TransFerm Yield+ introducedreduce glycerol/increase yield/reduce GA enzyme purchases

64 U.S. plants utilizing MGT Technology

Over 7 billion gallons of ethanol produced to date

In 2012, Lallemand Biofuels & Distilled Spirits and Mascoma LLC introduced a revolutionary yeast platform that would mark the beginning of a new era for fuel ethanol production.

MGT Technology is the principle behind TransFerm Yield+, an advanced strain of Saccharomyces cerevisiae yeast that is bioengineered to provide substantial benefits and increase ethanol yield. In a short time, TransFerm Yield+ has raised fermentation efficiency standards to a level conventional yeasts simply can’t match.

This is just one example of the ingenuity and drive for innovation that makes Lallemand Biofuels & Distilled Spirits the global leader in ethanol fermentation advancements.

Contact us today at +1-866-342-7026 or www.lbds.com.

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And we’re just getting started

2014

Page 14: 2016 May Ethanol Producer Magazine

14 | Ethanol Producer Magazine | MAY 2016

E15 Today, High-Octane E25 Tomorrow By Brian Jennings

One of the things that makes the American Coalition for Ethanol unique is our work alongside retailers and gas station owners to increase sales of E15 and fl ex fuels. Our senior vice president, Ron Lamberty, has nearly 30 years of experience with wholesale and retail fuel markets; he operated convenience stores for large chains, ran his own gas stations and worked with companies on branded supply agreements. Most importantly, Ron can explain the advantages of E15 and fl ex fuels to station owners in terms they understand.

We’ve recently intensifi ed ACE’s outreach to fuel marketers through a new paid advertising campaign, called Flex Fuel Forward, featuring other people like Ron, station owners from around the country who have “been there, done that” when it comes to adding E15 and fl ex fuels. When fuel marketers look for information about new products, the sources they trust most are other marketers.

The Flex Fuel Forward campaign introduces station owners to other marketers who added E15 and fl ex fuels to their product mix. Their real-world results show that the rewards have been higher volume, more customers, better margins and higher profi ts. Our campaign provides educational materials to station owners and connects them with their peers who can explain why making the move to E15 or E85 helped them gain more customers and edge out the competition.

The campaign includes how-to videos and paid ads in the major print and Web-based news outlets station owners depend upon to keep up with their industry. Ultimately, the campaign is designed to put fuel marketers who have made the switch to E15 and fl ex fuels in a position to communicate with other station owners that the advantages far outweigh the costs—that the move to sell E15 to customers makes business sense.

ACE is focusing on E15 for important reasons. First, 70 percent of consumers say they buy the least expensive fuel when they fi ll up. Most of the time that will be E15. Second, implementation of E15

will require Underwriters Laboratories standardized infrastructure that can handle any blend up to 25 percent ethanol. In other words, the UL listing for E15-compatible dispensers actually allows the pump to dispense all the way up to 25 percent ethanol. That’s important because ACE and others are talking with automakers about a not-too-distant future where a high-octane fuel (maybe 97 or 98 RON) will be necessary to help them comply with fuel economy and greenhouse gas emissions rules.

Automakers are changing the internal combustion engine—downsizing the motor, adding turbocharging, increasing the compression ratio. Making these changes requires a higher octane fuel which runs more effi ciently than today’s fuel. It is widely expected that one way to make this new, high-octane, highly effi cient fuel will be to add ethanol to today’s base E10 resulting in a consumer-ready fuel that contains approximately 25 percent ethanol. Automakers have expressed concerns about whether the retail infrastructure will be in place to dispense this future fuel, and we are able to show them that the so-called “E15 pump” today is capable of being an E25 pump tomorrow. For the ethanol industry, E15 represents a high-volume market today, and E25 promises to be an even bigger, higher-value, high-octane market moving forward.

While a lot of resources have gone into paying retailers to add equipment to store and dispense E15 or E85, ultimately, if we don’t help station owners understand that adding ethanol is a smart business move, it won’t matter. Ethanol producers didn’t add corn oil extraction to their plants because someone paid them to do it. Producers added corn oil extraction because they did the math and understood the investment was well worth the cost. The same is true for gas station owners.

The work ACE does to help them do the math and to understand the investment in E15 and fl ex fuels makes money isn’t glamorous work, but it is necessary and we’ll continue to make it a priority.

Author: Brian JenningsExecutive Vice President

American Coalition for Ethanol605-334-3381

[email protected]

GRASSROOTS VOICE

Page 15: 2016 May Ethanol Producer Magazine
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16 | Ethanol Producer Magazine | MAY 2016

EU Must Increase Ethanol Use to Meet TargetsBy Robert Wright

Europe’s renewable energy strategy, adopted in 2009, calls for 20 percent of the EU’s energy to be derived from renewable sources by 2020, with a subtarget of a minimum 10 percent renewables in the transport sector.Eligible renewable sources include biofuels, renewable hydrogen, renewable electricity and other sources, such as biogas. As a result, the Renewable Energy Directive has become a central pillar of Europe’s biofuels policy. With Europe’s transport sector 95 percent reliant on oil, this policy, depending on its implementation at the national level, could have a signifi cant benefi cial impact on increasing the use of renewable energy and reducing emissions.

Last year, the RED and Fuel Quality Directive were amended to address emissions associated with indirect land use change (ILUC), limiting crop-based biofuels to 7 percent of the fi nal transport energy in 2020. The remaining 3 percent are to come from alternatives: biofuels from used cooking oil and animal fats (double counted); renewable electricity in rail (counted 2.5 times); renewable electricity in electric vehicles (counted 5 times); and advanced biofuels (double counted and with an indicative half percent subtarget).

All member states have complied with the obligation to transpose the original RED. However, the European Commission has brought cases against Poland and Spain for failure to properly implement sustainability criteria. So far, no member has transposed the ILUC amendments, although Spain has partially done so with the introduction of a cap of 7 percent on crop-based biofuels.

Most member states are assessing their individual options for meeting the RED target and ILUC directive, analyzing ways to easily and cost effectively reach the target, incorporating local fuel market conditions and biofuel production. Signifi cant differences between member states are anticipated, which may further decrease the level of harmonization and negatively affect the internal market for biofuels in Europe.

Progress towards the RED’s 10 percent target for renewables in transport has been mixed. In its 2015 Renewable Energy Progress Report, the EC reported a collective share for renewables in 2014 of 5.7 percent in transport. Thus, achieving the RED subtarget for 10 percent renewable energy use in transport will be “challenging but feasible.”

Renewable energy use in transport in all 28 EU members has been much less than projected in their National Renewable Energy Action Plans, with the gap widening. Transport consumption levels are 26 percent lower than forecast. In the case of fuel ethanol, the actual consumption has remained relatively fl at, in clear contrast with the forecasted increase, as shown in the chart.

There is an urgent need for full and quick implementation of the ILUC directive and the roll out of higher biofuels blends by member states. In 2014, the overall incorporation rate of ethanol in the EU petrol pool was only 3.3 percent. This level must be raised if the member states are to reach the 10 percent target.

Given the great disparity between what member states forecasted and their actual use of renewables in transport, the EC should take remedial action against those who have deviated signifi cantly. The EU ethanol industry needs guidance and long-term and stable rules to enable us to provide the needed biofuel volumes, both conventional and advanced. There is a clear need to build on the lessons learned so far when developing Europe’s post-2020 decarbonisation framework for transport. The EC needs to ensure members deliver on their renewable energy commitments in a timely manner.

Author: Robert WrightSecretary General,

ePURE, the European Renewable Ethanol Association [email protected]

GLOBAL SCENE

SOURCE: NREAPS (2009, 2011); MEMBER STATES PROGRESS REPORTS (2011, 2013, 2016); EUROSTAT

Page 17: 2016 May Ethanol Producer Magazine
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18 | Ethanol Producer Magazine | MAY 2016

Warren Preston has been selected to serve as USDA deputy chief economist. He has served as senior economist for agricultural policy in the Offi ce of the Chief Econ-omist since August 2015, after serving as USDA’s acting deputy chief economist beginning in February 2015. He joined USDA in 1992. In his new role, Preston will advise the chief economist, the secretary and top policy offi cials regarding the economic implications of programs, regulations and legislative proposals af-fecting the U.S. food and fi ber system and rural areas. He supports USDA policy deci-sion making by evaluating policy options on complex domestic and global agricul-tural issues and serves as the backup to the chief economist.

ACE Group has launched ACE Re-

newable Energy Environmental Protection, the fi rst dedicated environmental policy for companies in the renewable energy industry in the U.K. and Ireland, as ACE continues to invest in its environmental risk capabilities. ACE Renewable Energy Environmental Protection covers the full spectrum of envi-ronmental risks faced by renewable energy companies, providing seamless coverage. It is available to energy producers in every renewable sector, including solar, onshore and off shore wind, tidal, hydro, waste-to-energy, biofuel and landfi ll gas extraction.

Th e Department of Energy’s Joint Bioenergy Institute has announced Ai-ndrila Mukhopadhyay will step into the role of vice president of the Fuels Synthesis Division. Mukhopadhyay, who joined the Lawrence Berkeley National Laboratory in 2003, will continue to serve as director of JBEI’s Host Engineering group and as in-terim division director of LBNL’s Biologi-cal Systems and Engineering in the Biosci-ences Area. She leads a team responsible for the study of signaling and stress response in both environmental and engineered organ-isms. Her research focus at JBEI is the de-

velopment of robust microbial strains that show high tolerance and productivity dur-ing biofuels and chemicals production. Her team has conducted many discovery, strain engineering and systems biology studies to explore the causes of growth inhibition and low productivity, and has developed strate-gies to improve these phenotypes. With her team, she has published numerous research papers and holds patents on the use and optimization of cellular transport system to improve tolerance to fi nal products as well as improve intake of carbon sources. Taek Soon Lee has been named deputy vice president of the Fuels Synthesis Divi-sion, a position previously held by Mukho-padhyay. Lee joined Jay Keasling’s group at UC Berkeley and LBNL as a postdoctoral researcher in 2006, and since 2008 Lee has served as director of metabolic engineering in the Fuels Synthesis Division at JBEI. His research group focuses on the identifi cation of potential drop-in biofuels and building and optimizing the metabolic pathways to produce these target fuels in microbes.

Novozymes has announced the for-mation of three divisions: Household Care and Technical Industries, Agriculture and Bioenergy, and Food and Beverages. Th e organizational change aims to enhance the company’s ability to deliver more innova-tion to customers with more speed and commercial impact. Each division will be led by a newly named executive vice presi-dent. Th ey are: Agriculture and Bioenergy, Tina Sejersgård Fanø, formerly vice presi-dent of sales; Household Care and Techni-cal Industries, Anders Lund, formerly vice president of sales; and Food and Beverages, Andrew Fordyce, formerly vice president of Business Operations.

Th e divisions will be supported by one central Research, Innovation and Sup-ply organization led by Th omas Videbæk, chief operating offi cer and executive vice president. Benny D. Loft, chief fi nancial offi cer and executive vice president, is head of Corporate Functions, and Peder Holk Nielsen will continue as CEO and presi-dent.

BUSINESS BRIEFSPeople, Partnerships & Deals

Preston

Page 19: 2016 May Ethanol Producer Magazine

MAY 2016 | Ethanol Producer Magazine | 19

Deinove recently announced it has received 10 new patent grant agreements. Patent family PF7: “Bacteria and uses thereof” received an initial agreement for issuance by the U.S. Patent Offi ce. Th e pat-ent protects the production of compounds such as ethanol, proteins, enzymes or drugs from Deinococcus bacteria. Th e company has also obtained new grant agreements for fi ve families of patents already issued in other geographical areas. Th e Deinove patent portfolio now includes 19 patent families protecting its technology plat-forms, development of selection methods for a wide variety of Deinococcus and re-lated bacteria, their use in the production processes of various biobased products of interest, and their industrial applications.

Trevor Morgan has

joined the Phibro Etha-nol Performance Group as a technical sales repre-sentative, bringing 20 years of experience in operations, production management, technical sales, new technology development and engineering to the position. Th e addition of Morgan continues Phibro EPG’s com-mitment to invest in the highest quality team in order to deliver technically sound support to help customers increase profi ts.

Auto industry veteran Tracey King has

joined the Renewable Fuels Association as the organization’s new technical director. King will serve as the RFA’s top liaison to the automakers, and will focus on forging the path to future high-octane fuels and op-timized spark-ignition engines. King spent 17 years with Chrysler, where she primar-ily focused on technical issues surrounding fuels and lubricants. Previously, she worked in research and development at both Nissan and General Motors. Most recently, King worked for Haltermann Solutions, a manu-

facturer of test and reference fuels. She also has extensive experience with ASTM and other standards-developing organizations.

Biofuel consultant

Bernie Hoff man has joined K·Coe Isom, an agriculture and biofuels accounting and consult-ing fi rm. Hoff man is a petroleum engineer with a depth of knowledge in biofuels technologies, upgrades and expansions, product diver-sifi cation, carbon intensity issues, profi t-ability enhancement, or even exit. He has three decades of experience in the ethanol and biomass-based diesel industries and has held numerous leadership positions, including his most recent role as vice presi-dent of WB Services. In addition to work-ing with the K·Coe Isom team in the ar-eas above, Hoff man will head the business development eff ort and consult with plants on mergers and acquisition opportunities, feasibility evaluations, and sustainability ef-forts. His work complements K·Coe Isom’s sustainability-related service off erings that signifi cantly expanded with the fi rm’s ac-quisition in 2013 of Vela Environmental.

Biofuels industry veteran journalist Rachel Gantz has joined the Renewable Fuels Association as the organization’s new communications director. Gantz will serve as the RFA’s spokesperson, communicat-ing the group’s top messages to reporters, and will focus on growing RFA’s footprint in the media. Gantz spent nearly 17 years as a reporter, most recently at Oil Price In-formation Service, where she was a senior reporter covering the biofuels industry. She also worked at Hart Energy Publishing’s Oxy Fuel News, and Argus Air Daily, cov-ering the biofuels and air emissions indus-tries.

SHARE YOUR INDUSTRY NEWS: To be included in the Business Briefs, send information (including photos and logos, if avail-able) to Business Briefs, Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also email information to [email protected]. Please include your name and telephone number.

BUSINESS BRIEFS¦

Morgan

Hoff man

Page 20: 2016 May Ethanol Producer Magazine

20 | Ethanol Producer Magazine | MAY 2016

March 21—The U.S. is awash with natural gas. Mild tempera-tures diminished the need to tap into underground storage to meet heating demand

For most of the winter, the market did not anticipate stor-age levels fi nishing the season above the 2012 record of 2,369 Bcf. That year featured the warmest March on record, contributing to a tepid fi nish to withdrawal season and an early onset of net injec-tions. However, as forecasts for the fi rst half of March 2016 began to show widespread warmer-than-normal anomalies, it became ap-parent that a new end-of-winter storage record above 2.4 Tcf was in the works.

Already depressed prices responded by tanking even lower. The March 2016 NYMEX natural gas contract rolled off the board at $1.71 per MMBtu—the lowest futures contract expiration since March 1999. This rounded out the winter 2015-’16 NYMEX strip at an average expiration price of just $2.10 per MMBtu, completing the least expensive winter strip since the late ’90s. The prompt-month continuation continued downward through the fi rst week of March to 17-plus year lows just above $1.60 per MMBtu. How-

ever, buyers began to enter into the marketplace from that level, driving the forward pricing structure steadily higher during the next two weeks.

The focus will shift fi rmly toward the injection season and whether structural shifts in the supply-demand balance will be enough to keep storage from reaching capacity this fall. The EIA estimates natural gas capacity just above 4.3 Tcf. From a starting point in April above 2.4 Tcf, if weekly injections keep pace with the previous summer, this capacity would be exceeded in early Sep-tember.

The closest parallel was in 2012. The market entered that sum-mer with the same concerns about fi lling storage capacity. How-ever, those concerns proved to be unfounded.

This year, the factors that could combine to help prevent full storage include fl at to falling domestic production, coal retirements and fuel switching in the power generation sector. Price direction will be greatly dependent on whether or not these factors will be enough to help the natural gas market fi nd more balance this sum-mer.

Natural Gas Report

Corn Report

March 21—During March, the market has been in short cover-ing mode causing a little ‘madness.’ This short covering has been met with moderate farmer selling and has allowed the cash market to stabilize.

The March USDA report did not offer any revelations. The U.S. corn balance table remained unchanged with a carryout of 1.837 billion bushels. Global corn carryout declined from 208.8 mmt to 206.97 mmt as a result of lower beginning stocks in many production areas and a slight decrease in South African corn pro-duction. Argentina and Brazil corn exports are expected to be 17 and 28 mmt, respectively, compared with 18.5 and 34.45 mmt a year ago. China increased its corn carryout in November 2015. China’s 2016 corn carry-in is 100.46 mmt vs. 81.32 mmt a year ago which helped increase total world carryout.

The market is waiting for the March 31 planting and stocks reports. Acreage will have an impact on new crop with stocks hav-ing an immediate effect on old crop. Much of the trade is expecting to see an additional 1 to 2 million acres of corn with some analysts looking for 2.5 million more planted acres. The chart shown uses 90.5 million acres. Ultimately it seems with a large carry-in and an

average yield this year, the U.S. could be on its way to comfortable carryout levels for three straight years. Any weather issues will gen-erate volatility. Any signifi cant rallies in corn should lead to active producer selling, adding pressure to the cash corn market.

Warm winter weather leaves robust natural gas supplies by Andy Huenefeld

Corn market catches a bit of March Madness by Jason Sagebiel

COMMODITIES Prices & Market Analyses

Comments in this column are market commentary and are not to be construed as market advice.

Page 21: 2016 May Ethanol Producer Magazine

MAY 2016 | Ethanol Producer Magazine | 21

DDGS Report

Ethanol Report

March 21—Throughout March, etha-nol futures were stable, moving within a narrow price range. Ethanol futures have fol-lowed a lightly traded and stable corn market in which inventory levels and production ca-pacity led to a nearly fl at market.

Unlike the ethanol market, the RBOB gasoline market surged in late March. RBOB gasoline was trading at $1.46 per gallon com-pared to February when prices were trading near 90 cents per gallon. The rally in RBOB gasoline affected the price relationship be-tween the RBOB gasoline and ethanol mar-kets.

Ethanol prices have traded at a pre-mium to the RBOB gasoline complex since August 2015, and through most of January and February were carrying a 30- to 50-cent

premium to the RBOB gasoline market. That changed in March when traders moved the focus to upcoming summer demand for gasoline and pushed gasoline prices sharply higher from previous levels. Ethanol markets have remained stable, hovering within a nar-row trading range.

With the spring and summer driving season still young, there is expected to be ad-ditional market support developing through the RBOB gasoline market during the next several weeks, although it is likely that prices may have established a more defi ned trading range. Inventory and production levels of ethanol and gasoline products remain strong, which may limit price surges long term, put-ting the emphasis on short-term demand and the need to quickly meet that demand.

March 21—DDGS prices have been dropping as warmer weather affects U.S. demand, and Chinese demand has slowed in anticipation of an impending antidump-ing tariff. Even though nothing has been announced in the Chinese dumping case, DDGS exports to China have dropped from more than 1 million metric tons (mmt) in August to less than 300,000 tons in January. Chinese importers still are wary of having shipments that are not yet through customs if tariffs are announced. Others are waiting until their inbound pipeline is nearly empty in hopes of pur-chasing distressed product.

Demand from Mexico continues to be robust, but domestic U.S. demand is fall-ing as prices of other protein meals pres-sure the DDGS market. In general, distill-

ers grains are below 100 percent the value of local corn, which generally creates some demand. Milder spring weather has tem-pered buying, and feeding margins are too tight for buyers to want to buy ahead, so demand has stayed hand to mouth. Barge prices have dropped as the river opens and tons that typically would have headed to the Chinese container markets move that direction.

Looking ahead, there will be a decent amount of spring ethanol plant main-tenance in April, which should stabilize falling prices. U.S. planting conditions and South American currencies and crops quality also will infl uence futures and cash prices. With so many infl uencing factors outside of the United States, it looks to be a volatile spring.

Regional Ethanol Prices ($/gallon)Front Month Futures (AC) $1.425Region Spot RackWest Coast 1.550 1.600 Midwest 1.370 1.590 East Coast 1.450 1.720

SOURCE: DTN

Regional Gasoline Prices ($/gallon)Front Month Futures Price (RBOB) $1.46Region Spot RackWest Coast 1.595 1.459Midwest 1.315 1.523East Coast 1.210 1.565

SOURCE: DTN

DDGS Prices ($/ton)LOCATION May 2016 Apr 2016 May 2015Minnesota 115 120 180Chicago 135 140 210Buffalo, N.Y. 140 145 205Central Calif. 179 187 246Central Fla. 155 162 226

SOURCE: CHS INC.

Corn Futures Prices (May Futures)Date close, bu. close, tonMar 21, 2016 3.695 131.964Feb 22, 2016 3.723 132.946Mar 20, 2015 3.850 137.500

SOURCE: FCSTONE

Cash Sorghum ($/bushel)Location Mar 18,

2016Feb 19,

2016Mar 24,

2015Superior, Neb. 3.07 3.16 4.68Beatrice, Neb. 3.11 3.15 4.23Sublette, Kan. 2.97 2.99 4.44Salina, Kan. 3.36 3.28 5.03Triangle, Texas 2.97 3.11 4.08Gulf, Texas 4.12 4.23 5.88

SOURCE: SORGHUM SYNERGIES

Natural Gas Prices ($/MMBtu)LOCATION Mar 22,

2016Jan 29,

2016Mar 23,

2015NYMEX 1.863 2.298 2.798NNG Ventura 1.820 2.070 2.700Calif. Citygate 1.855 2.250 2.520

SOURCE: U.S. ENERGY SERVICES INC.

U.S. Ethanol Production (1,000 barrels)Per Day Month End Stocks

Dec 2015 1,002 31,075 21,438Nov 2015 986 29,594 19,945Dec 2014 995 30,831 18,739

SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION

Spring DDGS market likely to be volatile

by Sean Broderick

Ethanol premium evaporates as gasoline prices surge

by Rick Kment

Page 22: 2016 May Ethanol Producer Magazine

22 | Ethanol Producer Magazine | MAY 2016

Illinois

Nebraska

NewMexico

YorkRavenna

Portales

RavennaMount Vernon

Abenoga Bioenergy U.S. first-generation ethanol plant locations

DISTILLEDEthanol News & Trends

Mid American Agri Products-Wheatland LLC, a small-scale ethanol plant located near Madrid, Nebraska, has installed Edeniq Inc.’s Cellunator technology and is considering the next step, licensing the company’s Pathway Tech-nology, which enables cellulosic ethanol produc-tion from corn kernel fi ber.

The plant was built with a nameplate ca-pacity of 44 MMgy but currently operates at 48 MMgy, Robert Lundeen, CEO of MAAPW, said, noting that adding the Cellunator technology is expected to increase the facility’s conversion rates by 2 to 4 percent. “We selected Edeniq’s Cellunator technology because of its proven track record at accessing residual starch and its ability to also pretreat corn kernel fi ber to enable production of cellulosic ethanol at our plant,” he said.

If MAAPW takes the next step to produce cellulosic ethanol using Edeniq’s Pathway Tech-nology, the Cellunator equipment will be inte-grated with cellulase enzymes for fermentation of corn kernel fi ber. According to Edeniq, its Pathway Technology utilizes existing fermenta-tion and distillation equipment to produce up to 2.5 percent cellulosic ethanol and a 7 percent in-crease in overall ethanol yield.

Nebraska plant installs Edeniq Cellunator technology

Ocean Park Advisors predicts continuing consolidation of ethanol industry

Ocean Park Advisors is predicting con-tinued consolidation in the North American biofuels industry following the dramatic con-solidation seen last year. Moving into 2016, Ocean Park Advisors said signs are pointing to an even greater number of mergers and acquisitions.

“Our experience leads us to believe there will be an increased number of own-ers and boards of renewable fuel companies evaluating their options in 2016, if not test-ing the market for reasonable assessments of the value of their plants,” said Bruce Comer,

founder and managing director of the Los Angeles-based company.

Comer noted the ethanol industry is particularly ripe for consolidation, with 94 stand-alone plants that account for 5.3 bil-lion gallons, or 36 percent of domestic pro-duction. In addition, Agengoa has begun to market its fi rst-generation ethanol plants, in-cluding its six U.S. corn ethanol plants with a combined capacity of 381 MMgy. Archer Daniels Midland Co. has also announced a strategic review of its dry mill facilities.

Page 23: 2016 May Ethanol Producer Magazine

MAY 2016 | Ethanol Producer Magazine | 23

Missouri has joined the list of states where E15 is being sold. According to the Renewable Fuels Association, the fuel blend was expected to be sold at eight Kum & Go locations in the state by the end of March. More than 22 states now offer E15.

The offering of the fuel blend comes after RFA and the Missouri Corn Grow-ers Association were successful in chang-ing Missouri’s law that previously capped ethanol blends to 10 percent. Missouri currently allows up to 15 percent ethanol.

“We applaud Missouri for becom-ing the latest state to sell E15,” said RFA President and CEO Bob Dinneen. “We look forward to the fuel blend being sold across this country. All we need is EPA to reverse its current RVP regulations that creates an uneven playing fi eld for higher ethanol blends.”

EPA’s current Reid vapor pressure regulations grant a volatility waiver to E10, but not to any other ethanol blends.

Missouri stations off er E15 blends

U.S. distillers grains exports reached a record 12.56 million metric tons last year, up 11 percent from 2014, according to analysis released by the Renewable Fuels Association. When compared to 2009, dis-tillers grains exports more than doubled.

An estimated 34 percent of U.S. dis-tillers grains production was exported last year, up slightly from 32 percent in 2014 and 30 percent in 2013. The value of dis-tillers grains exports was $2.94 billion last year, down 1 percent from 2014. Export prices averaged $234 per metric ton in 2015, down 11 percent when compared to 2014.

According to the RFA, U.S. distillers grains were shipped to 45 countries on fi ve continents last year. China, Mexico, Viet-nam, South Korea and Canada were the top fi ve U.S. export markets, with China accounting for 50 percent of U.S. distill-ers grains exports, and Mexico 13 percent. Vietnam and South Korea each received 5 percent of U.S. distillers grains exports.

Record volume of distillers grains exported in 2015

DISTILLED

U.S. distillers grains exports

Year Million metric tons

2005 1.702006 1.252007 2.362008 4.532009 5.652010 9.012011 7.682012 7.422013 9.672014 11.282015 12.56SOURCE: RENEWABLE FUELS ASSOCIATION

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24 | Ethanol Producer Magazine | MAY 2016

DISTILLED

Comet Biorefi ning to locate fi rst plant in Ontario

Comet Biorefi ning Inc. has announced plans to construct a commercial-scale, bio-mass-derived sugar plant at the TransAlta Energy Park in Sarnia, Ontario. The 60-mil-lion-pound-per-year plant is expected to begin operations in 2018.

The facility will produce dextrose sugar from locally sourced corn stover and wheat straw.

Comet’s technology converts agricultural and forestry residues into dextrose sugars that can be processed into biobased products, including organic acids, amino acids and bio-plastics.

Comet chose to locate in Sarnia by work-ing together with Bioindustrial Innovation Canada, the Ontario Federation of Agricul-ture and an Ontario farmers’ cooperative on a project to attract sustainable technology pro-viders to the region and to meet increasing de-mand from chemical suppliers and consumers for low-carbon products.

Less than a month after Comet an-nounced the location of its proposed project, Sustainable Development Technology Can-ada awarded the project a CA$10.9 million ($8.2 million) grant.

Valero Energy Corp. has fi led with a peti-tion for reconsideration with the U.S. EPA, ask-ing it to revise its defi nition of “obligated party” under the renewable fuel standard (RFS). The company has also petitioned the U.S. Court of Appeals for the District of Columbia to review the agency’s recent RFS rulemaking to set re-newable volume obligations (RVOs) for 2014, 2015 and 2016, along with the 2017 RVO for biomass-based diesel.

According to information fi led with the court, the Valero is asking the EPA to reconsider defi ning obligated party as the entity that holds title to the gasoline or diesel fuel, immediately prior to transfer from the truck loading termi-nal or bulk terminal to a retail outlet, wholesale purchaser-consumer or ultimate consumer, as refl ected in the records maintained for federal excise tax purposes. According to the company, making this change will address supply con-straints on renewable fuel in the transportation fuel market that impede the market’s ability to respond to renewable fuel volume mandates

The RFS currently defi nes obligated party as a refi ner that produces gasoline or diesel with-in the 48 contiguous states or Hawaii, or any im-porter that imports gasoline or diesel into those same states.

Valero petitions EPA to redefi ne RFS defi nition of obligated party

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Page 25: 2016 May Ethanol Producer Magazine

MAY 2016 | Ethanol Producer Magazine | 25

A recent analysis conducted by the Renewable Fuels Association has deter-mined the net energy balance of corn-based ethanol at U.S. dry mill biorefi neries averages 2.6 to 2.8., an improvement over previous estimates that refl ects effi ciency gains. Net energy balance is a ratio of how much energy is required to produce corn and ethanol, and then transport the resulting fuel to end users.

The updated fi gures build on recent USDA fi ndings of a 2.1 to 2.3 net energy balance. According to the RFA, its analy-

sis uses more current dry mill energy use data than that used by the USDA.

According to RFA analysis, “[t]he energy balance of the top-performing quartile of biorefi neries is in the range of 3.2 to 3.4, which approaches the USDA estimate of 4.0 for an ideally situated dry mill producing wet distillers grains.”

The RFA analysis used dry mill en-ergy use data from two other widely re-spected fi ndings to support its results—Mueller & Kwik (2013) and Christianson & Associates (2016).

RFA analysis fi nds signifi cant increase in net energy balance

Michigan plant doubles capacity, adds CHP system

A 55 MMgy ethanol plant in Michigan owned by The Andersons is expanding its ca-pacity and adding a cogeneration system.

In March, ICM Inc. announced a con-tract with The Andersons Albion Ethanol LLC to design and build an expansion to its Albion, Michigan-based plant that will double the facility’s production capacity.

The dry mill corn ethanol plant, designed and built by ICM in 2006, was engineered for future expansion. According to ICM, the Albion plant is also adding a combined-heat-and-power system that will generate ap-proximately 7.5 MW of electricity. It will also produce steam for the existing and expanded ethanol plant.

“We’re thrilled to announce the expan-sion project at the Albion, Michigan, facility, and we look forward to continued collabora-tion with The Andersons to support the eco-nomic growth of the region by providing our process technologies and services to advance renewable energy,” said Chris Mitchell, presi-dent of ICM.

The expansion project is currently sched-uled to be complete in April 2017.

DISTILLED

Survey comparision USDA

Reference case (gallagher et al, 2016)

Mueller & Kwik (2013)

Christianson & Associates (2016)

Dry mills included in survey

18 84 ~60

Year of operational data surveyed

2008 2012 2015

Average thermal energy (Btu/gal) (LHV)

29,421 23,862 24,409

Average electricity (kWh/gal) 0.757 0.75 0.67

SOURCE: RENEWABLE FUELS ASSOCIATION

Page 26: 2016 May Ethanol Producer Magazine

26 | Ethanol Producer Magazine | MAY 2016

FUEL PLUS: Biodiesel plant manager Doug Roberts and Ray Baker, general manager, stand in front of Adkins Energy’s new biodiesel tank farm. PHOTO: DREIBELBIS-FAIRWEATHER

Page 27: 2016 May Ethanol Producer Magazine

MAY 2016 | Ethanol Producer Magazine | 27

Biodiesel tanks are popping up in the tank farms at some ethanol plants these days. By Keith Loria

Duel Fuel

COLOCATION

During the past decade, there has been a great deal of innovation and thought put into the syn-ergies between ethanol and biodiesel production, as plants share infrastructure and process essen-tials. Colocating biodiesel production at an ethanol plant also could be considered a good hedge for an ethanol plant, adding value to the corn oil produced and supplying a different segment of the fuel market.

For ethanol producers, it means greater diversifi cation and bet-ter fulfi llment of the renewable fuel standard’s (RFS) vision, bring-ing in revenue from biodiesel sales and D4 RIN generation (the renewable identifi cation numbers needed by obligated parties to demonstrate RFS compliance). Always looking for new opportuni-ties, the ethanol industry is keeping an eye on the fi rst adopters. In this issue, Ethanol Producer Magazine checks in on several projects.

WB Services recently completed a 2 MMgy biodiesel plant at Adkins Energy LLC in Lena, Illinois. “The biodiesel plant is adja-cent to Adkins’ ethanol plant and the two are integrated through several stretches of piping,” says Ray Baker, general manager at Ad-kins. “It is sized for a capacity of 2 MMgy per year, which is closely

Page 28: 2016 May Ethanol Producer Magazine

28 | Ethanol Producer Magazine | MAY 2016

TWO-WAY BIODIESEL: Adkins Energy’s biodiesel plant can choose between the traditional biodiesel process using chemicals and a new, enzymatic process. PHOTO: DREIBELBIS-FAIRWEATHER

matched to our corn oil output and local market demand for biodiesel.”

Adkins has been producing biodiesel for about one year, he says, running both a traditional chemical and new enzymatic process.

“Our operations team has really en-joyed working with the enzyme process since it has similarities to the ethanol pro-duction process,” Baker says. “We’ve had several start up challenges throughout the year, but have worked our way through

the majority of them. Our staff has done an excellent job transitioning to biodiesel production and they have been consistently improving output, yield and effi ciencies throughout this fi rst year.”

Issues solved during the fi rst year in-cluded optimizing methanol recovery and its transfer to ethanol operations and meet-ing guaranteed performance standards with the chemical process. Several combinations of equipment and procedural changes were made to improve the traditional process.

There are several advantages to coloca-tion, Baker says. “All of our biodiesel co-product and wash water streams are sent to the ethanol plant for processing. Through our ethanol operations, we are able to push our glycerin out to the distillers grains, our unused methanol is sent through distilla-tion with our ethanol, and our remaining wash water is reused in the ethanol process. Our biodiesel coproducts are able to pro-vide strong returns through existing ethanol product lines without creating the need for new market development.”

WB Services installed both a traditional acid esterifi cation and base transesterifi ca-tion system and an enzymatic process—a newer technology in the biodiesel space. Having the ability to choose between two processes was a key reason Adkins chose the technologies.

“There are several reasons, but the main reason is to allow for operational fl exibility based on market and cost-of-production economics,” Baker says. “Using the enzymatic process eliminates the use and potential employee exposure to sulfu-ric acid, while also extending the life of the process equipment.”

WB Services has two other projects under construction, both 3 MMgy renew-able diesel plants at Kansas ethanol plants.

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MAY 2016 | Ethanol Producer Magazine | 29

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East Kansas Agri-Energy LLC was expect-ed to begin operations early this year and the project at Prairie Horizon Agri-Energy LLC is expected to wrap up in the second quarter.

Super JatrodieselLike WB Services, Ohio-based Jatro-

diesel is offering two technologies for bio-diesel production colocated with ethanol production. The company has built two plants that now are in production—Mid America Bio Energy, North Platte, Nebras-ka, and CHS-Patriot at Annawan, Illinois, says Raj Mosali, CEO. The MABE plant is using traditional biodiesel technologies with acid and base catalysts in a continuous pro-cess, while the CHS-Patriot facility is using Jatrodiesel’s trademarked Super technology, a continuous process with no catalyst.

“Both plants are working well and have met or exceeded our expectations in terms of quality, yields and volume,” Mosali says. “A typical biodiesel plant takes about three to fi ve months to ramp up to a consistently producing plant with concerted effort from the operators and management. The bio-diesel production process, like any chemical process, is a multistage process and needs staff that is qualifi ed and trained. Once the plant is at that point, especially a plant using

Super, it is a fairly hands-free operation and very robust.”

Colocation advantages are multifold, Mosali notes, and include feedstock avail-ability with no transportation cost, the abil-ity to use glycerin, the biodiesel byproduct, more profi tably and reduced costs from the sharing of utilities. He adds that operators are better prepped at a typical ethanol loca-tion than a stand-alone biodiesel plant.

The 5 MMgy plant at CHS-Patriot is the fi rst of its kind. Built next to the 130 MMgy CHS-Patriot plant, the multifeed-stock biodiesel plant can process up to 13,700 gallons per day.

Jatrodiesel’s Super technology is quite different from the traditional biodiesel pro-cess. Jatrodiesel describes its Super technol-ogy as a single-stage process that eliminates esterifi cation and transesterifi cation, and

RENEWABLE DIESEL: Patriot Energy had begun planning its renewable diesel project using Jatrodiesel technology when CHS Inc. purchased the plant, delaying completion by a few months. PHOTO: JATRODIESEL

Page 30: 2016 May Ethanol Producer Magazine

30 | Ethanol Producer Magazine | MAY 2016

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puts no limit on free fatty acid (FFA) levels in feedstock. It cuts the cost of traditional biodiesel refi ning by 25 to 28 percent, the company says, in part by eliminating the need for conventional catalysts.

Feedstock is mixed with methanol and is introduced into the Super column, which operates in a supercritical environ-ment. High temperatures and pressures are maintained in the continuous process and complete conversion takes place in minutes with minimal or no loss in yield, accord-ing to Jatrodiesel. The feedstock’s water content has no effect on the process. The mixture coming from the Super column is then sent through a separation process to isolate biodiesel from glycerin, and the ex-cess methanol is recovered. The biodiesel is then either water- or dry-washed to remove excess glycerin.

“Other than the operational savings, some of the other advantages are the ability to use oils up to 100 percent FFA; glycerin byproduct quality of 95 percent or higher, fetching higher price per pound; and a sim-plicity of operations, making it is easier to train operators. Process related issues are minimal,” Mosali says.

Getting Online“Patriot was interested in the technol-

ogy at a very early stage of its development. Once Jatrodiesel built a large pilot (300,000 gallons per year) at its facility in Miamis-burg, Ohio, and all the process parameters checked out well, Patriot showed interest in building the plant,” Mosali says.

“There is no precedence in the market for a plant using supercritical technology at these volumes. Due to this plant being the fi rst commercial implementation of the technology, we had to fi gure out quite a few things at a reasonable price—pumps, instrumentation, reactors, heat exchangers, condensers, boilers, automation, safety re-lated issues and piping.”

The majority of Jatrodiesel’s projects are turnkey projects, but for this one, it implemented on an engineering-only ba-sis. “We provided all drawings, engineering support, equipment specifi cations as well as quotes for all equipment, startup, training, HACCP (hazard analysis) support and post

METHANOL TEST: Adkins biodiesel manager Doug Roberts checks the proof of a methanol sample grabbed from the recovery system. PHOTO: DREIBELBIS-FAIRWEATHER

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MAY 2016 | Ethanol Producer Magazine | 31

startup support, etc., to reduce cost to build the plant,” Mosali says.

“We started testing instrumentation and check backs in February (2015) but then CHS bought Patriot. As with any new acquisition, CHS wanted the project, includ-ing the new plant, to conform to all their internal standards. The process delayed the startup by multiple months and eventually we went back into the startup mode in late 2015.”

As with any new technology commer-cialization, Jatrodiesel encountered a few issues, but fortunately they were small and fi xable.

“During the pilot phase we knew the operations would be simple compared to a traditional plant, and on a production ba-sis, when the fact was proved, it was very exciting,” Mosali says. “The system and the process is extremely stable. Due to the elim-ination of the catalyst, all the related pro-cess issues that plague traditional biodiesel plants are gone.

“If something goes wrong in a tradi-tional plant, usually the issues will multiply after that. In the case of Super process, the product is recoverable from any part of the process without any loss of yield and with minimal effort.”

The CHS plant is slated to use corn oil as its primary source of feedstock, but it will be able to process other feedstocks if, and when, CHS decides to use them, in-cluding used cooking oil, animal fats, yellow grease, brown grease, virgin oils, palm oil, coconut oil. Even algae can be processed when it is available in the future in larger volumes.

More plants using the new technology are under development, Mosali reports. Jat-rodiesel has just signed a Phase 1 contract with an ethanol producer for a second bio-diesel plant using its Super technology.

“We are going through Phase 1 of the process (permitting, etc.),” Mosali says, not-ing more details will be forthcoming. “We have multiple other ethanol plants that are interested and are in various stages of deci-sion process.”

One other biodiesel plant has come on-line in the past year. In Madrid, Nebraska, Mid American Agri Products-Wheatland

LLC developed its biodiesel technology in-house with the support of an Omaha en-gineering fi rm, explains Robert Lundeen, CEO of the 48 MMgy ethanol plant.

The 3 MMgy biodiesel plant was start-ed up in the third quarter of 2015 and has sold biodiesel, although the company is still fi ne-tuning operations. The company plans to ramp up or slow down biodiesel produc-tion depending on market conditions.

“There are times that we may want to make biodiesel with our corn oil and there

are times that it’s best for us to sell our corn oil to the feeding operations around,” Lun-deen says, noting that there is good demand from the local feed market for corn oil.

Author: Keith Loriafreelance writer

Contact Ethanol Producer Magazine with questions or comments about this article.

701-746-8385

COLOCATION

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How do low-oil, low-fi ber, high-protein coproducts successfully fi nd their best markets? By Susanne Retka Schill

NUTRITION

NEEDED:

An array of distillers grains coproducts are entering the market—low oil, low fi ber, high protein—with great po-tential. But animal nutritionists caution that fi nding the best and right market for the modifi ed coproducts isn’t as simple as it’s sometime made out to be.

“They’re all great coproducts, but very little R&D has gone into under-standing what their feeding value is going to be,” says Gerald Shurson, a Univer-sity of Minnesota swine nutritionist in St. Paul. “For some companies, it’s the commodity mentality—we’ll make it and they will buy it. And that’s not how it works.”

There’s room for more distillers grains in animal diets, says Alvaro Garcia, dairy nutritionist at South Dakota State University in Brookings, “but we have to be careful with products we put into the market. It takes so much work for some markets to accept distillers grains,” he says, adding that one bad shipment can destroy a market, particularly in new export markets.

Galen Erickson, beef nutritionist at the University of Nebraska in Lincoln, points to the rapid adoption of corn oil extraction. “I think that shined a nega-tive light on the industry because ethanol producers went ahead and did it, and really didn’t have any values determined on what the impact would be on the feeding side. That’s gotten people anxious about any other changes that come along.”

It is evident from discussions with the three animal nutritionists about what they have learned in their research on the changing coproducts that the impact varies by species.

Shurson still gets calls about the research he and Brian Kerr (USDA-ARS, Ames, Iowa) conducted a few years ago on the metabolizable energy value of

Species-Specific, Process-Specific Nutritional Profiles

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DDGS for growing pigs with a range of oil content between 4.9 and 13.2 percent. “Oil content, surprisingly, is a poor predictor of energy value in DDGS,” Shurson says. Fol-low-up trials verifi ed growth performance is not affected when feeding 40 percent DDGS diets containing 6, 10 or 14 percent

crude fat containing similar metabolizable energy content.

Garcia explains that in dairy rations, DDGS primarily contribute energy and protein. Reducing fat content means less energy. The difference with swine may re-sult from the pig’s ability to extract some

energy from the DDGS fi ber in the diges-tive tract, he suggests, a function shared with dairy but not poultry. “If dealing with poultry, you’re really limited in the amount you can include of distillers because the utilizable energy has been reduced quite signifi cantly,” he says, stressing the impact of low-oil DDGS in feed rations is species specifi c, and also will differ within species by stage of life.

High fat levels in dairy rations have been shown to reduce milkfat, for example, so some nutritionists argue that low-fat distillers should be benefi cial. But the real issue, Garcia notes, is knowing the levels and effects of the different fatty acids. Oil content varies from plant to plant and, with distillers typically piled and not segregated by different qualities, it can vary between shipments from a plant. It can be diffi cult for the feeder to know the actual value. “You don’t usually analyze distillers grains, because of the volumes going through the farm—by the time you test the shipment, you’re done with the feed.”

NUTRITION

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MAY 2016 | Ethanol Producer Magazine | 35

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The team at Nebraska has studied low-oil distillers effect in cattle rations. “It has decreased the energy value some and there’s a lot of debate on what that number should be,” Erickson says. In the past four years, the fi rst samples tested had little impact on

feeding value. “More recently, the more ag-gressive they seem to get [in removing oil], the bigger the impact. We’ve tried to stay ahead of that.”

Now, the Nebraska team is trying to an-ticipate the changes coming with new tech-

nologies that will alter other components, such as the fi ber and protein content. The 2016 Nebraska Beef Cattle Report shows the results of several feed trials attempting to isolate the contributions of solubles, pro-tein, fat and fi ber, compared to a diet of 40

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percent wet distillers grains (WDGS) and a control diet of dry-rolled corn. There were signifi cant improvements in both feedlot and carcass performance in the steers fed WDGS compared to dry-rolled corn, but none of the four DG components, alone, explained the energy value associated with wet distillers grains.

Erickson says feed trials like these are necessary to learn “what the cattle will tell us.” Earlier research, for example, found better results from beef cattle than initially

expected, with wet cake worth 130 to 135 percent the value of corn in feed rations for feeder cattle, while DDGS are closer to 110 percent.

Protein PuzzleThe complexities in establishing nu-

tritional value get even knottier when ex-amining protein. Many assume that higher protein distillers grains will be a welcome improvement, particularly because protein often is a higher priced feed component.

But the animal nutritionists caution it is not that simple.

Shurson points out swine nutritionists want to know digestible amino acid levels. “There is a poor relationship between lysine and crude protein content in corn, which re-mains when producing high protein DDG,” he says. “This means that we can’t assume that just because the protein content in DDG is increased, that it provides substan-tially more feeding value to pigs because the concentration of some of key amino acids does not increase proportionally.”

The situation is similar for poultry, Garcia says. A higher protein distillers grains product actually might have limited value because of the need to properly bal-ance the amino acids. “The more distillers grains you use, the more defi cient you will be in lysine, and the more you will have to supplement,” he says. Dairy and beef cattle, on the other hand, don’t require high pro-tein. “I don’t see so much of a benefi t from higher protein. It will all depend upon how much you pay for the amino acids you have to buy to balance the protein with.”

Erickson also says it is incorrect to claim higher protein levels always make a better feed. “I would argue the opposite for fi nishing cattle,” he says. “It doesn’t make it a better feed, it makes it a protein supple-ment.”

The protein equation demonstrates the challenge for an ethanol producer. “What’s good for swine or dairy isn’t always the best thing for beef cattle,” Erickson says. “It makes it very diffi cult, if you are a plant and marketing to all three, to make a blanket statement. It depends on which animal you are marketing the feed to.”

Another challenge facing the animal nutritionists is that the new batch of tech-nologies being deployed in the ethanol in-dustry is increasing the variability of distill-ers. “There’s no standardization of process at all,” Shurson says. “In fact, it’s becom-ing more diversifi ed among plants.” Shur-son says the ethanol industry needs to have good data in hand when introducing new coproducts to buyers.

Research NeedTwo types of research trials are need-

ed, Shurson says. One set of feed trials is

NUTRITION

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MAY 2016 | Ethanol Producer Magazine | 37

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needed to establish nutrients for accurate feed formulation. Swine researchers want to know the metabolizable energy value, di-gestible amino acid profi le and phosphorus content to properly formulate a ration for the second round of feed trials that mea-sure growth performance. “I want to make sure we’re not shorting the animals, which would provide bad results,” Shurson says. “And at the same time, I don’t want to be too conservative and underestimate digest-ible energy and nutrients because I would end up using more or not replacing as much as I could.”

According to the three nutritionists, well-designed feed trials can cost between $50,000 and $100,000. Garcia says that be-cause research funding is tight at universi-ties, it is much harder today than in 2002 and 2003 when he started doing feed tri-als, and the distillers grains was low-cost. “Now it’s very diffi cult to obtain funding to do some basic research on distillers grains, even though we have new product.”

Erickson credits the generous support from the Nebraska Corn Board for Ne-braska’s continued research. Without that funding, he estimates the university would likely be able to conduct one-tenth of the research. Likewise, Shurson credits the Minnesota Corn Research and Promotion Council and the National Pork Board for providing the majority of research funds for the studies he has conducted.

Besides having the data to fi nd the best use with the right species for new coprod-uct iterations, there is another incentive for the ethanol industry and its supporters to conduct more nutritional research.

Shurson points out that ingredient val-ues in the feed market were established on traditional nutritional measures that now are considered inaccurate for species like poultry and swine—things like total digest-ible nutrients, ash and crude protein, fat and fi ber.

Nutritionists now use more accurate nutritional values to calculate economi-cal rations. Shurson has given several pre-sentations to U.S. Grains Council audi-ences showing big value differences among DDGS samples from 144 sources when formulating swine diets. The value gap was greatest in swine grower-fi nisher diets,

where the actual economic value using the metabolizable energy, digestible amino ac-ids and phosphorus ranged between $195 and $289 per metric ton at a time when the value of DDGS in the spot market, which refl ects the traditional pricing measures of crude protein, fat and fi ber, was $182 per metric ton.

It will take time for market prices to refl ect real nutritional value. In the mean-time, ethanol producers introducing new or

altered coproducts will be well-served by getting the right data to help the new feeds fi nd the right market.

Author: Susanne Retka SchillManaging Editor, Ethanol Producer Magazine

[email protected]

NUTRITION

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Two companies gain traction in the quest to produce high-protein feed products from ethanol coproducts. By Holly Jessen and Kassidi Andres

Novita Nutrition and Nutrinsic Corp. approach pro-ducing high-value feed products from ethanol coproducts differently—Novita removes unsaturated fat from distill-ers grains while Nutrinsic targets the condensed syrup typically added to distillers grains. Both are targeting the ethanol industry as suppliers of the coproduct streams used to produce new nutritious feed products.

Novita, led by President and CEO Don Endres, is building its fi rst produc-tion facility in Aurora, South Dakota, with full operations expected to begin at the end of 2016. The company has developed a patented process to remove all of the unsaturated fat to improve the digestibility of distillers grains. The trademarked NovaMeal will be pelletized and initially marketed to the dairy industry. Distillers grains will be transported to the facility, primarily by truck from ethanol plants within a 100-mile radius, but also via rail. The facility in Aurora will receive about 1,300 tons of distillers grains daily, producing about 1,200 tons of NovaMeal and 100 tons of corn oil. The corn oil will be mar-keted initially as poultry feed while other markets are explored, including corn oil as a biodiesel feedstock.

NovaMeal is a cost-effective and highly-digestible feed product and will create new demand in new markets for distillers grains, Endres says, noting that he believes the product will do well internationally. “Once we get the fi rst plant up and running, we will be looking for additional locations across the Midwest. We are looking forward to proving out the product and expanding it.”

DIVERSIFICATION

A PUNCH Protein Packs

NEW-AGE FEEDS: Nutrinsic's ProFloc, shown here, and Novita's NovaMeal are two examples of animal feeds that can be produced by further processing ethanol plant coproducts. PHOTO: NUTRINSIC

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MAY 2016 | Ethanol Producer Magazine | 39

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Nutrinsic Nutrinsic’s product lines include feeds

with 50- and 60-plus protein content and a natural fertilizer coproduct with applications in commercial lawn, plant, greenhouse and retail lawn care products. The largest mar-kets for Nutrinsic’s trademarked feed prod-uct, ProFloc, are aquaculture, poultry, piglet and hog markets, in that order, says Dan Si-mon, president and CEO.

The feed product already is in produc-tion using process streams from breweries. The company’s patented process harnesses underutilized nutrient sources as a substrate to grow bacteria, which is separated, dried and packaged for sale. One plant in China has partnered with Anheuser-Busch since 2014 and construction is expected to be completed in June on Nutrinsic’s fi rst com-mercial plant in the U.S.—a facility in Ohio

built in partnership with MillerCoors.

The company is working to build addi-tional production facili-ties, Simon says. In the U.S., Nutrinsic is focus-ing on using condensed syrup from ethanol plants and glycerin from biodiesel plants as its feedstock for its bacteria-based feed prod-uct. Condensed syrup from ethanol plants is 10 to 15 times more concentrated than pro-cess streams from breweriess, which allows for larger feed production facilities, Simon notes.

The company is in negotiations with two potential ethanol plant partners, Simon says, and, it’s unknown whether the next fa-cility will be a joint venture with an ethanol plant partner or owned and operated by Nu-trinsic. He anticipates the company will have a signed agreement sometime this year and will start construction by January 2017.

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CONSTRUCTIVE DIGESTION: The Novita Aurora facility, expected to be completed by the end of the year, will process distillers grains to produce a highly digestible feed product. PHOTO: NOVITA

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DIVERSIFICATION

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MAY 2016 | Ethanol Producer Magazine | 41

Novita Evolution

Endres, known in the industry as cofounder and CEO of VeraSun Energy Corp., tells EPM that the idea for NovaMeal had its beginnings in 2005. Like others in the ethanol industry, he was studying the various nutritional components of distillers grains, which potentially have higher values when separated. “We set out to fi nd ways to monetize that additional value, and really focused on what we viewed as our best, highest value market—that being the high performing, lactating dairy cow,” he says. “She needs a lot of high-quality nu-trients, and of course, produces a very high level of milk as well. So we set out to un-derstand better why distillers grains was not being included at a higher inclusion rate in the diet.”

Research showed that corn oil, which is high in unsaturated fat, negatively impacts the rumen’s ability to break down fi ber and

produce amino acids and energy. In dairy cattle, that results in reduced milkfat levels. So, even though the economic model shows more distillers grains could be included in dairy cattle rations, it was not, primarily be-cause of unsaturated fats, he says.

Today, the company’s NovaMeal, which has had the corn oil removed, has gone through multiple university trials, with a few research papers published in the Journal of

Dairy Science. Meanwhile, full commercial dairy trials in California and the Midwest have been completed, both with good re-sults. Nick Vande Weerd, owner of Pleasant Dutch Dairy, where a feed trial was ongoing in March, told EPM they were very happy with the results so far. “We will defi nitely continue to use the product in our rations and look forward to their plant operating at full capacity.”

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PARTNERS: A ProFloc plant is colocated with a MillerCoors Brewery in Trenton, Ohio. PHOTO: NUTRINSIC

Endres

Page 42: 2016 May Ethanol Producer Magazine

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“We are entering a new era in the feed business where dairymen, and their nutri-tionists specifi cally, are not just looking at feed and its analytical value by nutrient, but they’re looking at absorption rates of indi-vidual amino acids,” Endres says, noting that understanding continues to evolve. “What we found with our product, once we’ve put

it through our process, is we are actually able to achieve a high level of available absorb-able amino acids in the intestinal tract. “So for dairy producers feeding a protein supple-ment, they’re looking to utilize more of the protein, and deliver it to the intestinal tract to improve effi ciency.”

Nutrinsic History More than 10 years ago, the founders of

Nutrinsic began with an idea that emerged from water and wastewater treatment using aerobic digestion, Simon says. Researchers developed a process to tailor the growth of certain bacteria with specifi c concentrations of protein. The original concept was to pro-duce feed and, eventually, with regulatory approval, a food product.

Simon, who has a background in the ethanol industry, was appointed leader of the organization at the end of last year. In the past, he served as cofounder, chief op-erating offi cer and executive vice president of Biofuel Energy Corp., which built the 115 MMgy ethanol plants in Wood River, Nebraska, and Fairmont, Minnesota, now owned and operated by Green Plains Inc.

With slight differences depending on the technology, a 100 MMgy ethanol plant produces about 100,000 tons per year of syrup. From his work in the ethanol indus-try, Simon understands the coproduct as an element of distillers grains. “We really had

BAGGED PROTEIN: ProFloc comes off the production line. Nutrinsic is already producing the feed product using syrup from breweries as a feedstock and is now in negotiations with two ethanol producers. PHOTO: NUTRINSIC

DIVERSIFICATION

Page 43: 2016 May Ethanol Producer Magazine

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more syrup than we knew what to do with and we would just throw it on our DDGS because we had no better use for it,” he says.

Essentially, ethanol producers could put only half of the syrup on their distillers grains, still get the color and other properties needed, and the other half would be avail-able to produce Nutrinsic’s protein product, he says. Using 50,000 tons of condensed syrup from an ethanol plant per year would produce about 30,000 tons of ProFloc, Nu-trinsic’s single-cell protein feed, Simon says, noting that the product could generate from $35 million to $50 million dollars in revenue. “So it’s a very high value product and it sup-ports the concept and evolution of an etha-nol plant becoming a biorefi nery,” he says.

Aquaculture is a large and fast growing market, with good opportunities for Pro-Floc. “The amino acids profi le is quite simi-lar to fi sh meal,” he says, noting that it’s a balanced feed, high in amino acids which are diffi cult to produce artifi cially. To date, the company has completed feed trials primar-ily in the aquaculture and hog markets, with

very good results. “In many trials, the fi sh and the piglets would eat as much as they could,” he says. “We actually had to control how much they ate.”

Fishmeal prices are volatile and move between $1,400 and $2,400 a ton. Long term, the goal is to sell ProFloc for similar prices. However, as was also the case when distillers grains was a newcomer in the feed

market, in the beginning ProFloc will be sold at a discount to fi shmeal, Simon says.

Author: Holly Jessen

Ethanol Producer Magazine Contributing author: Kassidi Andres, intern

LIVE TESTERS: Dairy cows eat NovaMeal, as part of a ration, at a dairy located near the Novita Aurora facility now under construction in South Dakota. PHOTO: NOVITA

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Nebraska’s Laurel Biocomposite produces biomaterials for thermoset applications. By Ann Bailey

Laurel Biocomposite LLC is using distillers grains to create bio-materials that will be used in lawn and gardening products across the United States this spring.

The Nebraska company, founded in 2007, moved into a new manufacturing plant in Laurel in 2013 and began converting distillers grains into a powder that can be used for ther-moset applications and master-batched pellets used in thermoplastic applications.

Last year, Laurel Biocomposite made im-provements to its 20,000-square-foot manufac-turing plant in Laurel. In addition to another production line, the company installed a lab ex-truder line, a small injection molding machine, testing equipment for physical properties and quality assurance equipment for verifying im-pact, tensile and fl exural strengths and melt fl ows.

Laurel Biocomposite manufactures three types of resins: Bio-Res PLA with 98 percent biobased content, Bio-Res PE with 62 percent biobased content and Bio-Res powder with 100 percent biobased content. Introduced in 2011, the company says the biomaterial is a cost-effective, environmentally friendly re-placement with better performance properties

in a variety of manufacturing processes than traditional petroleum-based resins.

In December 2015, Laurel Biocomposite earned the USDA certifi ed Biobased Product labels for its Bio-Res PLA, PPE and powder products. Products that meet the requirements of the BioPreferred program, created in the 2002 Farm Bill and expanded in 2008, are la-beled to be easily identifi ed by consumers with the intent of increasing use.

Laurel Biocomposite has a supply agree-ment for the distillers grains used in its BioRes products with Husker Ag LLC, Plainview, Ne-braska. Husker Ag uses more than 26 million bushels of corn annually to produce about 76 MMgy of ethanol, plus wet and dry distillers grains.

At full capacity, Laurel Biocomposite will use about 15,000 tons of dried distillers grains annually, says Tim Bearnes, the company’s CEO. Laurel Biocomposite has capacity to produce 50 million pounds of Bio-Res prod-ucts annually. The company markets its prod-ucts to the plastic industry, the third-largest manufacturing industry in the U.S.

Laurel Biocomposite’s biomaterials, such as BioRes powder, offer a viable option to con-ventional plastic materials, without sacrifi cing physical properties. The powder, for example,

replaces calcium carbonate in a sheet-molded or bulk-molded thermostat composite, at the same time cutting weight by up to 25 percent. That makes it especially suited for car and truck panel applications.

BioRes PLA products also can be injec-tion molded or extruded. The products are easy to mix with resins for agricultural and lawn and garden products. The sustainable Laurel Biocomposite material replaces as much as 20 to 40 percent of the plastic in a variety of man-ufacturing processes. The Bio-Res powder, for example, is a replacement for traditional min-eral fi llers. Bio-Res pellets and powders, mean-while, are available to its customers in master batches.

Consumer ProductsAlbany, Minnesota-based Master Mark,

uses Laurel BioRes PLA in its green-colored anchor pins used to hold down sod or land-scape fabric

“The advantage to having a stake made from Laurel’s product is the product can break down over time,” says Nick Scherping, Mas-ter Mark purchasing and materials manager. “Currently, if someone were to lay sod down and stake it down with metal, they would have to remove the pin from the sod weeks down

PROFILE

DG-Based ResinsS p r i n g i n t o P l a s t i c s

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MAY 2016 | Ethanol Producer Magazine | 45

the road or let it rust to where it falls apart.” Conventional plastic stakes also need to be removed or they would remain forever in the ground, Scherping says.

“With the Laurel material, the consumer doesn’t need to remove it from the ground, if they choose to. The product will break down without having to worry about polluting the soil with plastic or metal.”

The same is true for the fabric staking, Scherping says. “The fabric just needs to be staked down until there is a mulch or rock on top of the fabric,” he says. After that, the stake isn’t needed, and because the material in the Laurel Biocomposite product is biobased, it will break down over time. That means the homeowner won’t have to sift through the dirt next time they do landscaping to try and fi nd the stake.

In Stillwater, Minnesota, SelfEco is pro-ducing garden pots with built-in plant food that are made from Laurel Biocomposite Bio-Res PLA. The nutrients come from the distill-ers grains used to manufacture the resin, says Danny Mishek, SelfEco president and CEO.

“It has the right amount of nutrients and proteins to allow the plant roots to take in the nutrients,” Mishek says. SelfEco pots also benefi t the environment because they allow

gardeners to reduce the amount of fertilizer they use and because the pots eventually break down, Mishek says.

“The material has been certi-fi ed to be industrial compostable,” he says. Gardeners either can leave the pots in the ground to provide nutrients to the soil for the next gardening season or take what re-mains of the pots to an industrial compost center, Mishek says.

The SelfEco Pots will be available for sale this spring online and for limited sale at a handful of Minnesota garden centers, he says. This fall, the SelfEco pots will be rolled out to a larger distribution area for preorder for the 2017 gardening sea-son.

Laurel Biocomposite’s Bearnes says he is optimistic about the need for and desire of other companies to move to a more environ-mentally friendly source for their products. “We are doing things here to continue to de-velop new products and better meet the needs of the customers… It’s a huge, huge market and huge use of material we create,” he says.

Now, most plastic products end up in the landfi ll, he notes. Laurel Biocomposite

hopes to reduce that amount by increasing the amount of Bio-Resin products it sells to com-panies that will use them to create goods similar to the Master Mark anchor pins for sod and landscape plastic and the SelfEco Pots.

“We see that as a neat spot to be in,” Bearnes says.

Author: Ann BaileyAssociate Editor, Ethanol Producer Magazine

[email protected]

Page 46: 2016 May Ethanol Producer Magazine
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MAY 2016 | Ethanol Producer Magazine | 47

By Ann Bailey

PREVIEW

FEW: Bigger and Better Than Ever in its 32nd Year

It seems only fi tting that the 32nd annual Inter-national Fuel Ethanol Workshop and Expo will be held in Milwaukee’s Wisconsin Center, a building that boasts some of the world’s most attractive architec-ture and newest technology. After all, the event is sponsored by an industry that prides itself on using the latest technology to preserve the beauty of the environment by reducing carbon footprints across the globe.

The FEW, sponsored by Ethanol Producer Magazine and produced by BBI International, will be held in the Wisconsin Center in downtown Milwaukee June 20-23. Ethanol industry professionals from across the United States and around the world are expected to gather for the event that draws 2,000 men and women. Nearly 25 percent of the attendees will be ethanol producers who typically represent about 85 percent of U.S. production capacity. Forty-one states, Canada’s seven provinces and 33 countries were represented last year at the FEW, the largest and longest running ethanol event in the world. The United States’ robust ethanol

HOST CITY: The Wisconsin Center will house the 2016 FEW June 20-23.

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industry annually produces about 15 billion gallons valued at $44 billion.

This year will be the largest gathering of biofuel professionals and producers in 2016 with the National Advanced Biofuels Con-ference & Expo being colocated with the FEW. Targeted at industry professionals pro-ducing, deploying and developing advanced biofuels, the advanced biofuels conference will cover cellulosic ethanol, biodiesel and

biobased platform chemicals, polymers and other renewable molecules. All attendees of the FEW can attend the advanced biofuels tracks.

Another change this year is that cellu-losic and advanced ethanol panels, which in years past had been the fourth track of the FEW, will be part of the advanced biofuels conference. In its place, the fourth track of the FEW will cover infrastructure and mar-

ket development, two issues that are critical for the industry to realize the vision of 36 billion gallons in the renewable fuel standard.

The ethanol industry’s growth is predi-cated upon its ability to open market path-ways, and then leverage them in a way that will increase market share and move more gallons. In the new FEW track, infrastruc-ture and market development panels will be made up of industry professionals who work

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Page 49: 2016 May Ethanol Producer Magazine

MAY 2016 | Ethanol Producer Magazine | 49

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Buckman takes a wider view.

on this important job. It will feature presen-tations on the state of fl ex-fuel vehicles, mid-level blends and the practicality of E85 as a way to achieve near-term market growth.

A Sample of PanelsAmong the many presenters, Mike

O’Brien, vice president of market develop-ment at Growth Energy, will discuss “Grow-ing the Market: 10 million gallons of Po-

tential” during the “Our Next Step” in the Infrastructure and Market Development track.

Prime the Pump, a collective industry effort to bring E15 into the marketplace, tar-gets 20 top chains that represent more than 60,000 retail outlets. More than 200 locations in 23 states already sell E15 and, this year, 700 stores are prepared to launch the biofuel, says O’Brien. Initial sales average 12 to 15

percent at a given retail site. Retailers on this panel will talk about the competitive advan-tage E15 brings to their businesses and the choice it provides for their customers who are fueling up their vehicles.

While the Infrastructure and Market Development track is new this year to the FEW, the other three tracks—Production and Operation, Leadership and Financial Management and Coproducts and Product

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50 | Ethanol Producer Magazine | MAY 2016

Diversifi cation—remain the same, featuring presentations on a wide variety of topics.

The Production and Operations track, as the title implies, is aimed at industry professionals and focuses on plant optimi-zation, process control, advanced mainte-nance, compliance, quality control, safety and other areas of facility operations. Cat-egory topics include yield management, en-vironmental and regulatory compliance and maintenance.

A new face among presenters in the Productions and Operations track, Paul Cook, vice president, Painters USA Inc., will speak on “Protecting Your Infrastructure, the Capital Investment in Your Facility, and Compliance in the Ethanol Industry.” If not managed properly, the damaging effects of corrosion and environmental wear on steel and concrete surfaces can have a major fi -nancial and operations impact on ethanol facilities. Using the right coatings and prepa-ration processes lead to long-term savings in maintenance budgets and lengthen the life cycle of capital investments of ethanol pro-ducers, he says in his abstract. It is always more cost-effective to maintain tanks, pipe and piping racks, concrete and other exte-rior structures than to replace ones that have eroded.

Cook’s presentation will explain how protecting a plant’s infrastructure from

moisture and contaminants is vital to opera-tional effi ciency and look at how the imme-diate impact of a proper maintenance pro-gram has a fi nancial and practical purpose. A maintenance program also adds to the over-all safety of an ethanol plant, its employees and its surrounding community.

Paula Emberland, of ERI Solutions Inc., will join Cook in the panel looking at proactive measures for aging facilities. In her presentation, “Understanding Biointegrity,” she will discuss the importance of a com-prehensive mechanical integrity program for an ethanol plant that will help the facility to ensure regulatory compliance, continued plant effi ciency and reduced maintenance at plants as they age. The presentation will identify how ethanol plants, many of which are approaching 10 years old, can utilize a mechanical integrity program to identify as-set deterioration that results from daily op-erations and environmental conditions. The presentation will include information about ways in which internal inspections, infrared and thermal testing and other nondestruc-tive testing can be used to determine if there is an issue before having to deal with an un-planned shutdown or operational instruc-tion.

The FEW’s Leadership and Financial Management track is designed for ethanol industry executives, board members, di-

PREVIEW

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MAY 2016 | Ethanol Producer Magazine | 51

rectors and top-tier facility managers who oversee fi nance and management, with pre-sentations on topics like workplace trends, hiring practices and risk management.

Conference attendees responsible for producing or marketing distillers grains and plant executives exploring product di-versifi cation strategies such as fractionation and corn oil extraction will want to attend FEW’s Coproducts and Product Diversifi -cation track. The track will include a cross-section of issues from production technol-ogy to international trade. Commodities managers, risk managers, distillers grain merchandisers, lab managers, researchers and animal nutritionists will want to hear about topics including production trends, drying technology and enhanced separation technologies.

Those are just a handful of about a hundred speakers who will give a variety of presentations in the four FEW tracks. The National Advanced Biofuels Conference & Expo, meanwhile, will feature about 50 ad-ditional speakers.

Besides the informational sessions at the FEW, attendees will have an opportu-nity to network outside of the Wisconsin Center. The annual FEW golf tournament will begin at 8 a.m., Monday, June 20, with a shotgun start. The tournament will be held at Brown Deer Golf Course, a clas-

sic design, 18-hole facility with bent grass fairways, tees and greens that has hosted an annual PGA tour event, USDA national championships and now hosts the PHC Classic, a Symetra Tour event.

At the free Wednesday evening event on June 22, FEW attendees will have an opportunity to tour the Harley Davidson Museum, one of Milwaukee’s top tourist destinations. More than 450 motorcycles and artifacts, dating back to Serial No. 1, the oldest known Harley Davidson, are housed on the 20-acre museum campus along Mil-waukee’s river front.

Tours and one-day seminars bookend-ing the event are still under development. Watch for more details on www.fueletha-nolworkshop.com.

Author: Ann BaileyAssociate Editor, Ethanol Producer Magazine

[email protected]

Page 52: 2016 May Ethanol Producer Magazine

52 | Ethanol Producer Magazine | MAY 2016

Biodiesel proves to be a major, and growing, market for distillers corn oil. By Dave Elsenbast

BIODIESEL

The biomass-based diesel in-dustry showed its resiliency in 2015, another challenging year, and now that some regulatory un-certainty has been resolved, it is looking ahead to a brighter future.

The industry nearly reached record pro-duction levels last year and, according to U.S. EPA data, U.S. consumers used a record 2.1 billion gallons of biodiesel in 2015, reducing America’s carbon emissions by at least 18.2 million metric tons. Biomass-based diesel con-tinues to add value to many industries including agriculture, fuel marketing, ethanol and trans-

portation. It is proven that advanced biofuel is poised for continued growth. The fuel sup-ports our nation’s energy security and diversity, food security and environmental stewardship.

EPA released its fi nal rule and volumes for 2014-’17 for biomass-based diesel Nov. 30, 2015, putting the renewable fuel standard (RFS) back on its legislated schedule as shown in the accompanying table. With this forward regulatory certainty, biomass-based diesel’s role in RFS compliance will continue to increase. In addition, the $1-per-gallon federal biodiesel ex-cise tax credit that expired Dec. 31, 2014, was retroactively extended for 2015 and 2016.

Many other positive factors have kept the advanced biofuel industry moving forward.

Market opportunity is broad for biomass-based diesel and there is ample domestic production infrastructure in place. Biodiesel imports rose from 510 million gallons in 2014 to an estimated 670 million gallons in 2015, nearly 30 percent of the total U.S. market.

Falling oil prices, however, pressure bio-fuel market prices and that impacts the ad-vanced biofuel industry. With oil prices the lowest since 2003, the energy market is weak and there is ample supply.

State and local policies supportive of biomass-based diesel continue to be gener-ally positive, albeit with some uncertainty. New York City has a B2 requirement for all heat-ing oil sold and higher usage requirements

Biomass-based Diesel Poised for Growth

CONTRIBUTION: The claims and statements made in this article belong exclusively to the author(s) and do not necessarily refl ect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

BIODIESEL: Trucks serve the 45 MMgy REG Danville, Illinois, biorefi nery, bringing corn oil in and delivering fi nished fuel. PHOTO: REG

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MAY 2016 | Ethanol Producer Magazine | 53

are under consideration. Minnesota requires all diesel gallons be blended at B5 year round and at B10 in the summer months. California’s Low Carbon Fuel Standard requires producers of petroleum-based fuels to reduce the car-bon intensity of their products. Biofuels from feedstocks such as inedible corn oil, animal fats and used cooking oil are favorable choices for LCFS customers because of their lower car-bon intensity values.

Corn Oil Fit Biomass-based diesel continues to be a

signifi cant and reliable source of demand for inedible corn oil as shown in the bar chart. In 2015, biomass-based diesel consumed 944 mil-lion pounds of inedible corn oil, nearly 40 per-cent of all inedible corn oil produced in 2015. The cold weather characteristics of corn oil-derived biodiesel, combined with the advan-tageous carbon intensity score into the LCFS market, make inedible corn oil and biodiesel a great fi t.

Uncertainty and market volatility are no strangers to the renewable fuels industry. This has taught us that the biomass-based diesel in-dustry needs feedstock diversifi cation. Renew-able Energy Group Inc., an advanced biofuels producer and marketer, has been a leader in that diversifi cation strategy. Today, REG relies on its multifeedstock, multiproduct and multi-technology approach to ensure feedstock fl ex-ibility and product quality across all of its bio-refi neries. The company has invested in facility upgrades that allow multiple feedstocks with both high- and low-free fatty acid content.

Biomass-based diesel is among the most tested fuels in the marketplace. The American Society for Testing Materials and the biodiesel industry have been strategic partners in re-search and investments in quality standards for biodiesel. This dedication to quality has proven that biodiesel is here to stay. It is a widely ac-cepted and ready-to-use fuel in many applica-tions, including on-road and off-road transpor-tation and heating oil markets.

So what’s next in 2016? History has prov-en over and over again that this resilient indus-try will continue growing into new and existing markets, utilizing multiple feedstocks and pro-ducing quality products. Biomass-based diesel will continue to support jobs, economic devel-opment and innovation.

The U.S. Energy Information Adminis-tration forecasts drivers will consume 17.1 per-

cent more diesel fuel by 2023 and 26 percent more by 2040. Diesel car and SUV registra-tions in the U.S. increased 24.3 percent from 2010 through 2012, compared with a 2.75 per-cent rise for gasoline car and SUV registrations. With 44 new clean diesel car, truck and SUV models launched in the 2014 model year, auto-motive industry experts predict that consumers will have more than 58 diesel vehicle models to choose from in North America by 2017, according to a National Biodiesel Board 2016 market report.

Biomass-based diesel’s future growth looks even more promising with progress be-ing made toward addressing climate change, demonstrated by the recent 2015 United Na-tions Climate Change Conference in Paris. The industry can help improve petroleum diesel’s

greenhouse gas emissions profi le as countries and local governing entities continue to expand policy responses to this issue.

Consumer acceptance, growing domestic production and continued advocacy across the ethanol and biodiesel industries will remain im-portant for future growth of the renewable fu-els industries. The biomass-based diesel indus-try has been tested, proven and is here to stay.

Author: Dave ElsenbastVice President, Supply Chain,

Renewable Energy Group [email protected]

515-239-8117

BIODIESEL

SOURCE: ENERGY INFORMATION ADMINISTRATION

SOURCE: U.S. EPA RENEWABLE FUEL STANDARDS 2014, 2015, 2016, AND THE BIOMASS-BASED DIESEL VOLUME FOR 2017

U.S. EPA Final Renewable Fuel Volumes2014 2015 2016 2017

Cellulosic biofuel (million gallons)

33 123 230 n/a

Biomass-based diesel (billion gallons)

1.63 1.73 1.90 2.00

Advanced biofuel (billion gallons)

2.67 2.88 3.61 n/a

Renewable fuel (billion gallons)

16.28 16.93 18.11 n/a

Page 54: 2016 May Ethanol Producer Magazine

54 | Ethanol Producer Magazine | MAY 2016

Process expands potential ethanol capacity by shortening fermentation.By Don McLellan

YEAST

Typically, in ethanol produc-tion the nonfermentable left-overs from the feedstocks and yeast are combined and sold either as wetcake or dried dis-tillers grains for feed. But the yeast included in that sale of animal feed includes protein, sometimes vitamins and minerals, cell walls and nucleotides, which have a value in their own right on world markets.

So the questions are: 1. How can those components be collected separately without losing them in the mix? 2. Isn’t there some way that ethanol producers can earn some ad-ditional revenue from these components?

Traditional yeast companies sought to fi nd new strains of their yeasts to improve productivity, and some were successful, but none could enable the yeast cells to remain in-tact through the process. Australian researcher David MacLennan developed a continuous fermentation process to produce single-cell

protein while at Sydney University. He formed Biotechnology Australia Pty. Ltd. and contin-ued his work on protein and ethanol. That company was acquired by Rio Tinto. He has since formed his own R&D company, Agri-technology Pty. Ltd., and partnered with me to form Alternative Fuels Corp., which contract-ed the research to Agritech, is the owner of the patents and is aiming at commercializing the AFC Yeast technology.

MacLennan’s concept is to keep these im-portant components intact within the yeast cell

New Coproduct Technology Produces Food-Grade Yeast

CONTRIBUTION: The claims and statements made in this article belong exclusively to the author(s) and do not necessarily refl ect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

PHOTO: AFC YEAST

Page 55: 2016 May Ethanol Producer Magazine

MAY 2016 | Ethanol Producer Magazine | 55

and not to leave them in the ethanol fermen-tation for as long. By substantially increasing the volume of the active yeast into the ethanol fermenters, the fermentation time has been reduced to seven to 10 hours, much shorter than standard practices. When the ethanol fer-mentation process is fi nished, the yeast cells, still intact and maintaining their full integrity, can be centrifuged off from the beer prior to distillation. Note that none of the agricultural feedstocks are used to produce ethanol. All are completely applied to producing the human food-grade yeast product.

The separated, washed and dried yeast has a protein content between 45 and 55 percent, is rich in B vitamins and minerals and contains 7 percent ash. It also contains beta glucans and mannans that have medical applications along with the potent antioxidant glutathione and traces of other elements. As a vegetable yeast, it is suitable for vegans and vegetarians and has GRAS status (generally regarded as safe under the U.S. Food and Drug Administration.)

To present some idea of the enormity of this opportunity, it could be possible to achieve a ratio of one metric ton of yeast for every 5,000 liters of ethanol produced annually. If even half of the global ethanol plants were converted to enable this system to be imple-mented, the volume of this high quality yeast protein would satisfy the world’s demand for protein well into the future.

Other challenges involved in product de-velopment include discerning the best form

and whether it can compete in existing markets or a new one. Some possible uses for the yeast protein include:

• A highly nutritious protein ball supple-ment.

• An egg substitute in baked goods such as cakes, biscuits, muffi ns or donuts that re-tains the protein content previously provided by eggs.

• A milk extender that can increase milk volume by 30 percent, without settling due to the yeast’s functional property of solubility. This would have particular relevance for feed-ing young animals because of the presence of nucleotides.

• A protein concentrate for use in sports and health drinks or in a range of textured veg-etable protein dishes intended as meat substi-tutes.

The research fi ndings have potential to be attractive to the ethanol producer economi-cally. Because the ethanol fermentation period is so short, it may be possible to have a second fermentation in the same original time, increas-ing capacity by 67 to 100 percent. More distil-lation equipment probably would be required. Additionally, the potential revenue from the sale of the yeast is many times greater than for distillers grains. Depending on costs of feed-stocks, labor and power, it is possible that exist-ing profi tability could be increased by a factor of four to fi ve times.

Of course, there has to be a market for the yeast protein. There is much talk of a looming

global lack of protein, and different new ideas get suggested as the next opportunity. Yeast protein has not had signifi cant attention simply because, until now, it has been too expensive to compete as a protein. Yeast itself is common, because it is the major one used in baker’s and brewer’s yeasts and in yeast extracts used as fl a-vor enhancers in many foods.

It is only now, because of the patented process that this yeast protein can compete against the likes of soy. Besides being a vegeta-ble yeast, not an allergen, generally regarded as safe and the fact that it can be produced almost anywhere in the world, the yeast also is cheap to produce.

It now offers food developers, manufac-turers and sellers a great opportunity to help create a new emerging wave of high protein, low cost and medically benefi cial applications. And they are backed by the knowledge that supplies of the raw material yeast protein can be produced virtually globally in large quanti-ties.

Yeast protein can become part of a new food revolution.

Author: Don McLellanChairman, Managing Director, AFC Yeast

+61 4 0384 [email protected]

YEAST

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Page 56: 2016 May Ethanol Producer Magazine

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Page 57: 2016 May Ethanol Producer Magazine

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Page 58: 2016 May Ethanol Producer Magazine

58 | Ethanol Producer Magazine | MAY 2016

The biofuels story is not yet completely written. Many exciting de-velopments are on the horizon and some are within our grasp. Indeed, cellulosic ethanol is here and being commercialized. Gen 1.5 processes increasingly are being implemented throughout the industry. Existing Generation 1 dry grind plants continue to evolve. Engi-neers and scientists at new startups as well as long-established companies continue to fi nd new ways to extract more uses and value up-stream from kernels of corn and downstream from coproduct materials.

We also are entering an era with an in-creased emphasis on human food safety, and thus on feed safety. After all, feed ultimately becomes food for people when fed to live-stock and other food-producing animals. Dur-ing the past two years, we have reviewed and commented on two key rulings in the Food Safety Modernization Act, including the Cur-rent Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Food for Animals (FDA-2011-N-0992), and the Sanitary Transport of Human and Animal Food (FDA-2013-N-0013). FSMA

is expanding the scope of the U.S. Food and Drug Administration.

We must, therefore, make sure that we do our due diligence when it comes to the prod-ucts we make and the processes we use to man-ufacture them, being cognizant of the relevant regulations.

To be sold in the U.S. marketplace, all feed ingredients must meet specifi c, defi ned legal defi nitions. These defi nitions are published each year by the Association of American Feed Control Offi cials. Those relevant to the ethanol industry are shown in Table 2. Current

Altered, novel products may require new AAFCO defi nitions, GRAS affi rmations By Kurt A. Rosentrator

New, Evolving Coproducts Require Regulatory Due Diligence

REGULATION

CONTRIBUTION: The claims and statements made in this article belong exclusively to the author(s) and do not necessarily refl ect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

Page 59: 2016 May Ethanol Producer Magazine

MAY 2016 | Ethanol Producer Magazine | 59

REGULATION

Designation Offi cial Name Offi cial Defi nition for Trade (Excerpt only)T33.10 Corn Distillers Oil,

Feed Grade“… obtained … from the yeast fermentation of a grain or a grain mixture … consists predominantly of glyceride esters of fatty acids must be guaranteed for, not less than 85% total fatty acids, not more than 2.5% unsaponifi able matter, and not more than 1% insoluble impurities...” 2015, tentative.

TABLE 1: Name and excerpted defi nition for oil removed from ethanol processing (as delineated by AAFCO, 2016, pp. 401). AAFCO voted and approved the listing of this name and defi nition as “tentative” during 2015. For full defi nition, refer to the AAFCO Offi cial Publication. The name of the predominating grain must be stated. For many fuel ethanol plants in the U.S., this will be corn, as shown in the table above.

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defi nitions include both wet and dry products and many were developed and approved for fuel and beverage alcohol several years ago.

Most dry grind ethanol plants produce coproducts meeting these defi nitions, as do beverage distilleries here in the U.S. If you make traditional distillers coproducts, then more than likely your coproducts are already defi ned appropriately. But, are you making a new type of coproduct? If so, does it fall in line with one or more of these defi nitions? If it does not, then you need to develop a new defi nition. The AAFCO Offi cial Publication is printed annually or you can subscribe to the online publication which is updated continu-ously.

As an example, in recent years most fuel ethanol plants have implemented oil removal technologies and many in the industry, includ-ing the Distillers Grains Technology Council, have worked to establish a legal defi nition for distillers oil so that it legally can be sold in the U.S. See Table 1 for the approved defi nition.

Defi ning New Coproducts

But, the industry isn’t standing still. Every year, much research is conducted to further fractionate compounds from either the grain or the coproduct streams. These include fi ber, proteins and other nutrients. Meanwhile, re-search also is being conducted to produce fer-mentation products other than ethanol from corn, such as isobutanol. Which of these new technologies will become commercial reality? Or, if they are already commercialized, which will be successful in the long term? It is dif-fi cult to predict the future. But, one thing is certain: if you are developing new coproducts, or are even thinking about it, start your journey toward compliance now.

In order to legally sell a new coproduct, the new feed ingredient must be proven safe for its intended use. There are three mecha-nisms to gain authorization for a new feed in-gredient: the AAFCO defi nition process, the

Food Additive Petition process or the gener-ally regarded as safe (GRAS) determination with voluntary notifi cation. All three of these mechanisms for approval can be very lengthy, ranging from one to three or more years, re-quiring extensive documentation.

Although it is dependent on the product and company preference as to which path to take, most follow the offi cial AAFCO pro-cess to establish the legal identity and get a published defi nition in the AAFCO offi cial publication. “A Guide to Submitting New In-gredient Defi nitions to AAFCO” is available on the AAFCO.org website. In the process,

companies work with an AAFCO investiga-tor, who also will work with the U.S. Food and Drug Administration to develop the defi nition and prove the safety of the ingredient. After the initial review, the proposed feed ingredi-ent defi nition package is submitted to the FDA Center for Veterinary Medicine, where the supporting scientifi c information is as-sessed, including manufacturing information, ingredient safety and utility data. Once com-pleted, FDA will issue its recommendation to the AAFCO Ingredient Defi nition Commit-tee and, if all goes well, will result in an offi cial AAFCO defi nition for your coproduct.

Page 60: 2016 May Ethanol Producer Magazine

60 | Ethanol Producer Magazine | MAY 2016

REGULATION

Designation Offi cial Name Offi cial Defi nition for Trade27.6 Corn Distillers

Dried Grains with Solubles

“…obtained … from the yeast fermentation of a grain or a grain mixture by condensing and drying at least three-quarters of the solids of the resultant whole stillage ...” 1964.

27.5 Corn Distillers Dried Grains

“… obtained … from the yeast fermentation of a grain or a grain mixture by separating the resulting coarse grain fraction of the whole stillage and drying …” 1964.

27.8 Corn Distillers Wet Grains

“… obtained … from the yeast fermentation of a grain or a grain mixture ...” 2007.

27.7 Corn Condensed Distillers Solubles

“… obtained … from the yeast fermentation of a grain or a grain mixture by condensing the thin stillage fraction to a semisolid...” 1970.

27.4 Corn Distillers Dried Solubles

“… obtained … from the yeast fermentation of a grain or a grain mixture by condensing the thin stillage fraction ....” 1964.

96.5 Grain Distillers Dried Yeast

“… dried, non-fermentative yeast of the botanical classifi cation Saccharomyces resulting from the fermentation of grains and yeast….” 1978.

TABLE 2: Offi cial coproduct names and excerpts of defi nitions relevant to the ethanol industry (as delineated by AAFCO, 2016, pp. 392-393, 477). For full defi nitions, refer to the AAFCO Offi cial Publication. The name of the predominating grain must be stated. For many fuel ethanol plants in the U.S., this will be corn, as shown in the table above.

If, however, the FDA determines the new ingredient may result in human safety con-cerns, the company must submit a food addi-tive petition to the FDA. After this process, if the ingredient is determined to be safe, the FDA will issue a regulation under section 21 of the Code of Federal Regulations (21 CFR).

A third approach is to establish the ingre-dient is safe for the intended use via a GRAS affi rmation. GRAS is for specifi ed uses only and does not imply approval for all applica-tions in animal feed. If general recognition standards, often defi ned as published informa-tion in peer reviewed journals, can be met, the GRAS determination can be submitted under the voluntary notifi cation procedures, either through self-affi rmation or the FDA's GRAS notifi cation program.

Being proactive is important when devel-oping and commercializing new processes and products. If you have any questions or need any assistance with DDGS or other coproducts please contact us. We look forward to helping you as the industry continues to evolve.

Author: Kurt A. Rosentrater Executive Director, Distillers Grains Technology Council

[email protected]

Page 61: 2016 May Ethanol Producer Magazine

For years, we’ve been told that cellulosic ethanol is a “fantasy fuel.” And it is.

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Page 62: 2016 May Ethanol Producer Magazine

62 | Ethanol Producer Magazine | MAY 2016

The industry has a tremendous opportunity in the upcoming Midterm Review to make the case that ethanol can help the nation reach its goals of increased fuel economy while reducing greenhouse gases on the path that leads to higher ethanol blends.

The best way I can explain how carbon reduction, gas mileage, higher octane and greenhouse gases (GHG) fi t together is to look at it like a puzzle. When you look at each of the Midterm Review puzzle pieces individually, it is hard to see how we get to the picture on the box.

Like me, do you wonder why auto manufacturers want higher octane and how that connects to carbon reduction? Ethanol is the piece that completes the puzzle on how the auto industry will fulfi ll the tougher light-duty vehicle standards.

In 2012, the U.S. EPA and National Highway Traffi c Safety Administration called for 54 miles per gallon (mpg) by 2025 under the new Corporate Average Fleet Effi ciency standard. That’s a whopping 60 percent increase over 2011’s 34 mpg.

Connect that to the second puzzle piece which is the Obama Administration's determination to reduce petroleum use as a means of cutting greenhouse gases. According to the EPA, the transportation sector is responsible for 34 percent of all CO2 emissions and light-duty vehicles are responsible for more than 65 percent of that.

In the end, we likely will see the CAFE standards merged into a GHG reduction program in which vehicle effi ciency will be measured in grams per mile GHG emitted, in addition to miles per gallon.

While not unprecedented, it is unusual to create a regulatory program reaching 13 years into the future. To do so requires multiple assumptions. When the new standards fi rst were announced, the EPA incorrectly predicted expensive oil, reasonably priced and available electric vehicles, and most importantly, eager consumers. This is a problem when most of the expected CO2 reductions are based on smaller cars and electric vehicles.

In a rare instance of rational thinking in Washington, the EPA promised to do a Midterm Review to assess the success of the light-duty vehicle standards. This is important to the auto manufacturers because

they are the ones who are burdened with meeting the requirements and this is where ethanol, specifi cally midlevel blends, can help save the day.

In the Midterm Review, the EPA states it will evaluate the long-term standards to determine if those levels still are appropriate, looking at key factors such as fuel prices and the market penetrations of new technologies, notably electric vehicles. We already know the answer to both those questions and it is highly unlikely we can achieve anything remotely close to the carbon reduction targets—unless we embrace higher ethanol blends.

We have a tremendous opportunity to make this case in the Midterm Review in what EPA says will be a “data driven and transparent process.” We can show how carbon reductions are indeed possible without drastic changes in vehicles, driving habits, or increased costs, while giving automakers the high octane they need to design more effi cient engines.

The Urban Air Initiative’s research confi rms substantial carbon savings are achieved with high-octane E30 blends. Refi ners would use less energy and the ethanol would replace carbon-intensive aromatics currently used to boost octane.

In addition, Urban Air’s recent report to the Offi ce of Inspector General details the huge improvements in the carbon footprint of corn, based on yield increases and better understood carbon sequestration performance. We argue corn ethanol’s GHG reduction compared to baseline gasoline now is closer to 50 percent—far greater than the roughly 20 percent GHG reduction now attributed to corn ethanol.

The draft of the Midterm Review is scheduled to be available for public comment in June and the fi nal rule is expected in 2018. The Urban Air Initiative will put signifi cant resources into this effort and, in so doing, create new demand, based on real value that will grow our industry for decades to come.

When we all work to put more pieces together, the picture is bright for ethanol.

Author: David VanderGriendCEO, ICM Inc., President, Urban Air Initiative

[email protected]

Ethanol Completes the Puzzle

CLEARING THE AIR

By Dave VanderGriend

Page 63: 2016 May Ethanol Producer Magazine
Page 64: 2016 May Ethanol Producer Magazine

64 | Ethanol Producer Magazine | MAY 2016

As the carbon economy emerges, there are increasing opportunities for ethanol producers to capitalize on various value sources across the carbon accounting market. The more proactive roles producers take in reducing carbon intensity, the more they will benefi t as energy use reduction moves from an incentive to a requirement.

Carbon intensity and carbon accounting have moved from simply being green kudos a few years ago to an emerging market with tangible benefi ts available to ethanol producers who can demonstrate and capitalize on reduced carbon intensity. California already has enacted low-carbon fuel requirements and more states are expected to follow suit.

In addition, as the energy markets, especially power generation, comply with U.S. EPA regulations and proposed CO2 limits, ethanol producers have seen and will see energy costs climb. Since 2001, average U.S. electric rates have risen 38 percent. It is estimated that nearly 400 coal-fi red power plants will shut down between now and 2020 because of the EPA’s CO2 restrictions. That represents nearly 50 gigawatts of cheap electricity that will need to be replaced.

There are essentially two main areas of opportunity. First, by making modifi cations to produce ethanol more effi ciently and with lower carbon intensity, ethanol plants are more likely to qualify for the EPA’s effi cient producer pathway petition process (EP3). By deploying a wide range of possible plant

upgrades or modifi cations, ethanol producers not only gain incentives from the EP3 pathway—more than 50 plants already have applied—but also reduce dependence on traditional grid-based energy.

There are also specifi c market benefi ts in gaining access to states that have their own carbon intensity thresholds. West-facing producers need to comply with the California Low Carbon Fuel Standard to be able to deliver ethanol into the state. Reduced carbon intensity can translate to a tangible premium for LCFS-qualifi ed ethanol and it is expected that value will continue to increase. Oregon, Washington, British Columbia and other U.S. states and Canadian provinces are taking steps to enact their own versions of LCFS.

Going forward, it will be necessary for ethanol producers to consider, calculate and capitalize on their carbon intensity, carbon accounting and the potential tangible benefi ts associated with the carbon economy.

Author: Bernie Hoff manBiofuels Consultant, K-Coe Isom

316-691-3721Bernie.hoff [email protected]

Carbon Intensity Creates Opportunities

BUSINESS MATTERS

By Bernie Hoff man

Page 65: 2016 May Ethanol Producer Magazine
Page 66: 2016 May Ethanol Producer Magazine

66 | Ethanol Producer Magazine | MAY 2016

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