King of Biofuel?

Ever heard about Chemrec? I had heard about them but never really realised what they were doing until today. Today I visited the stand of Chemrec at the World Bioenergy 2012. The exhibition was a bit slow on the afternoon of the last day, and maybe this was the reason that nobody was around at the Chemrec stand to answer all of my questions.

Basically Chemrec is using Haldor Topsøe technology in converting black liquor to BioDME and Biomethanol in the far north of Sweden. I took this illustration from their brochure. It looks nice, I'm going to see if the graphics are more than just good marketing. How much black liquor do you actually get from one hectare?

Some of the questions that I would have liked to ask are: how much black liquor is there actually around? Do you need any modifications to trucks and infrastructure in order to run on DME?

The New Reality

Sometimes when you think you have it all figured out you get surprised. The way that the market behaves in the by-product oil industry continues to come up with new surprises. Currently close to record level Brent oil prices as well as PFAD prices makes it difficult for some to understand why prices of low quality bio oils have fallen 25-30% since the autumn.

In my optics there are two main reason for this unusual situation:

1. The relatively short and mild winter in Europe in 2011-12 resulted in much lower consumption of bio oil for heating than usual. Many contracted volumes were not consumed and are still in stock. With full stocks, demand is currently low and prices low as well.

2. The latest dioxine scandal in animal feed oils in early 2011 (the Harles and Jentzsch scandal) caused a lot of animal feed oil buyers to tighten their requirements for supplier documentation and analyses. A new EU feed regulation will step into force in August 2012 and will make it more expensive and in many cases very difficult to use lower quality oils for animal feed. This has already lead to more of this oil being used to technical applications.

Market changes and changes in legislation have changed the dynamics in the market forcing the oils to flow in new directions. With very high price levels of PFAD companies in the biodiesel and oleochemical industry that can take in the acid oils are benefiting from this. Ability to take high FFA material is all the rage in the biodiesel industry these days.

Combined with the new requirements for certification according to the Renewable Energy Directive (RED) changes are plenty and the need for people and companies that are competent in understanding and navigating in the constantly changing landscape is increasing.

Red Herring Europe 100 finalist

Wow - next week we will be going to the Red Herring Europe 100 Final in Amsterdam, where we are going to present our company MBP Group to a large group enthusiastic entrepreneurs and investors. We are very proud to be invited for this event, even more so as this event typically has a majority of IT and Web centered companies. We are looking forward to the event - I'm convinced we will meet a lot of interesting people and learn a lot.

Neste Oil goes online with 2.000.000 t per year capacity

Neste Oil from Finland has for some years operated a biodiesel plant in Finland employing a unique technology NExBTL. The technology is unlike the normal FAME transesterification and seems to be quite smart. Neste opened in March their new plant in Singapore of 800.000 t/a capacity and a similar plant in Rotterdam is to follow mid 2011. this is on to of the existing almost 400.000 t/a year capacity in Finland.  According to Neste the two new plants are to run on a mix of palm oil, tallow and rape oil. But think about the scale of these plants...

2 M t/a of palm oil and tallow, how much is that? annual production of palm oil from Malaysia and Indonesia, the worlds largest producers by far is around 45 M t/a and world production of tallow is appr. 8 M t/y, so Neste will be taking care of a significant chunk of world production. Remember that palm is also an important source of  food, feed and feedstock for the oleochemical industry (soap and technical applications) and also tallow is an important feedstock for the oleochemical industry. In my opinion Neste is on the wrong track. They are going to significantly affect the world balance of oil raw material, and good feedstock should not be used for biodiesel, when it can be used for and is displacing other more vital and necessary applications. This is clearly not sustainable.. no wonder Neste is busy claiming how sustainable they will be in the future: http://www.nesteoil.com/default.asp?path=1,41,540,2384,7906,16306 But as we know Jatropha oil is nothing but a future mirage so far, and microbial and algae oil is also still hopes at best. So for the foreseeable future I assume they will stick to palm and tallow. It will be interesting to see if they are able to consolidate these volumes and how this will affect world prices.

Greenpeace have their own way of communicating about the same theme:

A future for the Biodiesel Industry?

A Crisis for the Biodiesel Industry

Just back from participation in the Bursa Malaysia Palm Oil Conference Price Outlook 2011 it is clear that it is not possible to dedicate more vegetable oil for biodiesel production. The biodiesel industry in Europe has for years been in a deep crisis. Expensive plants have gone from hugely profitable to bankruptcy. At the same time as plants overseas in Indonesia, Argentina and Brazil are profiting from national export tax regimes to stay in business. The whole industry strongly depending on the goodwill of politicians as they try to find an appropriate answer to the strategic and environmental problem: crude oil. The Fuel versus Food dilemma, isn't really a dilemma, as it is clear that good quality biological oil (vegetable or animal origin) must be used for human (or animal) consumption, as the global population continues to grow.

Is there a Future for the Biodiesel Industry?

Well, frankly it is difficult to see in the longer term. Worldwide biodiesel plants are scrambling to turn to by-product based feedstock like used cooking oil and tallow. This however will not save the industry, as the relevant by-products is very limited in volume world wide. The rise in demand has already driven up prices for these feedstock to levels where plants are hardly profitable. It seems like nobody took the time to do the math. At the current stage the biodiesel industry is consuming close to 12% of world wide production of biological oils, and it is still only a drop in the ocean in terms of the demand for transportation fuels.

By-product based Feedstock is the new Cool Aid

For many biodiesel manufacturers producing biodiesel from by-products seems to be the way to go. With a better environmental profile, support from NGOs and lower raw material cost this seems to many manufacturers to be the way forward. While we wait for a better solution to our need for carbon dioxide neutral transportation fuels, we in MBP Group are ready to assist biodiesel manufacturers with access to by-product based feedstock from all over the world. MBP Group is ready with a Renewable Energy Directive (RED) compliant supply chain solution for the German marked already from 2011. Germany is the first European market to fully implement the EU RED and we are ready with a solution for this market starting now.

World Biofuels Markets 2011 in Rotterdam

MBP Group is the proud silver sponsor of the World Biofuels Markets 2011 conference in Rotterdam from 22nd to 24th of March. Here it will be exiting to hear the industry's interest in working with MBP on securing suitable by-products for feedstock. At the WBM MBP will also be promoting our own biofuel production in Scandinavia where we produce and distribute by-product based, RED compliant biofuels as an alternative to mineral oil based heating oils.

It will be interesting to hear where the experts think the biofuel industry is going. Is Neste Oil actually going to be able to turn their investments in two biodiesel plants in Rotterdam and Singapore into profitable operations? When will cellulosic bioethanol become a commercial and competitive product? No doubt the World Biofuels Markets will be an interesting event.

If you are going to WBM, drop me a line so we can meet up.

New Company Website

As Sales Director in MBP Group I'm also responsible for our marketing and online presence. The old company webpage had become quite outdated in many aspects and we felt we need an update and a new touch.

In order to get the job done we decided to depend on help from a consultant. Bertel Bolt-Jørgensen had the kind of profile that we were looking for. In fact he was able to add focus, updated knowledge about web technology, pictures and dedication. It turned out to be a good decision to bring him on board.

We wanted to make a web page that reflects the company that we are. We know that our web page is used a lot by our business connections that want to read more about MBP. After they have had contact with our people on the phone, e-mail or in real life. A good web page is a unique possibility to tell in more detail about what we do and our business concept. We wanted to be able to present the company not just in words, so we have made an effort to produce original photos of our factories and storage facilities, products, people and thematic illustrations.

The second feature that we wanted to add with the new web page was multi language. With our offices in more than eight countries we felt that it would be relevant to be able to communicate with more of our customers in their own language. The web page has been launched in English and we are now in the process of rewriting in a number of different languages. We are excited to see the results once we go online - in early December.

In the meantime I invite you to visit our home page - and maybe leave a note on what you like or if you have suggestions for improvements....

What is it good for?

The Blog Crisis

Like many bloggers I have been through the phases of enthusiasm and frustration. This blog is a unique way to tell in a more personal way about the way I see the business that I'm in. On the other hand does anybody care? The internet is a fascinating media, but a challenge to use productively. A couple of events have convinced me that it does make sense.

Advice From an Expert

Talking to a communication expert, he had been given our corporate communication an audit, and he came up with a whole lot of good and relevant comments. On of his final comments were. "I see that you have a blog. A blog is a great communication tool. But if it is not active - you should close it down". For a while I was thinking about closing down or not. The reality is that in a growth company time is often a very limited factor, every day I have a long list of things that I should do that just never gets done because of lack of time. The Time times Urgency times Importance factor just never got big enough for a while.

People Actually Read This

The other day I had the great experience that talking to a person interested in working for our company. I learned that the fact that this person had read my blog actually made a difference and had him given a good understanding about our company and the drive that we get every day from working with a subject that is contributing to a better world.

Regaining Motivation

Also recently I was speaking to a group of international business people about our company. I was realising that the things that I take for granted should not be taken for granted. Many companies are struggling to communicate on the soft values, how they take responsibility, how they work with Corporate Social Responsibility CSR), and how they reduce their carbon dioxide emissions. In MBP CSR is such an integrated part of our corporate DNA that we sometimes take it for granted. I see this blog as a suitable tool to work with improving my understanding of how MBP makes a difference, putting things in perspective and improving communication.

Future Great Subjects

Obviously we have been so occupied with our growth and the challenges that come along with it that this takes up a lot of focus - and so it should be. A good manager need to focus on the right issues at the right time. Over the coming months I look forward to blog about some of these exiting issues.

• Our new company website that we have recently released in a new version.
• Update on the biodiesel industry
• More sophisticated industrial biofuel customers
• Exciting new partnerships in by-product services
• How EU's Renewable Energy Directive (RED) intended to improve biofuel sustainability actually works
• How EU's reform of chemicals registration REACH is actively discouraging reuse of by-products