Tag Archives: biofuel
US Defense Department Grants Biofuel Contract Worth $16m
Published 27 May 2013 US Defense Department has granted contracts worth $16m towards biofuel projects aimed at producing renewable fuel for power fighter jets and destroyers by 2016. The contracts are said to be in line with a program formulated by the administration of President Barack Obama to further investment in renewable energy projects. Contracts were awarded to three companies of Emerald Biofuels Natures BioReserve and Fulcrum Brighton Biofuels, according to Bloomberg. US Defense Department operational energy assistant secretary Sharon Burke told the news agency that the three companies would further invest $17m for the projects. The companies would develop plants with capacity of supplying about 150 million gallons of biofuel at a price of less than $4 a gallon, added Burke. The renewable fuel will be produced from materials such as animal fats, food-processing waste and oil-seed crops, the department stated. “We see a national security benefit in global diversification of liquid fuels,” Burke noted, besides adding that these developments would encourage production of biofuels across the nation. Continue reading
New Biofuel Proposals Could Have ‘Severe Implications’
22 April 2013 A PROPOSAL to reduce the market size for biofuel production in Europe will damage farmer confidence and reduce the incentive to produce for food, feed and fuel, the NFU has warned. The warning comes following the publication of a draft opinion on the indirect land use change (ILUC) proposal by French MEP Corinne Lepage. As the European Parliament’s lead rapporteur on the Environment Committee, Ms Lepage will set the tone for forthcoming debates on the contribution biofuels can make to the Renewable Energy Directive targets, which currently require member states to achieve 10 per cent renewable transport fuel by 2020. The draft opinion seeks to introduce ILUC factors on biofuel production and tightens the cap proposed by the European Commission to 4.27 per cent for biodiesel produced from oil crops. International land use modelling has provided a wide range of results and the NFU believes the EU Commission has chosen one modelling result, which includes some basic errors that bias results against biodiesel, on which to base its proposal. NFU crops board member Brett Askew said: “The consequences of this for arable production could be devastating and a further blow to UK and EU agriculture, with an estimated reduction of one-third in the cropped area of EU and UK oilseed rape and the impact of losing an important rotational crop on UK wheat yields. “It is clear Ms Lepage has failed to consider the severe implications of her opinion on productivity and biodiversity on-farm. Picking winners, as she has done in proposing a cap on biodiesel production, fails to reflect the interdependence of these feedstocks on-farm.” Mr Askew said the decision to introduce ILUC factors to control a ‘hypothetical conflict of food versus fuel naively confuses two issues of agricultural production and the original ILUC greenhouse gas savings’. “This simplistic approach fails to reflect the factors behind increasing production on farm, for all markets,” he added. “Simply destroying demand will not lead to an increase in future stock levels but instead a decline in production as markets correct themselves to reflect economic supply and demand levels.” Continue reading
Ways Of Gaining Exposure To Renewable Energy
Biofuel projects are currently in a very strong position. By Jonathan Turney | Published May 13, 2013 The rapidly developing biofuels industry has helped to put renewable energy on the map, with mandated blending targets indicating that the sector is ripe for further growth. Currently, just 6bn litres (or 4.75 per cent) of European transport fuel comes from renewable sources but as this figure needs to rise to 18.5bn litres by 2020, the renewable transport fuel market is set to triple in just seven years. Sustainable biofuel projects are currently in a very strong position. These schemes use technology with known commercial results and operate within a supportive regulatory environment – as demonstrated by the now binding UK Renewable Transport Fuel Obligation. Furthermore the UK is ideally suited to domestic biofuel production, with a large transport fleet, a surplus of low-grade feedstock and an existing petrochemical infrastructure. The renewable energy sector has undergone huge leaps in technology and development in the past few years and there are a range of projects offering attractive investment propositions with market-wide appeal. Many opportunities in the renewable energy sector are supported by government incentives to encourage investment. As a result, these tax efficiencies can be used to enhance returns or offer downside risk protection. Biofuel projects are particularly attractive as they usually have large capital expenditure requirements that generate in-year capital allowance relief that can be used in mitigating tax liabilities. These schemes may also contain expenditure on energy-saving plant and machinery, attracting enhanced capital allowances that generate 100 per cent first-year allowances. Such projects tend to be sited in regeneration areas or ‘enterprise zones’, which may also attract Business Premises Renovation Allowance relief on renovation costs. But project finance can be difficult to secure in the current climate. An alternative source of finance, which is starting to attract interest in the renewable energy sector, is ‘retail debt’. Products often referred to as ‘mini-bonds’ with a fixed term and return have been borne out of a clear demand from retail investors. The best-known example is energy firm Ecotricity, which raised £20m in two tranches – offering a four-year term of 6-7 per cent interest with a minimum investment of £500,000. While other investments look towards peer-to-peer lending, doubts surround the regulation and default-rate risks associated with this type of finance. With retail debt – a proven source for raising project finance in the renewable sector – this type of investment can bypass many of the issues faced and secure the necessary funding. Jonathan Turney is an associate director at Future Capital Partners Continue reading
