Mandates and national consumption
Key takeaway: Spain is part of the EU and the overall Renewable Energy Directive; the country has struggled to meet its targets, but is ramping up national targets. Consumption in 2014 hovered around 1.16 million tons.
In July 2015, we reported that the government has announced a new plan to reach 8.5% blending of biofuels by 2020, short of the EU Renewable Energy Directive’s 10% mandate by that date. Since 2013 the country has blended a minimum of 4.1% in diesel and 3.9% in gasoline. The national renewable energy producers association has called the shift a move in the right direction but criticizes that it still falls short of the EU mandate.
In May 2015, we reported that biofuel consumption in 2014 rose 6.6% on the year to 1.16 million metric tons, but that’s far from the record 2.46 million tons consumed in 2012. Demand increased due to an uptick in road transport as well as traders seeking to hoard sustainability certificates ahead of the country finally implementing the Renewable Energy Directive, the last EU member state to do so.
Last week, we reported that national regulator CNMC won’t support a move to combine the ethanol and biodiesel blending quotas into a single quota, a shift that it says would damage the investments that have so far been made in the sector. Specifically, it fears the quota would lead to an over-reliance on biodiesel to fulfill the quota to the detriment of ethanol. The agency does support, however, a shift towards 5% biofuels in 2016 and 8% for 2020 while maintaining the current minimums of .9% for gasoline and 4.1% for diesel, which should provide enough flexibility for retailers to adjust to prices and demand shifts.
Key takeaway: Spain is home to Abengoa, one of the major global players not only in in 1G ethanol and biodiesel, but 2G processes and as a major EPC in the 2G field.
In August 2015, we reported that Abengoa recorded revenues of €3,390 million for the first half of 2015, an increase of 3 % versus the same period of the previous year. EBITDA rose by 9 % to €650 million while net income reached €72 million, a 5 % increase compared to the same period of 2014. Net income for the six months stood at €72 million, a 5% growth compared to 2014.
In the industrial production segment, which includes the bioenergy business, conditions in the second quarter have improved significantly in Europe but remain challenging in the US, impacting margins and EBITDA. As a result, revenues decreased by 2 % to €972 million with EBITDA of €16 million, an 80 % decrease compared to the €84 million in the first six months of 2014.
Abengoa’s geographic diversification continues to be one of the key factors behind its growth and strategy. South America and North America, representing 36 % and 28 %, respectively, of the first six months revenues, continue to represent the key regions for Abengoa. The remaining geographies remain stable with Spain representing 14%, Rest of Europe 10 %, Africa 9 % and Middle East & Asia 3 %.
In new capacity, we reported in April 2014 that the new Green Fuel biodiesel plant in Los Santos de Maimona in Extremadura had come online despite an unstable policy landscape in Europe. The facility will produce biodiesel from soy, sunflower and canola oil. About 30 new jobs will be created and the plant itself is expected to generate between 500 and 700 indirect jobs in the region.
In M&A activity, we reported in February 2014 that Indonesia’s Musim Mas, through its Spanish arm Masol Iberia Biofuels, had purchased the Infinita Renovables biodiesel facility in Ferrol. The government recently approved a supply quota for the facility of up to 300,000 metric tons for this year and next year.
Process Technology Research & Development
Key takeaway: Spain’s researchers are especially active in developing biodiesel feedstocks and process technologies.
In September 2015, we reported that the US Patents Office has granted a patent to 1nkemia IUCT for its second-generation biofuels production process through 2033. The company’s 66th patent produces fuel from fatty acids found in glycerin that can be used instead of biodiesel or as fuel oil in industrial burners at the same price as fossil fuels, the company says. It also claims its UCT-S50 fuel is the most price competitive among all advanced biofuels.
In May 2015, we reported that researchers from the University of Granada teamed with the University of Campinas in Brazil to determine the ideal blend of fish oil and cooking oil to produce a new kind of biodiesel. The project looked at 13 different blends of oils in the biodiesel as well as biodiesel produced from pure oils as the constant. In the end, the ideal mixture was 42.1 percent fish oil and 57.9 percent cooking oil.
In November 2014, we reported that researchers from the Universidad Politécnica de Madrid and the Universidad Miguel Hernández of Elche have found a way to increase biomass production by using sewage sludge as energy crop fertilizers.
The Agroenergy Group from the Universidad Politécnica de Madrid (UPM) and researchers of the Universidad Miguel Hernández (UMH) of Elche have carried out a joint research work to determine the fertilization effects with sewage sludge compost into cynara productivity during three years. The results (“Sewage sludge compost use in bioenergy production – a case study on the effects on Cynara cardunculus L energy crop”) showed that the usage of this fertilizer has clear positive effects since the biomass production and the oilseeds increased up to 40% and 68% respectively, being this a substantial increase of energy crop production.
In August 2014, we reported that researchers at the University of Cordoba obtained a new biofuel similar to biodiesel using the 1,3-selective transesterification reaction of sunflower oil with ethanol using as biocatalyst a Rhizopus oryzae lipase (ROL) immobilized on Sepiolite, an inorganic support. The studied lipase was a low cost powdered enzyme preparation, Biolipase-R, from Biocon-Spain, a multipurpose additive used in food industry. In this respect, it is developed a study to optimize the immobilization procedure of these lipases on Sepiolite.
Feedstocks & Supply Chain
Key takeaway: Spain has been active not only in advanced terrestrial crops such as camelina, but also in microalgae development.
In January 2015, we reported that researchers at the University of Almeria have developed and patented a method to dewater microalgae and reduce the “soup” they live in by as much as a third without boosting the overall energy consumption in the biodiesel’s production lifecycle. Rather than using a centrifuge to dehydrate the microalgae, the process developed is more like osmosis.
In May 2014, we reported that Omega Grains, via its Argentine subsidiary Chacraservicios, has signed a cooperation agreement with the Technological Institute for Food and Agriculture (ITAGRA) and the regional agricultural cooperative of Carrión de los Condes to trial camelina for later use as a biodiesel feedstock. A test plot is already underway in the area, with the agreement set to expand those trials. Chacraservicios is already producing camelina in Argentina and expects to begin biodiesel production there next year.
In June 2014, we reported that Neiker-Tecnalia has demonstrated that Chlamydomonas acidophila microalgae can be successfully used to absorb ammoniacal nitrogen produced in effluent from anaerobic digestion of organic waste. By co-producing algae with biogas, the ammonium can be absorbed instead of released into the atmosphere, while the resulting algae can then also be used as a biogas feedstock, an animal feed, compost or even lutein.
We also noted that Neiker-Tecnalia had coordinated a research project to cultivate microalgae to produce lipids for obtaining biodiesel in a more cost-effective and more environmentally sustainable way. Researchers have optimized all the phases in the production process, from cultivation right up to transformation into biodiesel. The result is a quality biodiesel that is obtained when the microalgae biomass used contains at least 30% of reserve lipids.
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