Tag Archives: bermuda
Dedicated Feedstock Forerunner
By Sue Retka Schill | August 20, 2013 PROJECT PARTNERS: Paolo Carollo, executive vice president of Chemtex, and Mark Conlon, vice president of the Biofuels Center of North Carolina, stand in front of a second-year Arundo donax plantation. While the center lost its state funding this sum PHOTO: Biofuel Center of North Carolina Project Alpha in North Carolina is going to commercially test a broad range of purpose-grown energy crops. Chemtex International Inc. received a $99 million conditional loan guarantee from the USDA a year ago, along with a $3.9 million grant from the USDA through the Biomass Crop Assistance Program, to support the establishment of more than 4,000 acres of miscanthus and switchgrass across 11 counties in North Carolina to help supply the new facility. “The Chemtex project in Clinton, N.C., will use a multifeedstock strategy including switchgrass, high biomass sorghum and arundo donax, as well as select hardwood tree species, miscanthus and Bermuda grass residuals,” says Mark Conlon, vice president of sector development for the Biofuels Center of North Carolina. Chemtex’s planned 20 MMgy cellulosic ethanol facility will require between 20,000 and 30,000 acres of energy crops. “That’s considerably less than the corn acres that would be required for a facility of that size,” Conlon points out. A corresponding 20 MMgy corn ethanol plant based on Iowa average corn yield would need more than 54,000 acres, he says, and in the South, where yields can run half that of prime Corn Belt corn crops, considerably more. Chemtex will be the first cellulosic ethanol plant to rely on a mixture of purpose-grown energy crops. Most plants in various stages of development are planning to use nondedicated feedstocks, or a combination of the two. For example, two plants under construction in Iowa, one by the Poet/DSM partnership in Emmetsburg and the other by DuPont in Nevada, are planning to use corn stover. Abengoa Bioenergy’s plant in Hugoton, Kan., will use mixed feedstocks including straw, corn stover and purpose-grown switchgrass. Enerkem Inc.’s nearly complete plant in Alberta is using municipal solid waste (MSW), as are several others in earlier development stages. Zeachem in Oregon is utilizing hybrid poplar and wheat straw, and Ineos New Planet BioEnergy LLC, located next to a landfill, is using mixed vegetative and wood waste at startup, with plans to include MSW in the future. “The Chemtex biomass mixed-feedstock, supply-chain strategy is unique,” Conlon says. “It provides a greater level of flexibility in dealing with unpredictable supply chain iterations and reduces overall inventory costs, in that harvest can be spread out over a greater number of months. It’s a very well-thought-out, cost-efficient strategy where eastern North Carolina farmers gain profitable market options with the new Chemtex demand for energy crops.” Creating a 30,000-acre supply chain to supply a biorefinery that hasn’t begun construction yet—using a brand new conversion technology—is no small task when using crops that have never been grown before. But as Chemtex and others are showing, the new technologies work, and North Carolina is providing an example of how the farmer side can be developed. Travis Hedrick, director of operations for Repreve Renewables LLC, says BCAP is a very important part of signing up farmers to try miscanthus. “BCAP is absolutely helping with the cost and it’s a useful program—it shows support from the USDA.” Due to budget wranglings in Washington, the final go-ahead for the BCAP project came late in the season, shortening the available time for grower meetings. “We had a two-month signup period where we were able to sign up 200 acres,” Hedrick says. The results from the fall plantings have been good, he adds. “The farmers that signed up are excited with their stands.” Getting a good stand with a high-density plant population is critical to getting good yields, and that’s something Hedrick’s company has focused on while developing its proprietary system and equipment for growing the vegetatively propagated, high-yielding perennial grass. Advanced Pathways When Chemtex first announced Project Alpha, it named switchgrass and miscanthus—both feedstocks that already had approved pathways with the U.S. EPA for use as advanced biofuel feedstocks. Chemtex petitioned EPA for a pathway for arundo donax (giant reed), one of the multiple feedstocks used at its first-of-its-kind cellulosic ethanol plant that completed its commissioning process early this summer in Crescentino, Italy. EPA announced its final rule in June, adding giant reed and napier grass as approved pathways for advanced biofuels. Since they are the first feedstocks to be approved that are considered potentially invasive, the EPA included new requirements for addressing potential invasiveness (see sidebar). “The EPA-approved pathway for arundo donax and napier grass is welcome, appreciated and very much doable,” Conlon says. North Carolina did a thorough assessment of the perennial grass that is widely used as a landscaping plant, he adds, ultimately deciding that it did not need to be declared a noxious weed. Biomass supply agreements in North Carolina are going to include most of the EPA requirements regardless, as they must meet state requirements for best management practices for energy crops, as well as the terms of the USDA loan guarantee that Chemtex received. The protocols will include such things as new farm/producer orientation to discuss production and best management practices, setbacks and buffer requirements, monitoring programs, annual producer reporting and eradication protocols. A big part of the equation in North Carolina is providing alternative crops for the fields used for swine lagoon and poultry litter disposal. The state regulates how much waste can be applied to fields depending upon the soil type and the ability of the crop to take up nutrients with the goal of minimizing leaching. Coastal Bermuda grass is one of the most commonly used crops, Conlon says, resulting in a surplus of hay in the state. That surplus can be utilized by Project Alpha, he says, and farmers are very interested in the prospect of better-returning alternatives. Murphy-Brown LLC, the livestock production subsidiary of Smithfield Foods Inc., signed a long-term agreement for the supply of purpose-grown feedstocks for Project Alpha to be grown on approximately 6,000 acres—land not typically used for grain production. Having a range of feedstocks to select from will be an advantage, Conlon adds. Farmers will like the ability to make choices, particularly with the option of the annual high-biomass sorghum. For the biorefinery, a range of crops should mean harvest and collection can be spread over a larger time frame. “Unique to Chemtex, supply contracts with farmers are being established based on stumpage prices—crops standing in the field,” he says. “Chemtex can and will arrange for direct chop harvest and delivery to its facilities as needed. Limited baling and storage are required and to this extent, supply chain infrastructure is complete and ready to go. In the shorter term,” he adds, “feedstock supply from mixed hardwood stands abundant in eastern North Carolina will fill the supply chain while purpose-grown energy crop acreage develops and matures to peak yield expectations.” Author: Susanne Retka Schill Senior Editor, Biomass Magazine 701-738-4922 sretkaschill@bbiinternational.com Managing Invasiveness Risk When napier grass and giant reed joined the list of feedstocks approved by the U.S. EPA as pathways for advanced biofuels, the ruling came with a new set of requirements addressing the potential invasiveness of the energy crops. The EPA is asking that the biofuel producer “submit a letter from the appropriate USDA office with its registration materials, stating USDA’s opinions regarding the likelihood of the feedstock spreading beyond the planting area, and the sufficiency of the risk mitigation plan.” The risk management plan (RMP) outlined in the rule is comprehensive, including: • A hazard analysis of critical control points. • Best management practices that include strategies to minimize escape and eradication protocols. • A site decommissioning plan. • A plan for ongoing monitoring and reporting, both during production and for a sufficient period after the site is no longer in use to ensure the crop didn’t spread. • A communication plan for notifying federal, state and local authorities if the feedstock is detected outside the intended area. • Documents showing the biofuel producer has agreements in place with growers and any intermediaries responsible for the harvesting, transport and storage of the feedstocks. Annual third party audits are required to verify the RMP is being adhered to, with the possibility of more frequent monitoring for new growers in the first growing cycle. The provisions go on, covering other documentation and reporting requirements. The EPA stresses that none of its rules supersede any local, state or federal authority to restrict these feedstocks. The handling of invasiveness risk is going to vary greatly. While North Carolina doesn’t anticipate giant reed will become a problem, California and Texas have declared it a noxious weed as it has spread since being introduced more than a 100 years ago to stabilize stream banks. Bill Anderson, an energy crop researcher wtih the USDA Agriculture Research Service, explains that while giant reed doesn’t produce seeds, it does form secondary shoots along the upper nodes of the plant which can break off and float along in a river or a flood event to propagate elsewhere. Eradication can be a problem since it requires multiple applications of glyphosate to kill and produces large rhizomes that can be a challenge to deal with. Napier grass presents other issues. In more tropical climates, it sets seed and will spread, and is thus a concern in southern Florida, although one since-discontinued project did get permitted to use the crop, Anderson adds. Further north it won’t set seed due to killing frosts and must be propagated vegetatively. With potential yields of 15 dry tons a year, or higher with good fertility, napier grass shows promise as a biomass crop along the southern coastal states and east Texas, Anderson says. Continue reading
UK’s Offshore Finance Centres Commit To Tackling Tax Evasion
http://www.ft.com/cms/s/0/7f1d3e2a-d5e6-11e2-9dbd-00144feab7de.html#ixzz2X2GjjljT By Vanessa Houlder All of Britain’s offshore finance centres have committed to sign a treaty tackling evasion, in a boost to David Cameron’s efforts to secure agreements on transparency from other world leaders next week. Danny Alexander, chief secretary to the Treasury said the decision by all Britain’s Overseas Territories and Crown Dependencies to sign the multilateral convention on mutual tax assistance would “strengthen enormously” the arguments for greater transparency at next week’s summit of the G8 group of leading countries. The announcement was made at a meeting of political leaders, business representatives and civil society in London on the agenda of trade, tax and transparency. Mr Cameron also promised to consult on whether to make public a planned central register of the ‘beneficial ownership’ of companies, which will reveal who are their ultimate owners. Campaigners have called for public registers to maximise scrutiny of potential illicit deals. He said more transparency was needed because “some people use complicated and fake structures to hide their profits and avoid taxes and also because bribes are often held in opaquely-owned companies with bank accounts in secretive havens.” Mr Cameron said “The most important thing is that it is available to tax authorities. It will be their first point of call to try and uncover corrupt payments or tax evasion. “We will consult on whether it will be public but personally I would hope the whole world will move towards public registers of beneficial ownership.” He added: “I want to maximise the leverage the UK has over others in terms of taking each step in turn and want to make sure that business and enterprise comes with us on this debate. “ Will Morris, chair of the tax committee of the CBI said it was “very supportive of the idea of a register of beneficial ownership. “We think it is a ‘no brainer’”, he said. He said the CBI did not yet have a view of whether it should be public or private but he personally would support making it public. Mr Cameron told the meeting: “Each and everyone of our Overseas Territorities and Crown Dependencies has agreed to sign up to the multilateral convention on information exchange. “They have also agreed to exchange information automatically with the United Kingdom and to produce action plans on beneficial ownership. Mr Cameron said he would call on other international partners to work with their territories reach similar agreements. Although most of the Crown Dependencies and Overseas Territories had already committed to sign the treaty, some had expressed reservations. In a statement, Bermuda said the concerns it had expressed about signing the multilateral convention were because Bermuda’s fiscal system was not appropriate for automatic exchange of tax information. But it added, the ‘wisdom of the drafters’ of the multilateral convention meant that automatic exchange was based on mutual need and mutual agreement of both parties. The decision of all the offshore centres to commit to the treaty will help neutralise some of the criticism frequently levelled at the UK by other countries asked to make concessions on transparency although reservations are likely to remain regarding the transparency of trusts. All the overseas territories and crown dependencies said they supported the government’s drive on transparency but Richard Hay, counsel to the IFC Forum, which represents professional firms in British offshore centres, said the UK was taking a risk of an own goal by moving ahead of other countries, particularly the US. Continue reading
Don’t Blame The Havens – Tax Dodging Is Everyone Else’s Fault
http://www.ft.com/cm…l#ixzz2WlUNxAHS By John Kay Authorities have preferred to cut deals with big companies rather than pursue costly legal action ©Alamy The first time my research gained wide publicity was in 1979. In collaboration with another young academic, I explained that many large British companies paid no corporation tax. The issue resurfaces again as my co-author retires from the Bank of England. This week’s Group of Eight meeting produced denunciations of secrecy and tax havens. But the sources of the problem are not to be found in Bermuda or the Channel Islands. The activities that escape taxation take place in the G8. The correct starting point is the flawed structure and implementation of corporation tax in the G8 itself. Corporation tax is a levy on the profit a company earns for its shareholders. It is therefore both a tax on corporate activity and on shareholders, and it is not well designed to achieve either purpose. It is not robust administratively or economically. Complex and vulnerable to avoidance, it produces major distortions of both investment and financial decisions of companies. It makes sense to tax the incomes of shareholders. If it is desirable to tax separately the activities of companies, the most appropriate base is free cash flow, or economic rent – the amount a business earns in excess of its cost of capital. Almost every dispassionate examination of the structure of company taxation has favoured reform on these lines. Sir Mervyn King and I advocated it in 1979; the Mirrlees Review of the UK tax structure recently undertaken by the Institute for Fiscal Studies reached the same conclusion. There are several different ways of moving towards this result – removing interest deductibility, introducing an allowance for the cost of corporate equity or shifting the tax base towards cash flow rather than accounting profit – but all end up in broadly the same place. These reforms attempt to treat different levels of investment and different methods of financing in the same way. Opportunities for tax avoidance are everywhere and always the consequence of rules that treat economically similar transactions differently. It follows that there is generally alignment rather than conflict between the objectives of promoting economic efficiency and establishing administrative structures robust to avoidance. The present structure of company tax achieves neither. It would be best if these reforms could be undertaken on a co-ordinated international basis, but that is not essential: it is essential, however, to agree better rules for assigning tax revenues between jurisdictions. Since governments – even within the EU – have failed to co-ordinate rules on the principles that each taxes the worldwide income of “their” companies, there are opportunities to create revenues that are taxed nowhere and expenditures that are deductible more than once. Such avoidance is facilitated and enhanced by corporate manipulation of the prices at which capital, goods and services are transferred across borders. The resulting accounts show profit being earned in low-tax jurisdictions in which little or no real business takes place. It is disingenuous for companies to claim they pay the tax legally due when their assessments are based on accounts that defy economic and business realities. In the main, however, tax authorities have preferred to cut deals with big corporations rather than pursue costly legal action. They will not do the same for you and me. It makes no sense for a small company to pay an accountant to do anything but calculate the amount of tax that is properly due, or to incur legal fees resisting a challenge. The unacceptable outcome is an entirely correct perception that there is one law for the little guy and another for the big battalions. The potential effect of that perception on tax compliance is one that it is well worth spending millions of pounds to avoid. A serious reform agenda would involve a principled reappraisal of the basis for taxing corporations both nationally and globally, and a strategy for effective enforcement of existing rules. Such a strategy would make clear that executives of companies which present accounts to tax authorities that are essentially false, and the accountants who support them, will in future run serious risks. The door they hear closing behind them might be the door of a prison cell rather than the door of 10 Downing Street. johnkay@johnkay.com Continue reading
