OFI February 2020

OILS & FATS INTERNATIONAL

FEBRUARY 2020 â–ª VOL 36 NO 2

ANTOXIDANTS

Natural preferences

BIODIESEL

Replacing palm oil in Europe

CHINA

A 21st century Silk Road WWW.OFIMAGAZINE.COM Cover Feb 3.indd 1

27/01/2020 14:06

CONTENTS

OILS & FATS INTERNATIONAL

IN THIS ISSUE – FEBRUARY 2020

FEATURES

China

NEWS & EVENTS

Antioxidants

27 18

China’s massive Belt and Road Initiative will enable trade across Central Asia to and from Europe, and includes new ports, railways and roads. But this new Silk Road also faces geopolitical risks and has been accused of being a ‘debt trap’

Natural preferences Antioxidants play a vital role in preserving the quality of oils and fats products and extending their shelf life, with consumer preference leading to the growth of natural antioxidants

A 21st century Silk Road

Olive oil

Comment

2

Beyond meat

News

4

Biofuels/Europe

Prices fall as coronavirus spreads

Biofuel News

10

Eni fined for ‘green’ diesel campaign

Biofuel/Renewable News

12 20

22

Replacing palm oil in biodiesel

With the EU phasing out the use of palm oil in biofuels as part of its updated Renewable Energy Directive, what can replace this important feedstock?

Tradition and technology Argentina is the largest olive oil producer and exporter in the Americas and is developing its industry by embracing both tradition and modern technology

NGOs object to French tax benefit for PFAD biofuels

Transport News

14

Palm oil delayed at Indian ports

Biotech News

16

EPA reaffirms safety of glyphosate

Diary of Events

17

International events listing

Statistics

32

www.ofimagazine.com

Contents Feb.indd 1

World statistical data

OFI – FEBRUARY 2020

1

10/02/2020 08:14

EDITOR'S COMMENT

OILS & FATS INTERNATIONAL

VOL 36 NO 2 FEBRUARY 2020

Beyond meat The past few years have seen a growing trend in plant-based foods and rising numbers of vegans and flexitarians.

According to a Plant Based Foods Association report last July, US plant-based food sales grew by 31% between April 2017-April 2019 to total nearly US$4.5bn.

EDITORIAL: Editor: Serena Lim serenalim@quartzltd.com +44 (0)1737 855066 SALES:

“The plant-based meat category alone is worth more than US$800M in the USA, with sales up 10% in the past year, and plant-based meat accounting for 2% of retail packaged meat

Sales Manager: Mark Winthrop-Wallace markww@quartzltd.com +44 (0)1737 855114

sales,” the report said.

Sales Consultant: Anita Revis anitarevis@quartzltd.com +44 (0)1737 855068

Plant-based foods can be grouped into several categories – dairy alternatives; ‘pseudo’ meat that mimicks the texture and taste of real meat; and lab-grown or ‘cultured’ meat.

PRODUCTION: Production Editor: Carol Baird carolbaird@quartzltd.com CORPORATE: Managing Director: Tony Crinion stevediprose@quartzltd.com +44 (0)1737 855164 SUBSCRIPTIONS: Elizabeth Barford subscriptions@quartzltd.com +44 (0)1737 855028 Subscriptions, Quartz House, 20 Clarendon Road, Redhill, Surrey RH1 1QX, UK © 2020, Quartz Business Media ISSN 0267-8853 WWW.OFIMAGAZINE.COM

A member of FOSFA Oils & Fats International (USPS No: 020-747) is published eight times/year by Quartz Business Media Ltd and distributed in the USA by DSW, 75 Aberdeen Road, Emigsville PA 17318-0437.

Periodicals postage paid at Emigsville, PA. POSTMASTER: Send address changes to Oils & Fats c/o PO Box 437, Emigsville, PA 17318-0437 Published by Quartz Business Media Ltd Quartz House, 20 Clarendon Road, Redhill, Surrey RH1 1QX, UK oilsandfats@quartzltd.com +44 (0)1737 855000 Printed by Pensord Press, Gwent, Wales

@oilsandfatsint

Oils & Fats International

The oils and fats industry is playing its role in the pseudo meat area, chiefly by supplying plant-based fats. In November, Bunge Loders Croklaan launched a range of palm- and shea-based fats for meatless burgers. Impossible Foods’ burger and pork alternatives both use coconut oil to replicate the melting profile of meat fat (see p6), while Beyond Meat uses fats such as cocoa butter, and coconut, sunflower and canola oils for its burger, beef and sausage alternatives.

“The trend towards veganism is perhaps symptomatic of a wider societal trend towards increased reflection about what we are eating, how we are living and the impact we are having on the environment,” says a 2018 UK Agriculture and Horticulture Development Board (AHDB) report. “But there is a contradiction between the desire people have to be healthy and eat more natural, unprocessed foods, and their consumption of some alternatives which tend to be more processed.”

The meat substitute Quorn, for example, is a mycoprotein fermented in vats from a fungus found in soil, in which glucose, fixed nitrogen, vitamins and minerals are added, that is then heat-treated to remove excess levels of ribonucleic acid, explains the Guardian newspaper. The key ingredient in Impossible Foods’ meat alternatives is leghemoglobin, which is extracted from the roots of soya plants and inserted into a genetically engineered form of yeast that is fermented.

Veganism also remains a difficult diet to stick to permanently and the lifestyle can result in anaemia and iodine deficiency.

However, the plant-based space remains a growth opportunity and the so-called ABCD agribusiness giants are already investing in this area. ADM has joined forces with hamburger leader Marfrig to produce vegetable protein products in Brazil. Bunge holds shares in Beyond Meat and Cargill has invested in cultured meat firms Aleph Farms and Memphis Meats, and pea protein producer PURIS. Investors will still have to work hard to turn a profit.

“Currently, the plant-based market is tiny in comparison to meat and dairy,” the AHDB report says.

The key drivers for consumers remain price, appearance, quality and taste, and plantbased foods will still need to deliver on these fronts to gain long-term traction with consumers.

Serena Lim – serenalim@quartzltd.com

2 OFI – FEBRUARY 2020

Comment.indd 1

www.ofimagazine.com

30/01/2020 14:45

LEADER IN OIL PRE-TREATMENT PLANTS FOR HVO AND BIODIESEL PRODUCTION.

www.technoilogy.it

EXPERTS IN: EDIBLE OIL EXTRACTION AND REFINING • OLEOCHEMICALS • BIODIESEL PRODUCTION • LUBE OIL RE-REFINING

NEWS

Prices fall as coronavirus spreads Fears over a drop in demand due to the novel coronavirus (nCoV) outbreak in China have pushed down prices of soyabeans, palm oil and other commodities.

March soyabean futures dropped 4.75 cents to close at US$8.97/bushel while March soyabean oil slipped 50 cents to close at 31.52 cents/pound, as of 27 January, according to Food Business News.

In Malaysia, crude palm oil prices closed at US$661.12/tonne and palm kernel oil at US$809.73/tonne on 28 January, the first day of trading after the Lunar New Year break, falls of 9.88% and 11.59% respectively, ICIS wrote.

“The spread of the virus has led to a lockdown of cities in China and curbs in travel, which would likely lead to lower usage of

IN BRIEF SWITZERLAND: BASF Nutrition & Health announced on 26 November that it is launching an omega-3 fatty acid product to help patients manage Non-Alcoholic Fatty Liver Disease (NAFLD), its first market in continental Europe for the product.

“Hepacor will be marketed, sold and distributed as a food for special medical purposes across Switzerland."

BASF said NAFLD patients suffered from EPA and DHA deficiency and Hepacor corrected this.

Increasing levels of these important omega-3 fatty acids could improve the liver’s ability to process excessive pre-existing fat and, at the same time, inhibit the creation of new fat from dietary carbohydrates, BASF said.

edible oils in the food industry,” ICIS said.

However, Reuters quoted Malaysian Palm Oil Board director general Ahmad Parveez Ghulam Kadir saying on 4 February that while the outbreak had reduced consumption of edible oil at restaurants, this would be compensated by higher demand for packaged foods such as instant noodles – which used a lot of palm oil – as people stayed at home to reduce their exposure.

Indonesian Palm Oil Association Gapki said the nCoV outbreak was likely to hamper Indonesia’s palm oil exports. “I hope the outbreak will not last too long since all export activities to China have been stopped temporarily,” the Jakarta Globe reported Gapki executive director Mukti Sardjono as saying on 4 February.

The total number of nCoV cases globally as of 10 February was 40,614, with 40,171 in China, Worldometers, said. There had been 910 deaths, all but two in China.

Meanwhile, shipping firms were reducing the number of vessels connecting China to Canada, India, the USA and West Africa with idle Chinese factories curtailing demand and limited or no demand from Chinese buyers for seaborne commodities such as coal, crude oil and iron ore, CNN Business wrote on 6 February.

Stock markets in China also saw their biggest daily fall in five years on 3 February by 8%, the Guardian reported. After just minutes of trading, a range of commodities fell by the maximum allowed in one day, including iron ore, crude oil and palm oil.

Fish oil boosts semen and sperm count

Fish oil supplements can boost semen volumes and total sperm counts in men, according to a study published in the Journal of the American Medical Association (JAMA) on 17 January.

Study co-author Tina Kold Jensen, a professor of public health and environmental medicine at the University of Southern Denmark,

said fish oil was likely to have these effects because "a rich fatty acid content" in the sperm cell membrane "is critical for proper sperm function".

"The sperm cell membrane plays a critical role in key fertilisation events and omega-3 in the sperm membrane increases as the sperm matures," Jensen told news agency UPI. Fish oil is a source of the omega-3 fatty acids, docosahexaenoic acid (DHA) and eicosapentaenoic acid (EPA), which cannot be manufactured in the body but must be consumed.

The Danish study looked at 1,679 men, 98% of whom reported using fish oil supplements during the prior three-month period and 53 of whom said they used the supplement for 60 or more days over the course of that period, UPI said.

Compared to men with no supplement intake, those who took a fish oil supplement for less than 60 days had up to one-third greater semen volumes, while those who used it for more than 60 days had semen volumes nearly two-thirds higher. Fish oil users also had larger testicular size.

AstraZeneca abandons trial for fish oil-based supplement AstraZeneca has abandoned a fish oil -based drug trial because of its “low likelihood” of benefitting patients with increased cardiovascular (CV) disease risk, the global pharma firm announced on 13 January.

Epanova contains a free fatty acid formulation of the omega 3 fatty acids, eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA).

AstraZeneca's Phase III Strength trial evaluated the effect of 4g/day of its Epanova capsule, compared to a corn oil pla-

4 OFI – FEBRUARY 2020

General News.indd 2

cebo, on reducing the risk of major adverse CV events in patients on statin therapy with mixed dyslipidaemia (MDL) who were at high risk from CV disease. It was carried out on 13,086 patients in 22 countries.

“MDL includes patients with raised triglyceride levels between 175-499 milligramme/decilitre (mg/dL) and low HDL [good] cholesterol,” Astra Zeneca said.

According to the Motley Fool, Epanova won US Food and Drug Administration approval in 2014 as an adjunct to diet to

reduce triglyceride levels in adult patients with severe hypertriglyceridemia (when triglyceride levels are 500mg/dL or more).

The company acquired Epanova in 2013 but faced intense competition from other fish oil drugs and legal challenges, with US pharma firm Amarin suing AstraZeneca over alleged patent infringements in 2014.

“The discontinuation of the study means Epanova won’t become the big winner AstraZeneca hoped it would be,” the Motley Fool said. www.ofimagazine.com

10/02/2020 09:17

Give your hydrotreater catalyst more life.

DOUBLE IT.

Crown delivers maximum contaminant removal to extend hydrotreater catalyst life.

Get the cleanest possible feedstock delivered to your hydrotreater and achieve up to double catalyst life with Crown. Our rugged, robust Renewable Diesel Pretreatment System is guaranteed to meet product specs for all common contaminants and drastically improve plant uptime by reducing the need for catalyst changeovers. Backed by the construction of 50 biodiesel plants, design of 6 renewable diesel pretreatment plants, and a propriety database of feedstock specs and results, Crown’s Renewable Diesel Pretreatment System protects your investment now, and in the future.

Protect your hydrotreater and your Renewable Diesel operation with Crown.

Edible Oils | Biodiesel | Renewable Diesel | Oleochemical Contact Crown today 1-651-639-8900 or visit our website at www.crowniron.com

NEWS IN BRIEF CANADA: Swiss food giant Nestlé SA is teaming up with Canadian plant protein firms, Burcon and Merit, to accelerate its development of plant-based meat and dairy ingredients.

Nestlé said its plant-based product range included soya, pea and wheat-based burger patties, sausages, mince meat and chicken fillets. It also offered pea and oat-based dairy alternatives; almond, coconut and oatbased creamers; and a range of non-dairy ice creams.

The partnership would utilise Burcon’s plant protein extraction and purification technology, while leveraging Merit’s new plant protein production plant in Manitoba which was expected to begin operations later this year.

Olam restructures to focus on ingredients and agribusiness Global food and agribusiness Olam International announced on 20 January that it is re-organising its business portfolio to create two new operating groups focused on food ingredients and global agribusiness.

The Olam Food Ingredients (OFI) group will comprise the company’s businesses in cocoa, coffee, edible nuts, spices and dairy.

Olam Global Agri (OGA) will include the businesses of edible oils, grains and animal feed, rice, cotton and commodity financial services.

Explaining the rationale behind the move, Olam CEO Sunny Verghese said: “By simplifying our businesses across two distinct and coherent groups, each with a clear vision for profitable growth, it sharpens our focus and provides opportunities to capitalise on key market trends.

“We believe this will enable us to explore potential carve-outs and IPOs and attract additional investors who are aligned with the vision of these two new groups in order to maximise the

value of our business.”

Olam’s edible oil portfolio includes palm, soyabean and sunflower oils serving the retail, food manufacturing, food service and personal care sectors, as well as speciality fats for confectionery and food manufacturing, according to its website.

It sources palm oil from its own 64,000ha of planted area in Gabon as well as from third-party suppliers in Indonesia and Malaysia.

It also operates edible oil processing and refining facilities in Gabon, Mozambique, Nigeria and the UK. In Mozambique, its facility produces vitamin-fortified soya and palm oils under the Dona brand and sunflower oil under the Sunseed brand. It also produces laundry soap under the Bingo brand.

In Nigeria, it operates Ruyat Oil Limited, which refines crude vegetable oils and markets refined, bleached and deodorised palm oil and palm olein.

Soya and coconut oil in new plant-based Impossible Pork Soya protein and coconut and sunflower oils are among the ingredients of Impossible Foods’ new plant-based pork.

The US firm’s second plantbased meat substitute was launched on 7 January, followits signature Impossible Burger launch in 2016.

“We chose Impossible Pork as our next product because pork is the most popular meat in the world, accounting for about 38% of meat production worldwide,” the company said.

The main ingredient responsible for mimicking the taste and texture of Impossible

Foods’ meat substitutes is soya leghemoglobin, a source of heme, which is a key protein responsible for meat’s colour

and savoury flavour. The company extracts leghemoglobin from the roots of soya plants, which is inserted into a genet-

ically engineered form of yeast that is fermented, allowing it to multiply and grow.

Impossible Foods was founded in 2011. Following its 2016 launch of Impossible Burgers, Burger King announced last August that Impossible Whoppers were officially available across the USA. Last year, the company also made its products available in US grocery stores.

To replicate the fat in hamburgers, Impossible Foods uses flecks of coconut fat, which melt in a similar manner to beef fat.

Dutch margarine's anti-palm oil campaign ruled 'misleading' A Dutch margarine brand’s anti-palm oil advertising campaign has been ruled to be misleading and inaccurate, the European Palm Oil Alliance (EPOA) reports.

“The Flower Farm (TFF) now has to adjust its packaging, television commercial, video, social media messages and website,” the EPOA said on 17 December.

According to the Board of Appeal (CvB) of the Dutch Advertising Code Committee (RCC), TFF’s statement that a family saved 30m2 of rainforest each year when it used its margarine was incorrect and in violation

6 OFI – JANUARY 2020

General News.indd 3

of the Environmental Advertising Code, the EPOA said.

The CvB judgement confirmed a RCC November ruling that TFF’s campaign was misleading, inaccurate and indiscriminate.

TFF had appealed against part of the RCC ruling.

“In the Netherlands, all margarine is deforestation-free,” the EPOA said. “In its marketing campaign, TFF is erroneously opposing sustainable palm oil, and sets up consumers against margarines containing sustainable palm oil.”

“The CvB considers all claims suggesting that (all) tropical rainforest must be destroyed for palm oil incorrect and therefore misleading. Also misleading is the claim that palm oil exterminates animals (including orangutans),” the EPOA added.

The EPOA is a business initiative of palm oil refiners and producers comprising Bunge Loders Croklaan, Cargill, Fedepalma, the Indonesian Palm Oil Association, the Malaysian Palm Oil Council, the Netherlands Oils and Fats Industry (MVO), Olenex, Sime Darby Oils and Unigra. www.ofimagazine.com

10/02/2020 09:17

As unique

AS YOUR FINGERPRINT EACH OIL IS DIFFERENT. SO ARE OUR CUSTOMIZED SOLUTIONS FOR PURIFYING IT. LET US SUPPORT YOU IN LEAVING YOUR PRINT ON THE MARKET – WITH OUR TONSIL® SPECIALTY ADSORBENTS.

WWW.CLARIANT.COM/TONSIL #PartneringWithYou

•

First-class technical expertise, exceptional lab capacities and broad product range

•

Global mining and production network enabling high supply chain flexibility

•

Tailor-made formulations removing unwanted impurities while minimizing 3-MCPD/GE

•

Dedicated product line for bio- and renewable diesel

•

Sustainable environmental footprint

NEWS IN BRIEF BRAZIL: US agribusiness giant Bunge announced on 20 December that it had agreed to sell its margarine and mayonnaise assets in Brazil to Brazilian food processing firm Seara Alimentos SA. “The sale includes three production plants and the brands used for these two products,” Bunge said.

As part of the deal, the companies had negotiated supply, toll manufacturing and brand license agreements. Other branded products including packaged oils, shortenings and speciality oils would remain in Bunge’s portfolio.

Bunge said the completion of the sale was subject to regulatory approval.

ARGENTINA: Newly elected president Alberto Fernández’s government ramped up export taxes on soyabeans, grains and their derivatives on 14 December to raise revenue needed to tackle a mountain of looming sovereign debt, Reuters reports.

The decision was published in Argentina’s Official Gazette with the decree eliminating a fixed export duty of 4 pesos (US$0.21) per exported US dollar.

Rates on soyabeans, soya oil and soya meal and derivatives rose from 24.7% to 30% and those on grains, including sunflowerseed, increased from 6.7% to 12%.

Consuming coconut oil has no heart health benefits Consuming coconut oil leads to higher levels of LDL or ‘bad’ cholesterol compared with other vegetable oils and holds no benefits with regards to body fatness, inflammation, blood sugar, or heart health, reports the Cardivascular Research Foundation’s TCTMD website.

The findings were the result of a new meta-analysis of 16 international trials comparing the effects of at least two weeks of coconut oil consumption against palm and non-tropical vegetable oils on cardiovascular risk factors.

Senior author Rob van Dam said the researchers conducted their study because of how widely coconut oil was promoted as being beneficial.

“Compared with non-tropical vegetable oils, coconut oil significantly increased total cholesterol, LDL cholesterol, and HDL ['good'] cholesterol but not triglycerides, body measurements, glycemia, or C-reactive protein,” TCTMD wrote on 16 January.

Compared with palm oil, coconut oil also significantly increased total cholesterol

by 25.57 milligrammes per decilitre (mg/dL), LDL cholesterol by 20.50mg/dL, and HDL cholesterol by 2.83 mg/dL, but did not impact triglycerides.

“Our results on the adverse effects of coconut oil compared with alternative cooking oils on LDL cholesterol concentrations thus align with dietary recommendations to replace saturated fat with polyunsaturated fat,” the authors wrote.

Van Dam said coconut oil consisted of about 90% saturated fat, higher than the proportion in butter or lard.

New fat for ice cream and diary products

Cargill Brazil has launched a new fat that can reduce the saturated fat content in ice cream, creams and dairy drinks by up to 30%, says DairyReporter.

Launched in December, Lévia+c was a blend of vegetable oils (mainly soyabean oil) and emulsifiers that had the same physical structure as a traditional fat but a saturated fat content of 35% and a maximum trans fat content of 2%.

It required no change in product formulation and also slowed down melting, left no residual fat and prevented recrystallisation, Cargill said.

Lévia+c's technology was based on the ‘structuring’ of liquid oils, which promoted the strengthening of the crystal fat network, DairyReporter quoted Fernando Toledo, strategic marketing manager for fats and oils at Cargill, as saying. “The formation of more stable crystals in the correct amount, shape and size provides rapid crystallisation and product stability."

Glencore becomes majority owner of Argentina's Renova Switzerland-headquartered Glencore Agriculture has become the majority owner of Argentinian soyabean processor Renova through the acquisition of a further 16.67% stake in the firm from its joint venture partner, Vicentin, World Grain reported on 13 January.

Renova was established by Glencore and Vicentin in 2006 and operates a soyabean crushing and processing plant in Timbúes producing meal, oil and lecithin, as well as a site in San Lorenzo with plants for neutralising and refining oils, and for biodiesel and glycerine production.

8 OFI – FEBRUARY 2020

General News.indd 4

Sergio Gancberg, Glencore Agriculture's regional director for South America, said the company's most recent investment in Renova was expanding the processing capacity of the Timbúes crush plant, which was built in 2012 and expanded in 2019.

The plant is located on the right bank of the Coronda river in Santa Fe province and has the capacity to crush 32,500 tonnes/ day of soyabeans. It has its own port facility and loads soyabean oil, soyabean meal and corn for export.

“Through our majority ownership of Renova [66.67%], we will continue to provide

an efficient supply chain for the Argentinian industry and the region’s expanding production of soyabeans and corn,” World Grain quoted Gancberg as saying.

Glencore Agriculture sources, handles, processes and markets agricultural commodities and products around the world including grains, oilseeds, pulses, rice, sugar and cotton. It operates more than 270 storage and handling facilities, 35 processing and refining facilities, 23 port terminals, 180 ocean-going vessels and markets more than 70M tonnes of commodities, according to its website. www.ofimagazine.com

10/02/2020 09:17

WE’RE PASSIONATE ABOUT PACKAGING LET’S MEET OLAF

Since the introduction of our new filling machine Olaf, Niverplast realised a lot of installations in the Oils & Fats industry. If you have a semi-liquid product like margarine, butter, palm oil etc. which must be bulk packed into boxes or buckets, Niverplast is your partner. The image shows an example lay-out how such a packaging line can look like in your factory. All different modules and machines like case erector, bag inserter, filler and bag sealer are designed and built by Niverplast.

COMBIPLAST Our CombiPlast machine is our combined case erector and bag inserter. With capacity for over 250 boxes on the magazine, you have a nice buffer which you can refill whenever you want. The box erector takes the unfolded box on both, short and long side, and fold it into a perfect 90 degree angle. With the next step the box is transported towards the bag inserting module where the bag will be perfectly placed in the box. With this mechanically way of bag placing you avoid polyentrapment into the product and blowing ‘dirty’ air into the bag. The bags are stored in a 2-sided bag magazine. Both sides can store about 250 bags, and can be refilled during production. The machine can run 24/7 production without any down-time of the machine.

OLAF Our latest development, the liquid filler Olaf, Niverplast completed her portfolio for complete packaging lines. In the machine will the box (or bucket) transported to lifting conveyors. These lifting conveyors will lift the case or bucket up to the correct height to prevent splashing. This height is automatically set due pre-programmed recipes in the HMI. This means that the piping and filling heads are always at a fixed position, that’s why no changing parts are needed; all is done automatically.

While the conveyors are being lifted, the weighing scale will rise a few centimetres above the lifting conveyor for an accurate weighing. Because of the 2-headed filling system we have a constant flow of the product. The filling heads have a bulk dosing and fine dosing filling session, this will assure the right filling volume with a minimum give-away.

VARIOSEAL For a secured package of product we can offer a full automatic bag sealing or folding machine. When the box enters the machine, it will be aligned for the perfect sealing position. When the case is in position, the lifting table brings up the box into an upwards position where it holds the bag. After a slightly and adjustable vacuum the machine will seal the bag.

After the bag is sealed, the box will be transported to the case top closer where the box will be taped. Optionally the closed box can be checked for a correct weight on a check weigher. Thereafter, the case goes through the metal detection with integrated reject module if a piece of metal is detected.

If you would like more information or if you want an obligation-free quotation, you can contact: Maarten Janssen janssen@niverplast.com Jillert Koster: j.koster@niverplast.com

LET’S IMPROVE BUSINESS TOGETHER www.niverplast.com

BIOFUEL NEWS

Eni fined for ‘green’ diesel campaign Italian oil and gas company Eni Spa has been fined US$5.6M for deceiving consumers over its ‘green’ diesel in TV, newspaper, digital media and petrol station advertisements, Biofuels International reported on 20 January.

The Italian Competition and Market Authority imposed its highest possible fine of €5M on Eni for claiming its Eni Diesel+ fuel had a positive impact on the environment and reduced greenhouse gas emissions.

Eni Diesel+ included 15% hydrotreated vegetable oil (HVO), which it produced using palm oil and waste feedstocks such as used cooking oil, Biofuels International wrote.

“It is particularly deceitful to use the denomination ‘green diesel’ and the qualifications ‘green’ and ‘renewable’ to refer to

IN BRIEF USA: On 19 December, the Environmental Protection Agency (EPA) released its final rule for the 2020 Renewable Fuel Standard (RFS) and 2021 biomassbased diesel volumes.

It left 2021 biomassbased diesel volumes at 2020 levels, or 11bn litres, while slightly increasing the 2020 advanced biofuel targets from its proposed 22.9bn ethanol-equivalent litres to 23bn gallons, Biodiesel Magazine wrote.

The 2019 volume for advanced biofuels was set at 22.3bn litres, while the 2019 biomass-based diesel volume was 9.5bn litres.

Biodiesel producers have criticised the final rule for the lack of growth in advanced biofuels, including biodiesel, and for not restoring lost litres granted through small refinery exemptions (SREs), Biodiesel Magazine wrote. Since January 2017, SREs had more than quadrupled to 85.

▪ On 20 December, US President Donald Trump reinstated a US$1/gallon blenders tax credit for biodiesel and renewable diesel retroactively from its expiry on 1 January 2018 through to 31 December 2022.

10 OFI – FEBRUARY 2020

Biofuel news.indd 2

the HVO component of the product” due to the indirect land use change emissions associated with palm oil use,” the competition authority said.

The ruling follows a complaint filed by Italian consumer association Moviemento Difesa del Cittadino (MDC), environmental NGO Legambiente and campaign group Transport & Environment (T&E).

The Wall Street Journal reported that Eni would appeal the decision.

According to Biofuels International, Eni had been running ads on TV, print and online platforms since 2016 but withdrew its campaign several months ago. The competition authority’s ruling followed three extensions requested by Eni to provide further data to support and prove its case.

Eni produces around 1M tonnes/year of HVO. Biofuels International said Eni was the second largest producer of biodiesel from palm oil in the EU. ▪ Indonesia state energy company PT Pertamina has ended a year-long partnership with Eni to build a 1M tonne/year ‘green diesel’ refinery in Indonesia processing palm oil and would work with US engineering firm Honeywell UOP instead, Reuters reported on 29 January.

Pertamina chief executive Nicke Widysaid Eni required internationally recognised certification for palm oil even though the oil would have been processed in Indonesia. Honeywell supplies petroleum refining, gas processing and hydrotreated vegetable oil (HVO) technology.

Indonesia files WTO lawsuit against EU

Indonesia has filed a lawsuit at the World Trade Organization (WTO) against the EU, claiming the bloc’s restrictions on palm oil-based biofuel are unfair, the country’s trade ministry said in a statement on 15 December.

The European Commission (EC) concluded last year that palm oil cultivation resulted in excessive deforestation and should not count towards renewable energy targets, Reuters said.

The world’s largest palm oil producer had

repeatedly said it would challenge the EU’s renewable energy directive (REDII) at the WTO’s dispute settlement body.

Indonesia sent a request for consultations with the EU on 9 December as the initial stage in the lawsuit, the trade ministry said.

The consultation phase would last for 60 days and if no solution was found, the EU could then request that the WTO set up a panel to adjudicate on the issue, Reuters wrote.

“With this lawsuit, Indonesia hopes the EU can change its REDII and delegated regulation policies,” Indonesian trade minister Agus Suparmanto said.

The EU Delegated Regulation 2019/807 (delegated act) has defined palm oil as a highrisk indirect land use change (ILUC) biofuel feedstock, the use of which must be capped at 2019 levels until 2023, and then phased out by 2030.

According to the EC, the EU biodiesel market is worth an estimated US$10bn/year, with imports from Indonesia worth around US$448M. In 2018, the bloc consumed more than 7M tonnes of palm oil, with some 65% of it used for energy.

ADM to sell ethanol assets or form joint venture Agribusiness giant Archer Daniels Midland (ADM) is in advanced talks to sell or turn its ethanol dry mills into a joint venture, reports Bloomberg.

The 118-year old agricultural commodities company was currently in negotiations with fewer than five interested parties, CEO Juan Luciano said in an interview on 8 January.

“We want to find either the right buyer or partner for these things, and at this point in time, we haven’t made that decision, but we are close.”

The US ethanol industry has been hit by lost demand due to the country’s trade war with China and record numbers of blending exemptions granted to oil refineries.

In 2016, ADM put its ethanol assets up for sale before deciding to keep the business, Bloomberg said. In October last year, it announced that it would create Vantage Corn Processors as its stand-alone ethanol subsidiary, effective 1 December. www.ofimagazine.com

06/02/2020 08:59

MORE THAN ENERGY

Efficient high temperature energy solutions with steam and thermal oil.

Services by GekaKonus: Engineering | Design | Consulting Commissioning | After Sales Service

GekaKonus GmbH · Siemensstraße 10 · D-76344 Eggenstein-Leopoldshafen Tel.: +49 (0) 721 / 9 43 74 -0 · Fax: +49 (0) 7 21/ 9 43 74 - 44 · info@gekakonus.net · www.gekakonus.net

Pure-Flo B80

BANK ON B80 USE LESS. SAVE MORE. Pure-Flo® B80 is the most active natural product for bleaching palm oil. Its high level of activity means dosage can be reduced without compromising performance. Our Pure-Flo® B80 customers report as much as a 30% reduction in bleaching earth usage and a beneficial reduction in 3-MCPD ester formation.

To start significantly lowering palm oil operating costs, visit BankonB80.com

www.ofimagazine.com

OFI – FEBRUARY 2020

11

BIOFUEL/RENEWABLE NEWS IN BRIEF BRAZIL: British multinational oil and gas firm BP and US agribusiness giant Bunge completed the formation of a joint venture on 2 December that combined their bioenergy and sugarcane ethanol businesses in Brazil.

BP Bunge Bioenergia had 11 biofuels sites in five Brazilian states and a total crush capacity of 32M tonnes/ year of sugarcane, capable of producing more than 1.5bn litres of ethanol and 1.1M tonnes of sugar, BP said.

ITALY: Italian bioplastics firm Bio-On Spa announced its bankruptcy on 20 December. The company was commercialising polyhydroxyalkanoate (PHA) resins, a biodegradable polyester made by bacterial fermentation, Plastic News said.

FINLAND: Renewable diesel producer Neste said on 19 December that the world’s first industrial lubricant with 95% bio-based content was being launched using its renewable isoalkane as a key component.

AT Renewable Penetrating Lubricant would be launched

by Finland’s AT-Tuote in Brazil, Canada, Germany, Mexico, USA and Nordic countries in spring.

Neste said its renewable isoalkane was produced from waste and residue oils and fats, with applications in paints, coatings and lubricants.

NGOs object to French tax benefit for PFAD biofuels Several NGOs are objecting to France’s return of palm fatty acid distillate (PFAD) to a list of biofuels benefitting from a tax exemption, Euractiv reported on 24 January.

Since 1 January, palm oilbased biofuels in France have not been eligible for public funding, following a Parliamentary decision last November.

However, France’s Directorate General of Customs published a technical note on 19 December indicating that PFAD-based biofuels would still be able to benefit from the tax exemption, Euractiv said.

The issue was discussed at a 21 January meeting concerning the supply of feedstocks for French oil giant Total’s biorefinery in La Mède. The biorefinery, commissioned last July, can produce 500,000 tonnes/year of hydrotreated vegetable oil but has attracted controversy over its use of imported palm oil as a feedstock.

Total has pledged to process no more than 300,000 tonnes/ year of palm oil or less than 50% of the total volume of raw materials needed at the plant.

It said it planned to import 100,000 tonnes/year of PFAD

for La Mède, which it said was waste from palm oil production that could not be used in food because it was too acidic, Teller Report said on 21 January.

Finnish renewable diesel producer Neste said palm oil refining yielded around 3.5-5% PFAD and annual volumes totalled some 2.5-3M tonnes.

The NGOs which met with Ecological Transition Minister Elisabeth Borne and Total representatives on 21 January were contesting the Directorate General of Customs’ decision with France’s Council of State, Euractiv wrote.

Stable demand for fatty acids and alcohols

Fatty acid demand for the cosmetics and personal care industries is set to be stable to strong for 2020, reports ICIS. “There are some expectations that fatty acid consumption will rise in line with a growing population,” ICIS wrote on 27 December.

However, there were concerns over supply levels amid some shortages at the end of 2019.

Palm-based oleic acid supply was tight at the end of fourth 2019, following some production issues, but this was likely to improve in first quarter 2020.

There were shortages of tallow-derived material, particularly oleic acid, in the second half of 2019 due to an increased use of raw tallow for biodiesel production in Europe. This was likely to continue in 2020.

“As a result, tallow fatty acid availability is set to be short for at least the first half of 2020.”

Meanwhile, the European fatty alcohols market was likely to see stable demand for 2020.

“The key downstream market for fatty alcohols is surfactants, which are used in applications such as detergents,” ICIS said. “Surfactants demand is generally steady because consumption of end-use applications is stable year to year.”

Fatty alcohols were most commonly used with ethylene oxide (EO) and propylene oxide (PO) to produce surfactants in Europe.

“The traditional cracker maintenance period in the second quarter is expected to impact EO and PO supply and, in turn, could limit demand for fatty alcohols.”

There was likely to be a peak in buying interest just before and after the maintenance period.

Indorama completes US$2bn acquisition of Huntsman assets Thailand’s Indorama Ventures Public Company Limited (IVL) completed its US$2bn acquisition of Huntsman Corporation’s chemical intermediate and surfactants businesses on 6 January.

The deal is the largest in Indorama’s history and includes manufacturing units in Australia, India and Texas, USA. The intermediate petrochemicals leader has acquired most of Huntsman’s operations at Port Neches, Texas including a 12 OFI – FEBRUARY 2020

Renewable.biofuel news.indd 2

235,867 tonnes/year mixed-feed cracker; a 1M tonnes/year ethylene oxide (EO)/ monoethylene glycol (MEG) unit; and a propylene oxide/MTBE plant, which also produces surfactants and amines, according to S&P Global Platts. Huntsman’s linear alkyl-benzene (LAB) manufacturing site at the Chocolate Bayou site south of Houston and a surfactants plant in Dayton, Texas, were also included in the deal.

LAB is sulphonated to produce linear

alkylbenzene sulphonate (LAS), a biodegradable surfactant used to produce detergents, cleansers and lubricant additives.

IVL said the deal would provide unprecedented entry into industries serving consumers’ daily needs including products used in home and personal care consumer goods. Additional Capex planned for the high value-added surfactants business would add incremental EBITDA of US$60M by 2022, it said. www.ofimagazine.com

06/02/2020 09:47

OFI Half Page Horizontal Ad – Increase Profits.indd 1

1/30/20 4:07 PM

• Thermal oil plants • Steam plants • Hot water plants • Natural steam plants • Heat recovery plants • Heat exchangers • Air pre-heaters • Accessories 19th - 21st November 2019 Kuala Lumpur Convention Centre Malaysia

www.ofimagazine.com

OFI – FEBRUARY 2020

13

TRANSPORT NEWS

Palm oil delayed at Indian ports Thousands of tonnes of refined palm oil were delayed or stuck at various Indian ports after the world’s biggest edible oil buyer introduced restrictions on refined palm oil imports, according to Reuters.

“More than 30,000 tonnes have been stuck at various (Indian) ports. All theses vessels were loaded before the government restricted imports of refined palm oil,” Reuters quoted a Mumbai-based vegetable oil dealer, who declined to be named.

India changed the import status of refined bleached and deodorised (RBD) palm oil and RBD palm olein on 8 January to help domestic refiners raise their plant utilisation rates, Reuters said on 20 January.

However, tensions between India and Malaysia have also grown over New Delhi’s new citizenship law passed in December

IN BRIEF SYRIA: Russia is planning to boost its presence in the Middle East by investing US$500M to build a grain hub at Tartus port, Reuters reported on 17 December.

Construction of the necessary infrastructure could begin this year at the port, which Russia had rented for 49 years in 2017, Deputy Prime Minister Yury Borisov said. “Russia intends to organise the work and build a new commercial port.”

World Grain wrote that the plans also envisaged a railway across Syria and Iraq that would link Syria’s Mediterranean coast with the Persian Gulf.

WORLD: Global bulk logistics firm Hillebrand has unveiled a new 40ft container flexitank that can transport non-hazardous liquids in temperature-controlled conditions.

The flexitank incorporated wave breaking technology to dampen the surging of liquid during transport and prevent container bulging, said Hillebrand, which rebranded in October to unify previously acquired firms Trans Ocean Bulk Logistics and Satellite Logistics Group (SLG).

14 OFI – FEBRUARY 2020

Transport news.indd 2

offering amnesty to non-Muslim illegal immigrants and its revoking of Indian-administered Kashmir’s special constitutional status last August.

Indian Ministry of External Affairs spokesperson Raveesh Kumar told The Times of India that the government’s restriction on RBD palm oil and RBD palm olein was product-specific and not country-specific.

“When you are looking at issues pertaining to the import of any product, there are basically two factors – one is the commercial decision and the other could be defined by the trade policy and, in this case, it is being defined by the trade policy.”

However, Kumar added that the state of relationship between any two countries was important.

“That happens to be a factor,” he said.

Kumar explained that there were three categories for imports into India – open, restricted and prohibited and the status of RBD palm oil and palm olein had been amended from ‘free’ to ‘restricted’, meaning an importer would require a licence or permission for the inbound shipment.

India was the world’s largest importer of vegetable oil, buying nearly 15M tonnes/ year, of which palm oil comprised 9M tonnes, The Times of India wrote.

Muslim-majority Malaysia is the world’s second largest producer of palm oil, at 19M tonnes/year, after Indonesia, which produces around 43M tonnes/year.

Shipping data from Refinitiv showed Indian buyers cutting Malaysian palm oil imports sharply in late 2019 and increasing Indonesian orders, Reuters said.

New IMO sulphur emissions rule in force

The International Maritime Organization (IMO) has reported a relatively smooth transition to its new sulphur emissions regulations and a significant reduction already in the amount of sulphur oxide (SOx) emnating from ships, Clean Shipping International (CSI) reported on 22 January.

The IMO’s new global sulphur emissions cap came into effect on 1 January, dropping from 3.5% to 0.5% in areas outside current emission control areas (Baltic Sea, North Sea, North America and US Caribbean), where the limit is 0.1%.

Ship owners must either use low sulphur fuel to comply,

switch to alternative fuels such as liquefied natural gas, or install exhaust gas cleaning systems or scrubbers on their ships to clean up emissions.

“Prices for compliant fuels – very low sulphur fuel oil (VLSFO) and marine gas oil – (MGO) rose quickly initially but now appear to be stabilising,” CSI quoted the IMO as saying.

“As of 20 January, 10 cases of compliant fuel being unavailable had been reported.”

The IMO said the next important target was fast approaching, when carrying non-compliant fuel oil on board ships, for use on the ship, would be banned from 1 March unless the ship was

fitted with a scrubber.

According to Norway’s Yara Marine, while most vessels had shifted to compliant fuels, more than 4,000 vessels were, or were soon to be, equipped with SOx scrubbers.

The availability of heavy fuel oil (HFO) had not decreased, with scrubber-equipped ships able to bunker with HFO in every port where required, Yara director of sales and public affairs Kai Laatun wrote on 23 January.

The price differential between HFO and compliant fuels was currently around US$300/tonne, making the business case for installing SOx scrubbers extremely attractive, he said.

Most vessels had been fitted with an open loop system, shifting to compliant fuel for their short stints in areas where SOx washwater discharge was not allowed.

Vessels trading more regularly opted for hybrid scrubber systems capable of sailing with zero washwater discharge where this was mandatory.

“Pure closed loop systems are nearly non-existent,” Laaatun said, adding that he expected the SOx scrubber market to pick up significantly. www.ofimagazine.com

06/02/2020 11:36

BIOTECH NEWS

EPA reaffirms safety of glyphosate The US Environmental Protection Agency (EPA) has reaffirmed that the weed killer chemical, glyphosate, is safe and not likely to be carcinogenic to humans.

German chemicals and pharmaceuticals firm Bayer AG is currently facing around 42,700 lawsuits in the USA claiming that its glyphosate-based pesticide, Roundup, causes cancer.

However, in its interim registration review decision published on 22 January, the EPA said it had “thoroughly evaluated the potential human health risk associated with exposure to glyphosate and determined that there are no risks to human health from the current registered uses of glyphosate and that glyphosate is not likely

IN BRIEF CHINA: China has approved a new genetically modified (GM) soyabean developed

by US seed and agrichemicals firm Dow AgroSciences for import, Bloomberg reported on 30 December.

China also approved a new type of GM papaya and renewed import permits for 10 biotech crops including one corn variety, four soyabeans and four canola strains. The seeds – produced by firms including BASF, Bayer AG’s Monsanto unit and Dupont Pioneer – can be imported into China until December 2022.

Bloomberg said China was the world’s largest canola importer, second largest corn consumer and bought some 60% of traded soyabeans.

EUROPE: The European Commission (EC) has authorised eight GMOs for food and feed use in the EU for 10 years. They include four maize varieties and the renewal of soyabean MON 89788, soyabean A270412, cotton LLCotton25 and oilseed rape T45.

The authorisations did not cover cultivation and any products produced from these GMOs would be subject to EU labelling and traceability rules, the EC said on 28 November.

16 OFI – FEBRUARY 2020

Biotech news.indd 2

to be carcinogenic to humans”.

The EPA did find that glyphosate presented “low or limited potential risks” in birds and mammals.

Bayer said on 31 January that glyphosate products were the most widely used herbicides in the world.

“The EPA’s latest decision adds to the long-term evaluation of leading international health authorities that these products can be used safely,” said Bayer board of management member Liam Condon.

The agency said that it had completed a usage analysis for glyphosate by analysing agricultural market research data from 2012 to 2016.

“Approximately 281M pounds (127,460

tonnes) of glyphosate was applied to 298M acres (120.6M ha) annually in agricultural settings, on average. Most glyphosate was applied to soyabean (117.4M pounds or 53,252 tonnes/year), corn (94.9M pounds or 43,056 tonnes/year), and cotton (20M pounds or 9,072 tonnes/year).”

Bloomberg wrote on 24 January that Roundup claims had surged following three jury verdicts awarding plaintiffs almost US$2.5bn last year. Bayer was appealing the verdicts, which judges had slashed to US$191M. Bayer acquired the Roundup brand as part of its US$63bn acquisition of US biotech and agrichemicals firm Monsanto last year.

Corteva accelerates biotech soya rollout US seed and crop protection firm Corteva Inc is accelerating production of its Enlist E3 biotech soyabean seeds and complementary herbicides in Canada and the USA over the next five years.

“Corteva expects E3 planted acreage projections in 2020 to approach 20% of the US market – double original expectations,” the company said on 30 January.

Enlist E3 soyabeans are genetically modified to tolerate 2,4-D choline, glyphosate and glufosinate herbicides.

Corteva said that starting in 2021, it would significantly reduce its volume of products with Bayer’s Roundup Ready 2 Yield and Roundup Ready 2 Xtend herbicide tolerant traits.

Bayer’s Xtend soyabeans are resistant to both glyphosate

and dicamba. The German firm is currently facing around 42,700 US lawsuits claiming its Roundup glyphosate-based pesticide causes cancer, while dicamba has drawn complaints for drifting to neighbouring fields and killing plants not genetically modified to resist it.

Corteva, which spun off last

year after a merger of Dow Chemical and Dupont, also said it had recently received import authorisation in China for its Conkesta soyabean insect control traits, which would be offered as a stack with the Enlist E3 soyabean herbicide trait in Latin America in the early 2020s.

ChemChina-Sinochem agricultural merger ChemChina and Sinochem have announced a mega merger of their agricultural assets to form a new holding company called Syngenta Group, Global AgInvesting reported on 7 January.

State-owned chemical firm ChemChina bought Switzerland-based Syngenta in 2016 for US$43bn. Syngenta is one of the world’s largest producers of agrichemicals and seeds, including biotech oilseeds.

Global AgInvesting said ChemChina planned to move 100% of Syngenta’s shares into the new holding company, along with 74% of the shares of pesticide manufacturer ADAMA, which

ChemChina also bought in 2016 from Israel’s Discount Investment Corp in a US$$1.4bn.

Syngenta Group would then acquire major agricultural assets from Sinochem “to further deepen the reform of state-owned enterprises” and strengthen cooperation between the two giants.

In December, Reuters reported that ChemChina had approached Chinese state-backed investors for up to US$10bn in funding as part of a reorganisation of its agrichemicals business ahead of a public float. ChemChina was planning to list Syngenta on China’s technology-focused STAR market by the middle of this year, Reuters said.

www.ofimagazine.com

06/02/2020 08:41

DIARY OF EVENTS New insights on deep frying at Hagen symposium in March The 10th International Symposium on Deep Frying being organised by the German Society for Fat Science (DGF) will be held on 8-10 March in Hagen, Germany.

“The aim of the symposium is to provide participants with new information on frying and discuss the latest findings,” DGF says. “The knowledge provided will give a solid basis for the production of high-quality products and better foods.”

The event is aimed at industrial food producers, food service and restaurant operators, laboratories, suppliers involved in the production of fried food, and re-

searchers or those interested in the frying process, assessment of used frying oils or deep-frying in general.

“Since the beginning of the 21st century, much has changed in the area of deep frying,” DGF says. “The physical and chemical changes that occur during the frying process are now better understood, as are the dynamics of heat and mass transfer. This understanding served the later development of mitigation strategies against the formation of acrylamide in fried food, first detected in 2002.

“New processes and additives to im-

prove the stability of the frying medium have also been introduced and new frying media have been developed with a view on health aspects or due to stability reasons.”

There has also been very rapid development in instrumental analytics, data processing and the application of statistics to better understand the frying process, as well as sensory evaluation, DGF says.

Contact: DGF congress team Tel: +49 69 7917-533 E-mail: info@dgfett.de. Website: www. dgfett.de/meetings/aktuell/hagen2020

2-4 March 2020 POC 2020 – Palm & Lauric Oils Price Outlook Conference and Exhbition Kuala Lumpur, Malaysia www.pocmalaysia.com 3-5 March 2020 8th RSPO Latin American Conference Campeche, Mexico rspo.org/news-and-events/events/ 8th-rspo-latin-american-conferencemarch-35-2020 8-10 March 2020 10th International Symposium on Deep Frying Hagen, Germany www.dgfett.de/meetings/aktuell/ hagen2020 23-25 March 2020 World Bio Markets Amsterdam, the Netherlands www.worldbiomarkets.com 13-15 May 2020 ICIS World Surfactants Conference Hyatt Regency, New Jersey, USA www.icisevents.com/ehome/ index.php?eventid=200191757& 3-6 June 2020 EPPRA 2020 Congress Villamoura, Portugal efpra.eu/congress-2020-to-be-help-inportugal 9-10 June 2020 International Grains Conference Congress Centre, London, UK www.igc.int/en/conference/ confhome.aspx www.ofimagazine.com

Diary Feb 2020.indd 1

OFI – FEBRUARY 2020

17

20/01/2020 13:47

ANTIOXIDANTS

Natural preferences Oils and fats are susceptible to many different environmental and chemical effects that can affect the quality of the product. One of the most significant issues in oil production is oxidation and its prevention. When an oil product undergoes oxidation, its chemical properties change as it comes into contact with atmospheric chemicals, light, heat, and other factors.

“Oxidative rancidity plays an important role in the deterioration of fats and oils,” says Kelly De Vadder, marketing manager of Kemin – an Iowa, USA-headquartered global ingredient manufacturer supplying speciality ingredients for human and animal health and nutrition, pet food, aquaculture, nutraceuticals, food technologies, crop technologies and textile industries.

“The most characteristic changes are the development of an unpleasant taste and smell, which become more obvious during the oxidation process. Additional changes in colour, viscosity, density and solubility also take place.”

De Vadder explains that edible oils consist of approximately 96% triglycerides, composed of different fatty acids. Other compounds or groups of compounds, such 18 OFI – FEBRUARY 2020

Antioxidants.indd 2

Antioxidants play a vital role in preserving the quality of oils and fats products and extending their shelf life. While synthetic antioxidants are an effective solution, increased scientific and legal scrunity of them – along with consumer preferences – are leading to the growth of natural antioxidants Ile Kauppila as free fatty acids and phospholipids, are also present. Fatty acids are susceptible to oxidative processes resulting in a wide range of volatile and non-volatile degradation products.

“Therefore, one of the major challenges for the oil processing industry is to maintain the high quality of the product after processing,” says De Vadder.

Antioxidants to the rescue

Antioxidants are chemicals that can be used to slow down the effects of oxidation. In edible oil production, they help in extending the shelf life and preserving the quality of oil and fat products. While there are other ways to reach similar effects, such as reducing the effects of sunlight by packaging oils in dark glass bottles, antioxidants play an essential part in maintaining the quality of

edible oils and fats.

The chemistry of oxidation reactions is complex as it involves the effects of both heat and moisture in the final products.

Dipak Patil, from the Department of Chemistry at the Sardar Vallabhbhai Patel Arts and Science College, in a 2013 study ‘Role of Antioxidants in Stability of Edible Oil’, divides fat deterioration into four main categories: • Hydrolysis causes triacylglycerols in oils to form free fatty acids and glycerol, resulting in a “soapy” taste.

• Rancidity is an umbrella term used to cover a large number of unpalatable off-flavours generated through the auto-oxidation (or self-oxidation) of polyunsaturated fatty acids.

• Reversion is a type of flavour and odour degradation that is especially u www.ofimagazine.com

27/01/2020 14:18

Make the most of your oil!

Adding efficiency to your business – with the plant-based ingredients from Maxfry®! That turn simple vegetable oils into capable deep-frying oils with superior stability. Improving the heat transfer to the food and demonstrably reducing the formation of acrylamide (by 30 – 50 %). For better performance and more food safety.

More information at www.maxfry.com

ANTIOXIDANTS u

•

associated with unsaturated oils high in linoleic and/or omega-3 fatty acids, such as soyabean and fish oils.

Polymerisation describes the cross-linking of unsaturated fats between two carbon atoms.

What these chemical processes have in common is that they are all chain reactions that have similar end results – the formation of so called free radicals in the oil product.

“Antioxidants interrupt these oxidation chain reactions in order to enhance the oxidative stability of the oil or fat,” De Vadder says. Antioxidants present in the oil product give away their hydrogen atoms, which bond with the free radicals generated by oxidation, thus giving the product a longer shelf life and making it last longer during cooking processes, especially frying.

Classification of antioxidants

Antioxidants can be classified in several ways. Based on their mechanism of action, they can be divided between primary and secondary antioxidants. Primary antioxidants are free radical scavengers that delay the initiation stage or interrupt the propagation step of auto-oxidation, while secondary antioxidants slow down the rate of oxidation reactions that are already happening.

According to Mostafa Taghvaei and Seid Mahdi Jafari in a 2013 study ‘Application and Stability of Natural Antioxidants in Edible Oils in Order to Substitute Synthetic Additives’, antioxidants can be further divided into two main groups – synthetic and natural antioxidants.

Synthetic antioxidants include chemicals such as butylated hydroxyanisole (BHA), butylated hydroxytoluene (BHT), propyl gallate, and tertiary butylhydroquinone (TBHQ), out of which the latter is possibly the most widely used. These antioxidant products are, as their name implies, manmade through various chemical processes.

“These synthetic antioxidants are chemically synthesised petroleum-based products used primarily to retard lipid oxidation in order to preserve and stabilise the refined oils and fats within a food product,” explains De Vadder. “On the other hand, natural antioxidants – such as tocopherols – are derived from a natural source. Most of the powerful natural antioxidants are found in plants.”

Tocopherols are the most commonly found antioxidants in nature and they are also the most widely used antioxidants in edible oils. Other natural antioxidants include tocotrienols, squalene, 20 OFI – FEBRUARY 2020

Antioxidants.indd 4

Essential oils and extracts from various plants, such as rosemary, are used to produce natural antioxidants

phytosterols, phospholipids, corn oil or rice bran oil-derived steryl ferrulates, and sesame oil lignans such as sesamol, sesamin and sesamolin.

Additionally, essential oils and other extracts from various plants – such as citrus peel, grape seed, green tea, olive, oregano, pomegranate, rosemary, sage and thyme – have in recent years been studied and brought into the marketplace.

For instance, Kemin is the world’s first and – at the time of writing – only SCS Global Services-certified producer of rosemarybased natural antioxidants for edible oils.

Some studies, as cited by the researchers, have found that BHT, for example, had adverse carcinogenic effects on the livers, kidneys and lungs of rats, while others have found that BHA and BHT are cytotoxic in rodents. However, they also point out that these effects were observed only at high concentrations that far exceed those permitted in human foods under any legislation. Nonetheless, the researchers conclude that it seems “logical” to replace synthetic antioxidants with natural ones if there is any doubt of their safety.

Markets prefer the natural

A natural challenge

De Vadder tells OFI that, in recent years, there has been a push in the markets towards replacing synthetic antioxidants with natural free radical scavengers.

“Even though they are effective antioxidant solutions in edible oils, retailers and consumers would like to avoid synthetic antioxidants, such as TBHQ and BHA,” she says.

The reasons for this market trend can most likely be found in increased scientific and legal scrutiny directed at synthetic antioxidants, in addition to consumers preferring natural products. Synthetic antioxidants are, as De Vadder says, efficient, but Taghvaei and Jafari note that despite rigorous safety tests and legal concentration limits in final food products, there are still doubts about their longterm health effects.

But natural antioxidants are not perfect either. In a 2018 study titled ‘Enhancing Oxidative Stability and Shelf Life of Frying Oils with Antioxidants’, Namal Senanayake points out that tocopherols exhibit the highest antioxidant activity when their concentration in the product is relatively low. At high concentrations they may even behave as pro-oxidants. Additionally, he states that the efficacy of natural tocopherols that have been added to oils during the frying process is debatable.

However, when tocopherols are combined with the appropriate emulsifiers and speciality oils, they can be very effective in delaying the formation of total polar compounds (TPC) and di- and polymerised triglycerides (DPTG) and as such prolong the frying life of oils.

There is also the issue that only a www.ofimagazine.com

27/01/2020 14:18

ANTIOXIDANTS handful of natural antioxidants are available on the market. These include rosemary extract, mixed tocopherols, sage extract and green tea catechins.

The working mechanisms and effect of some natural antioxidants not yet on the market are not perfectly understood, and therefore more research is needed in the field. There is also the issue of money – while some natural antioxidants might be effective, they may not be economical to produce at mass scale. Taghvaei and Jafari state that this is especially the issue with some medicinal plants and their essential oils.

Furthermore, De Vadder adds that the production of antioxidants is not simple, and there are questions that must be answered before a producer can start up operations.

“Antioxidants come in all forms and shapes. They are not always directly applicable in a food system and, for this reason, customers often require tailormade solutions to match their specific needs. These can range from changing liquid plant extracts to dry products (or vice versa), making oil soluble antioxidants water dispersible so that they can be applied to a water or a brine, or enable water soluble antioxidants to be applied into lipids.

“Furthermore, many antioxidants that work in synergy with each other are also insoluble with one other. To combine these water- and oil-soluble antioxidants in a physically stable blend, producers like Kemin must find the optimal ratio of specific emulsifiers that can hold these products together,” explains De Vadder.

Legislation issues

Legislation can sometimes become an issue for antioxidant producers as well.

As mentioned, the amount of synthetic antioxidants added into food products are strictly regulated. “Various regulatory organisations, including the US Food and Drug Administration (FDA), have placed tolerance limits on the amounts of synthetic antioxidants that can be added to fats and oils (typically below 200ppm),” wrote Senanayake.

Natural antioxidants are also subject to sometimes restrictive laws. For example, the 16 December 2008 Regulation (EC) No 1333/2008 of the European Parliament and of the Council on food additives requires all added antioxidants to be declared on food packaging by their category with either their name or E-number.

However, this requirement has caused confusion among producers due to the fact that some natural antioxidants www.ofimagazine.com

Antioxidants.indd 5

manufacturer to provide all the necessary information to enable the user of the additive to make the right labeling choices.

De Vadder says the statement has raised a lot of questions and that it requires clarification. “It is, however, clear that plant extracts should be reviewed on a case-by-case basis, taking in account all criteria of the food additive definition.

Ingredients with multiple properties need to be assessed in their specific context of use.”

Markets looking up

Although packaging oils in dark glass bottles can reduce the effects of sunlight on oil degradation, antioxidants also play an essential part in maintaining oil quality

can be used as either flavourings or antioxidants – or both. In an attempt to clarify the situation, the European Flavour Association (EFFA) released on a best practice guidance document on 31 May 2019 stating that what needed to be printed on the food label depended on the primary role of the additive.

More precisely, the EFFA stated that “if the primary intended use is to impart/ modify the flavour of the food and the technological effect is secondary, then its use may be considered as ‘not being intended for a technological function’.

However, if the ingredient has been selectively extracted/enriched to obtain technologically active constituents and its main use is to deliver a technological function other than imparting/modifying the odour and/or taste in the final food, then it is considered an additive according to the Food Additive Regulation (EC) No 1333/2008.” EFFA also made it the responsibility of the flavouring

Still, De Vadder and Kemin are positive about the future. She says that the markets are looking up and demand for antioxidants – particularly natural ones – will continue to grow.

“This growth is driven by the growing demand of processed and convenience food. Furthermore, the industry is moving away from palm oil and replacing it with alternative vegetable oils. However, these oils are less saturated, which makes them more susceptible towards oxidation. In this case, antioxidants would be required to ensure the final product has a similar oxidative stability and shelf life.”

Market research companies agree with Kemin’s projection. According to Mordor Intelligence, key market players in the global food antioxidant sector – including Archer Daniels Midland Co, BASF, Barentz Group, Camlin Fine Sciences, Frutarom, EI Du Pont De Nemours and Co, Eastman Chemical Co, Kalsec, Kemin Industries, and Koninklijke DSM NV – can expect growth at CAGR 6% between 2019 and 2024.

North America and Europe are expected to grow the fastest due to easy availability of food and heavy government food subsidisation, especially in the USA. In Asia-Pacific, the major share of the market is held by Australia, China, India, and Singapore. Product development by the key companies in this region will trigger further market growth, Mordor Intelligence projects.

All in all, De Vadder concludes that antioxidants will continue to be needed and the industry is ready to tackle new challenges. “The effects of all processing steps on the quality of lipids in the final application are considerable. All these parameters influence the oxidative stability. Antioxidants need to be added to increase food lipid stability during and after processing. For sure, the future will evolve with new technologies, packaging solutions and ingredients to extend the shelf life,” she says.  Ile Kauppila is a freelance journalist and former assistant editor of OFI OFI – FEBRUARY 2020

21

27/01/2020 14:18

BIOFUELS

Replacing palm oil in biodiesel With the EU phasing out the use of palm oil in biofuels as part of its updated Renewable Energy Directive, what can replace this important feedstock?

Gabriel Day

22 OFI – FEBRUARY 2020

EU biodiesel.indd 2

The EU used 2.4M tonnes of palm oil as a biodiesel feedstock in 2018, making up 18.2% of the 13.4M tonnes it produced that year.

Palm oil is a hugely important feedstock for the industry but with EU legislation phasing out its use because of sustainability and deforestation concerns, what will fill the feedstock gap?

The move against palm oil has come in the form of an updated Renewable Energy Directive (RED II) covering the 2021-2030 period, which comes into force on 1 January 2021.

RED II sets a new overall renewable energy target of 32% by 2020 and a 14% target for the transport sector, with a clause for a possible upwards revision by 2023. It includes specific criteria for high-risk indirect land use change (ILUC) biofuels.

In May 2019, the EU published the Delegated Regulation 2019/807 (delegated act), which determines what high-risk ILUC feedstocks are. These will be capped at the 2019 levels until 2023 and then phased out by 2030.

High-risk ILUC feedstocks are defined as those for which the share of expansion of the production into land with high

carbon stock is higher than 10% since 2008, with an annual expansion of more than 1%. Only palm oil falls under this definition, while soya and rapeseed oils are considered low-risk ILUC feedstocks.

The delegated act allows producers to certify their feedstock as low-risk ILUC. In this case, the feedstock will need to comply with the RED II’s general sustainability criteria as well as be produced through “additional measures”, such as on unused or abandoned land or by smallholders (less than 2ha).

Speaking at the Argus Biofuels conference in October, Dr Caroline Midgley, director of biofuels and oleochemicals at LMC International, said there was no data on the number of plots of less than 2ha, which was extremely small by agricultural standards.

Therefore, obtaining International Sustainability & Carbon Certification (ISCC) on such small plots would be prohibitively expensive.

The Malaysian government did offer subsidies to smallholders to certify their land under its Malaysian Sustainable Palm Oil (MSPO) scheme but very few had taken advantage of this, making it seem very unlikely that any smallholders would u

www.ofimagazine.com

03/02/2020 09:50

UNITED ENGINEERING (E) CORPORATION, INDIA E: sales@uec-india.com www.uec-india.com

www.tolsa.com

MINCLEAR® High Absorptive Bleaching Earths based on Natural and Activated Clays.

Engineered for Productivity HIGH CAPACITY OIL PRESSES COLD PRESSING TECHNOLOGY DEWATERING PRESSES

Excellent for the treatment of Vegetable Oils & Biofuel Feedstocks • Chlorophylls removal.

• Low oil retentions.

• Excellent filtration rates.

• Phosphorus and metal traces removal.

• Reduction of the precursors of 3-MCPD and GE. • Effective stability of oils.

TOLSA, S.A. Parque ParqueEmpresarial Empresarial Las LasMercedes Mercedes C/ Campezo, C/ Campezo, 1, 1, Ed. Ed.4,4,Pl. Pl. 2ª 2ª 28022 Madrid 28022 -Madrid Spain Tel.:Tel.: +34+34 913 913 220 220100 100 industrial@tolsa.com info@tolsa.com www.ofimagazine.com

OFI – FEBRUARY 2020 23

u

Figure 1: Current EU FAME consumption by feedstock, member state (million tonnes)

Source: LMC International

BIOFUELS methyl ester (FAME) is important.

“The FAME market most affected by the palm oil ban will be France, Germany, Italy and Spain as these countries have high levels of palm methyl ester consumption,” she said (see Figure 1, left).

An alternative option was used cooking oil methyl esters (UCOME), the current largest markets being Germany and the UK, which both produced and imported it.

Tallow methyl ester (TME) was mainly used in Germany and Italy while Poland, Norway and Sweden consumed the bulk of their FAME in the form of rapeseed oil methyl ester (RME), mainly supplied by local producers.

Poland passed legislation to introduce double-counting, a system which encouraged the use of second generation waste-based biofuels produced from feedstocks such as UCO or category 1 or 2 tallow (not meant for human consumption), which could lead to an increase in the use of waste-based FAME. The alternative to FAME – hydrotreated vegetable oil (HVO) – was rising in production in Europe, with palm oil playing a vital role.

Figure 2: Current EU HVO consumption by feedstock, member state (million tonnes) u be able to obtain ISCC certification.

Indonesia and Malaysia – the world’s two largest palm oil producers – have repeatedly said they would challenge the ILUC legislation at the World Trade Organization (WTO).

Indonesia’s trade ministry said on 15 December that it had filed a lawsuit at WTO after assessing scientific studies and holding meetings with associations and businesses involved in the palm oil sector.

“With this lawsuit, Indonesia hopes the EU can change its RED II and delegated regulation policies,” Trade Minister Agus Suparmanto said.

24 OFI – FEBRUARY 2020

EU biodiesel.indd 3

Feedstocks for FAME

Source: LMC International

HVO feedstocks

The EU produced a total of 13.4M tonnes of biodiesel in 2018, with palm oil making up 2.4M tonnes (18.2%), the third largest feedstock behind rapeseed and waste oils, Midgley told the Argus Biofuels conference.

Comparatively, rapeseed made up 41.3% of feedstocks used in EU biodiesel in 2018 (a significant decline since its peak in 2008, when it accounted for 72%), while waste oils made up 29.8%.

For biodiesel production in France, Germany, Italy and Spain (some of the world’s largest producers), palm fatty acid

HVO capacity in the EU is expected to rise from 2M tonnes recorded in 2017, to 5M tonnes in 2030, the Argus Biofuels conference heard.

However, the increased capacity would not be enough to keep up with growing demand, suggesting that Europe would become short of HVO from 2020 onwards.

Palm oil was key in current French and Spanish HVO production (see Figure 2, left), Midgley said.

A notable example is French oil giant Total’s biorefinery in La Mède, France, which can produce 500,000 tonnes of HVO. The plant, which began commercial production in July 2019, has faced controversy over its use of palm oil as a feedstock.

“In an agreement with the government, Total pledges to process no more than 300,000 tonnes/year of palm oil – less than 50% of the total volume needed – and at least 50,000 tonnes of Frenchgrown rapeseed, creating another market for domestic agriculture,” the company stated in July 2019.

Finnish renewables company Neste is currently the largest HVO producer in Europe and among the largest in the world, with 1M tonnes of capacity at its production facility in Rotterdam, the Netherlands.

Neste – a member of the Roundtable on Sustainable Palm Oil (RSPO) since 2006

www.ofimagazine.com

03/02/2020 09:50

– cut its share of palm oil in its feedstock mix from 90% palm oil, to 80% waste and residue materials such as UCO, in 2018.

Finland and Sweden are the only EU member states that consume tall oil-based HVO, where it is manufactured locally and is also double-counted.

Finnish energy firm St1 plans to produce tall oil-based HVO production in Gothenburg, Sweden, starting from 2021 with a planned plant capacity of about 125M litres.

Meanwhile, also in Gothenburg, Swedish petroleum company Preem currently produces about 160M litres of HVO using mainly tall oil as a feedstock.

The company recently increased its production capacity to 220M litres and is reportedly planning to further expand to 1.3bn litres in 2023.

Sweden also consumed very large quantities of tallow-based HVO, mainly imported from Finland and the Netherlands, Midgley said.

As another alternative, countries could look at higher use of PFAD, which currently only made up 3.7% of biodiesel feedstocks and met the RED II’s definition of “processing residues”, which were not subject to ILUC legislation.

Midgley said that large quantities of HVO produced from PFAD were consumed in Italy, Norway and Sweden.

However, PFAD double-counting in Europe would cease this year, making it unattractive to EU biodiesel producers trying to reach green standards, possibly leading to higher demand for other waste feedstocks.

Furthermore, there were other issues that came with using PFAD.

Non-food feedstocks

PFAD supply was linked with crude palm oil (CPO) growth. Although not eligible for EU double-counting from 2020, it may have value as it bypassed the EU limits on crop-based FAME and was not

Figure 3: Vegetable oil and waste oil prices – NW Europe except for DCO (US$/tonne) affected by ILUC legislation. Midgley said its diversion to biodiesel would require replacement in feed.

As an alternative, UCO had huge potential if collection rates in Asia and South America reached EU and US levels.

In Asia, the illegal dumping of UCO in landfill was still a problem.

Fats, oils and greases (FOG) were available in small volumes from sewers and could be collected by installing grease traps. Midgley said a few biodiesel plants that could use highly acidic feedstocks could handle FOG. In terms of tallow, supply depended on how animals were rendered, making growth limited if rendering practices continued unchanged. For example China’s rendering industry consumed the entire animal, leaving no waste. If tallow was diverted from feed use, it would need to be replaced, probably by palm products

Source: LMC International

BIOFUELS

such as PFAD. Tall oil, despite Sweden consuming it in large quantities, had very limited potential as it grew in line with wood pulp demand, being only a byproduct of this industry. It was also not a true waste, being processed into fatty acids and rosin, with the pitch used as a heating oil replacement.

Distillers corn oil (DCO) was not much used in the EU, due to limited supply, and did not qualify for double-counting.

However, more EU dry mills may install this technology. Midgley said that in the USA, supplies would increase due to improving yields and installation of corn kernel fibre separation technology.

Fish oil was an alternative feedstock that had gone relatively untapped.

According to Midgley, there was some potential to extract oil from fish waste u such as heads and tails, perhaps 1M to

www.sepiolsa.com Ph: +34 949 010 000 bleachingearth@sepiolsa.com

www.ofimagazine.com

EU biodiesel.indd 4

OFI – FEBRUARY 2020

25

03/02/2020 09:50

u

BIOFUELS 2030

Source: LMC International

2018

Figure 4: EU biodiesel production by feedstock, 2018 vs 2030 u 2M tonnes globally. Neste currently used fish oil in its HVO process.

Midgley said an underlying issue was the rising prices of waste oils, which had increased more than food oils since the EU introduced double-counting in 2010.

“The price of UCO and tallow have gone from a discount to a premium over palm oil.” (see Figure 3, p25).

Meanwhile, DCO remained very cheap relative to soya oil, possibly because it did not qualify for double-counting in Europe and animal feed was still a major end use.

PFAD tended to track palm oil prices very closely, making the price of this byproduct not too dissimilar to palm.

Efforts being made

Meanwhile, the Malaysian palm oil industry (the world’s second largest) is making efforts to ensure the sustainable production of palm oil, with Primary Industries Minister Teresa Kok stating that 60% of the country’s oil palm planted area had been certified under its MSPO scheme as of October 2019, with 313 palm oil mills or 69.9% of the total 448 mills in Malaysia already certified.

Figures from the European Federation for Transport and Environment (T&E) show that the use of palm oil in EU biodiesel production actually grew by 3% in 2018 while its use in food and animal feed dropped by 11%.

Individual EU member states have been making their own moves against palmbased biofuels.

Norway, reported a 70% drop in palm oil feedstock use in 2018, from 317M litres in 2017 to 93M litres, according to figures from the Norwegian Environmental Industry. In December 2018, Norway 26 OFI – FEBRUARY 2020

EU biodiesel.indd 5

Used cooking oil as a biofuel feedstock has huge potential if collection rates in Asia and South America can reach EU and US levels

became the first country to exclude biofuels based on high deforestation risk feedstocks (such as palm oil), effective this year.

In addition, France decided to ban the use of palm oil altogether in biofuels from 31 December 2019.

A new French regulation passed last year ended the eligibility of biofuels, such as palm oil methyl ester, for public funding and operators will no longer be allowed to include palm oil-based biofuels in their

mass balances, Germany’s Union for the Promotion of Oil and Protein Plants (UFOP) said in July.

This move will have a negative impact on Total’s La Mede biorefinery, with CEO Patrick Pouyanne warning in September that the decision could mean losses of up to US$88M at its plant.

According to LMC, around half of the 2.4M tonnes of palm oil in EU biodiesel production will be replaced by other vegetable oils like rapeseed oil and soya oil. However, these oils are expensive so producers will seek cheaper alternatives.

“Therefore, the remainder will come from waste oils and PFAD because they are suitable feedstocks for HVO, as well as some waste oils in the form of singlecounting category 3 tallow,” Midgley said.

Consumption of waste oils should significantly increase to make up 43.1% of biofuel feedstocks in 2030, compared to 29.8% in 2018, while rapeseed oil consumption would remain the roughly same (41.1%) (see Figure 4, above).

“We are in a transition period, moving from RED to RED II and we are waiting for member states to transpose their legislation. We should remember that country level mandates are not yet fixed.

The countries can reduce their crop limits below 7% and make a corresponding reduction in the overall mandate,” said Midgley. “If we see countries reducing their crop limits, then we can see a larger contribution of single-counting crop biofuels, such as category 3 tallow and PFAD. I think this is going to have implications on the pricing of these feedstocks relative to vegetable oils, particularly palm oil.” ● Gabriel Day is OFI’s former assistant editor

www.ofimagazine.com

03/02/2020 09:50

CHINA

A 21st century Silk Road China is the world’s leading market for vegetable oil, with soyabean oil accounting for more than 40% of edible oil consumption in the country, according to the US Department of Agriculture.

Other important oils consumed are rapeseed oil (some 24% of total consumption), palm oil (18%) and peanut oil (9%).

Edible oil production mirrors the consumption pattern, with soyabean oil accounting for 55% of total production in volume terms, rapeseed oil 29%, and peanut oil 11%, according to GEB-Institut de l’Elevage.

Food security has always been a major concern for the Chinese government and, until recently, this has meant trying to achieve and maintain national selfsufficiency, with the task falling almost entirely on the shoulders of China’s smallscale farmers, says the NGO, Grain.

Now, the government is shifting its approach by replacing smallholder farms with large commercial agribusiness operations and investing in farm production and infrastructure abroad.

Over the past 10 years, Chinese companies have invested US$43bn in agricultural production outside China, a www.ofimagazine.com

China belt and road NEW.indd 2

China’s massive Belt and Road Initiative will develop supply routes in Asia and Africa, enable exports and imports across Central Asia to and from Europe, and includes new ports, railways and roads. But this new Silk Road also faces geopolitical risks and has been accused of being a ‘debt trap’ Gabriel Day February 2019 Grain report says.

They have also bought up operations in global production chains such as pork in the USA and soyabeans in Brazil, and taken a stake in the global seed industry by taking on majority ownership of Swissbased seed giant Syngenta.

In 2013, Chinese president Xi Jinping launched the world’s largest infrastructure project – the One Belt, One Road (OBOR) initiative.

Also known as the Belt and Road Initiative (BRI), the project focuses on connectivity and cooperation between Eurasian countries to boost trade and stimulate economic growth while posing a possible solution to satisfy the country’s vegetable oil demand. The BRI is expected to boost China’s investment in agribusiness as well as infrastructure spending to spur greater agricultural trade, says Grain.

Belt and Road initiative

The BRI envisions a land-based “belt” connecting China with Europe and a seabased “road” crossing the Indian Ocean to Africa and up through the Mediterranean, reaching over the Atlantic as far as Oceania and Latin America.

It provides a framework for Chinese investment to enhance existing infrastructure as well as build new production sites and trade routes to better connect the country with the rest of the world.

As of February 2019, the initiative has involved 90 countries and is expected to cost more than US$1 trillion, Grain says.

Much of the funding comes from Chinese sources such as the China Development Bank and involves a combination of loans, bonds and equity investments. China u also set up a special Silk Road Fund to OFI – FEBRUARY 2020

27

30/01/2020 08:40

u

CHINA u finance BRI projects. International finance institutions such as World Bank and the Asia Infrastructure Investment Bank (AIIB), as well as private banks like HSBC, have also expressed support or established their own BRI focused funds.

The BRI could reconfigure large parts of Asia, Africa, Europe and the seas between, into production and distribution areas with warehouses, logistics terminals and export/import zones, providing efficiency in feeding the population, according to Grain.

However, it is also likely to further concentrate power in the global food system and undermine national food security, local food producers and rural communities.

“BRI-associated projects have already undermined thousands of people and more are likely to be adversely affected to make way for the BRI’s planned roads, railways, sea ports, dry ports and airports,” the NGO says.

China-Pakistan corridor

A major part of the BRI is the ChinaPakistan Economic Corridor (CPEC), which is a collection of infrastructure projects that are currently under construction throughout Pakistan.

The project, costing US$62bn as of 2017, aims to connect southwest China to the port of Gwadar in Pakistan’s Balochistan province. Along the way, it will open up new mines, mills and communication systems, but agriculture is central to the agenda, Grain writes.

The total value of agricultural trade between China and Pakistan reached US$652M in 2013 and the CPEC was signed in April 2015 to increase this, Grain says.

“Pakistan is well endowed in natural resources and could produce a wide range of crops for the Chinese market,” the Express Tribune wrote in April. “Chinese stakeholders will, therefore, be looking to link up with medium- and large-scale farms to utilise these opportunities.”

Grain says that the long-term plan is to replace traditional Pakistani farming with high-tech farming and marketing systems and a large-scale agroindustrial complex.

Towards this end, CPEC outlines 10 key areas for collaboration and nine special economic zones.

Projects include construction of an 800,000 tonnes/year fertiliser plant; a meat processing plant in Sukkur, as well as large-scale vegetable and grain processing plants in Asadabad, Islamabad, Lahore and Gwadar, where the port will also be upgraded to improve import/export logistics.

28 OFI – FEBRUARY 2020

China belt and road NEW.indd 3

‘Chinese interests are eyeing Kazakhstan as a new source of wheat, sugar, meat and vegetable oil’ Pakistan currently has two main international deep-sea ports: Karachi Port and Port Qasim, according to the Gwadar Port Authority (GPA).

Port Qasim – located in Karachi – is currently where the bulk of edible oil cargo arrives as it has more advanced liquid cargo handling facilities, while a very limited portion is handled by Karachi Port.

However, edible oil importers have stated that there is a higher transportation cost from Port Qasim terminals to industrial units throughout the country.

In addition, GPA says the possible speed of development at Port Qasim is hampered by its up-stream location, more than 40km from the open sea, resulting in long turnaround times for visiting ships.

Meanwhile, Karachi Port has significant physical limitations and will not be able to grow at the same speed as national growth demands over the coming decades, the GPA says.

The upgrade of Gwadar Port therefore offers a solution to handle more imports, while providing China with the most economic route for importing goods from the Middle East and Africa.

Gwadar Port

“The real pivot in this game is the port of Gwadar,” writes Abdus Sattar Ghazali, chief editor of the Journal of America, in Countercurrents.org.

“Located near the Strait of Hormuz, Gwadar will save 12,900km of sea route which Middle Eastern energy supplies take to reach China’s eastern board through the Strait of Malacca. This new route will serve a dual purpose for China – a shorter land route and a strategic advantage in the form of reduced dependence upon India and the USA. It will also help China in the development of some of its least developed regions in the west.”

Under CPEC, the port will initially be expanded and upgraded to allow larger ships with up to 70,000dwt to dock, up from the current 20,000 tonnes, the Express Tribune writes.

The China Overseas Port Holding

Company (COPHC) will expand Gwadar Port with the construction of nine new multipurpose berths on 3.2km of seafront to the east of existing multipurpose berths, along with other facilities, including a planned grain terminal.

“With the completion of the first phase of the port, Gwadar – a small fishing village – has become one of the most important towns in the region for importing and exporting logistics and is poised to become one of the most important and modern cities of the Middle East, West Asia and South Asia,” the GPA says.

The port is located near a free trade area in Gwadar which is being modelled along the lines of the special economic zones of China, the Express Tribune says.

Businesses located in the zone, to be completed in three phases, will be exempt from customs authorities as well as many provincial and federal taxes.

“By 2025, it is envisaged that manufacturing and processing industries will be developed, while further expansion of the zone is intended to be complete by 2023,” the Express Tribune writes.

The entire traffic of the port will flow through the US$168M Gwadar East-Bay Expressway, which will link the port to Pakistan’s national highways. Construction of the expressway under CPEC is due to be completed in October.

However, other infrastructure plans have been delayed, with Pakistan setting up the CPEC Authority in October last year to speed up delayed projects, Ghazali writes.

These include a 1,100km motorway to be built between the cities of Karachi and Lahore, and the overhaul of the Karakoram Highway from Hasan Abdal, northern Pakistan, to the Chinese border.

“Pakistan’s railway network will also be extended to eventually connect to China’s Southern Xinjiang Railway in Kashgar. The corridor will include a 2,000km transport link between Kashgar in northwestern China to Pakistan’s Gwadar Port on the Arabian Sea via roads, railways and pipelines.”

Kashmir controversy

One of the reasons behind the delays is that CPEC passes through the Pakistanoccupied Kashmir region, which is claimed

by India, Forbes magazine writes.

In September 2019, India called on China and Pakistan to suspend CPEC activities in Kashmir.

“So far, CPEC activity in Pakistanoccupied Kashmir has been limited to reconstruction and maintenance of the Karakoram Highway,” Ted Bauman, senior research analyst and economist of Banyan www.ofimagazine.com

30/01/2020 08:40

CHINA Hill Publishing told the magazine.

“But India has objected strenuously to new construction projects, including railways and pipelines. The problem for China is that the only other feasible route for road, rail and pipeline connections to Pakistan and its ports would be through Afghanistan’s Badakhshan province.

Afghanistan’s political instability and diplomatic alliance with India and the USA currently makes that impossible.”

CPEC also cuts through the disputed territory of Gilgit Baltistan, administered

by Pakistan.

Other projects

Further north, Kazakhstan is regarded as “ground zero” for China’s ambitions in Central Asia, Grain writes.

A large dry port, 49% owned by Chinese companies, has been built in the town of Korghos on the border between China and Kazakhstan to facilitate food trade, with a railroad and highway being constructed across the country to connect China with Europe.

A trade corridor will also be built which will link Kazakhstan to southeast Asia through the Chinese port of Lianyungang in Jiangsu pronvice.

BRI’s Silk Road fund has earmarked US$2bn for Kazakhstan, much of it connected to agriculture, with the country breaking into China’s soyabean market, Grain says.

“Chinese interests are eyeing Kazakhstan as a new source of wheat, sugar, meat and vegetable oil.”

China’s largest food processor and manufacturer, COFCO, is one of the players moving into Kazakhstan and other companies have formed partnerships venturing into fruit and vegetable production, sugar processing, meat packing, oil processing and flour and noodle manufacturing.

Aiju Grain and Oil has also started producing and exporting vegetable oil using farms that the company “either owns or invests in” in the country, Grain writes.

East Africa plans stall

Meanwhile, in East Africa, China is aiming to build ports and sea infrastructure to upgrade the route from South Asia to Kenya and Tanzania and then up to the Mediterranean via Djibouti.

Tanzania is key to China’s maritime BRI plans and in 2013, China Merchant Holdings signed an agreement to build a massive port in Bagamoya – 72km north of Dar es Salaam – along with railways and a special economic zone to make Tanzania a regional trade and transport centre,

according to a Center for International similar concerns.”

Maritime Security (CIMSEC) report.

Grain says land is another controversial “If completed, the Bagamoyo port would issue as BRI projects require large swathes be considerably larger than the Kenyan of land on which to develop infrastructure port of Mombasa, the largest African port and industrial zones. on the Indian Ocean and a key economic It cites a railway project in Laos resulting driver for east and central Africa.” in the displacement of more than 4,400 However, Tanzania suspended the farming families. There are also concerns project indefinitely in June and told about the environmental and social impact China’s largest port operator in October to of further industrialisation and intensive accept its conditions or leave the project. agriculture.

These include a 33-year lease, instead of China, on the other hand, believes a 99-year one; no special tax-free status, that the BRI is a win-win initiative that no special rates for water and electricity will bring much needed jobs, capital, and no ability to open other businesses infrastructure and technology to local without government approval. economies.

In addition to ports in Tanzania, Kenya Whether this new 21st century Silk and Djibouti, China Merchants is also a Road is good for the world will depend key investor in the West African ports of on the individual farmers, companies and Lomé, Togo; and Lagos, Nigeria. countries involved.

The USA is concerned that Chinese port “For companies with an international ownership or operations could potentially outlook that are involved in exporting, allow the country to extract intelligence, importing or implementing new or block it from accessing territory and manufacturing or agricultural projects services, or docking military vessels, the overseas, a careful examination of the CIMSEC report says. opportunities and risk of the BRI for “There are also several instances their business is certainly worthwhile,” where Chinese naval deployments says Grace Ho at Hong Kong’s Olympic and strengthened military agreements Consultants.  quickly followed the completion of port Gabriel Day is OFI's former assistant editor construction projects, including Djibouti and Namibia (Walvis Bay) in Africa, as well as Pakistan (Gwadar), Sri Lanka (Hambantota) No 12-2, Jalan Merbah 4, Bandar Puchong Jaya, and Greece (Piraeus).”

47170 Puchong, Selangor Darul Ehsan, Malaysia.

Debt trap?

China’s BRI has been criticised for being a “debt trap” as projects can be financed by loans to recipient countries.

“The government of Sri Lanka, for instance, agreed to allow China to build a new port [at Hambantota] but when it couldn’t repay the loan, the Chinese took over the port,” Grain writes.

In August 2018, Malaysia also withdrew from a US$22bn BRI project fearing it would be unable to pay for it.

“Indonesia’s president Joko Widodo is also holding off on committing to BRI due to

Electrical Heat Tracing (EHT) products :

Self-Regulaing Fiber Wrap

components : Self-Regulaing Monolithic

Variable Power Limiing

Electrical & Instruments (E&I) Installation Termination Loop Check Upgrading Calibration Modification Maintenance Commissioning

www.ofimagazine.com

OFI – FEBRUARY 2020 smi electric automation_quarter page.indd 1

China belt and road NEW.indd 4

Installation & Construction Post Installation Services Maintenance Detailed Engineering On-Site Services Commissioning Control Quality Cont Procurement

29

28/01/2020 11:41

30/01/2020 08:40

OLIVE OIL Argentina is the largest olive oil producer and exporter in the Americas, and is developing its industry by embracing both tradition and modern technology

Tradition and tech mother plant for olive trees in this region.

The region gives its name to Argentina’s internationally renowned olive variety.

Increased production

Although the 2018/19 harvest was an offyear in Argentina, which saw the country produce just 20,000 tonnes of olive oil, production has been trending upward for the past decade (see Table 1, below), says Olive Oil Times.

Argentine olive oil production reached an average of 25,000 tonnes in the fiveyear period between 2012/13–2016/17.

The 2017/18 crop year reached record highs of 43,600 tonnes, the majority of which was extra virgin olive oil (EVOO).

Exports also hit record levels of 36,500 tonnes that year, a 116% year-on-year increase, making Argentina the world’s sixth largest olive oil exporter.

“In 2017/18, we had an excellent

Table 1: Argentina olive oil production (‘000 tonnes) 30 OFI – FEBRUARY 2020

Argentina2.indd 2

Source: International Olive Council

Argentina is the leading producer and exporter of olive oil and table olives in the Americas.

It has an estimated olive acreage of 90,000ha, most of which is irrigated, according to a May 2018 newsletter report, ‘Olive Growing in Argentina’, by the International Olive Council (IOC).

Approximately 50% of this area is used to grow olive varieties for olive oil, 30% is used to produce table olives, and 20% for dual purpose olives.

The largest olive growing areas are found in the provinces of La Rioja, with 27.8% of the total olive growing area, followed by Mendoza (22.9%), Catamarca (20.8%), San Juan (20.2%), Cordoba (5%), Buenos Aires (2.8%) and Rio Negro (0.6%).

The two main industrial activities of Argentine olive production – table olive processing and olive oil extraction – are very important for the development and growth of the regional economy, the IOC report says.

They both have strong roots in the country, dating back to the Hispanic period in Argentina, endowing the products from each region with unique characteristics and specific attributes.

Argentina is home to various olive varieties including the Arauco, Arbequina, Barnea, Changlot, Coratina, Empeltre, Farga, Frantoio, Hojiblanca and Manzanilla.

The 400-year-old ‘Cuatricentenario’ olive tree is found in the region of Arauco, in La Rioja province, and is considered to be the

situation,” says Frankie Gobbee, the cofounder and director of the Argentina Olive Group (AOG), the largest olive oil producer in South America, Gobbee told Olive Oil Times that there was a perfect storm that allowed Argentine producers to enter new export markets and sell their oil for prices that were higher than normal.

“We produced a very high volume of olive oil in Argentina and received good prices as well. The Euro was also very high and all the major production countries [such as Spain and Italy] produced lower volumes. These conditions gave us a very excellent price for our oil and good opportunities to supply a lot of new international accounts.”

Olive oil consumption in Argentina has increased in recent crop years, settling at some 40,000 tonnes, the IOC report says.

Exports have increased from 4,900 tonnes in 1992-97 to 18,600 tonnes in 2012-17. Argentina exports olive oil to more than 27 countries. The American continents are the main destination, accounting for 63% of exports, 41% of which goes to the USA. The second largest destination is the EU with 37% of exports, while 1% goes to the rest of the world.

Gobbee expects production and exports to continue their upward trend.

According to statistics from the International Trade Center, the value of virgin and extra virgin exports from Argentina has climbed steadily since 2014, Olive Oil Times writes.

This growth has been spurred by increased investment, both in olive tree plantations as well as supporting www.ofimagazine.com

27/01/2020 14:21

OLIVE OIL at INTA. “What we do is, first, to study the behavior of the temperature in this valley… We defined some places where you can grow olives and places where you cannot grow the olives.”

The study found that the area of land suitable for olive growing in the province exceeds the number of hectares currently planted. Moving olive trees further up the foothills seems to be the answer.

“Here, we are at 1,100m,” Daniel Minchiotti of Finca Vista Larga in La Rioja, told Olive Oil Times. “We have very good conditions, mainly the alternation of the thermal amplitude. This effect makes the crop and the physiological processes of the plant very efficient. The plant can breathe well and oxygenate and not perspire so much at night.”

echnology infrastructure.

“Earlier in 2019, the agricultural company Solfut announced that it would begin building the largest olive oil production and storage plant in Latin America,” Olive Oil Times reports. “Once completed, the plant will boast modern equipment and a storage capacity of 4,000 tonnes, much of which will be exported to Brazil.”

More olive tree cultivation is also occurring, with AOG planting more than 300,000 Arbequina trees, which will start to produce olives for olive oil in three years.

Gobbee says that these olives from La Rioja will be the definition of extra virgin as the trees were planted right on the outskirts of Argentina’s high desert, where nothing else had previously been farmed.

“Before we planted here, this was a desert, so this is really extra virgin,” Gobbee told Olive Oil Times. “The land was virgin and we planted this area with super high density, new genetic plants with good production.”

Olive growers in San Juan province are also beginning to apply scientific methods to determine where olives grow best.

A recent study carried out by the National Agricultural Technology Institute (INTA) found that 60% of the olive groves in San Juan are not in optimal places after a series of government tax incentives in the 1980s and 1990s led to a dramatic expansion of olive plantations in the province, Olive Oil Times writes.

“The olives here are growing in a continental climate,” says Facundo Vita, who oversees activities related to olives www.ofimagazine.com

Argentina2.indd 3

Adopting new technology

As well as expanding plantings, Francisco Corredoira, president of the Catamarqueña Olive Association (Asolcat), also attributes increased output to technological advancements and better growing techniques.

“Today, olives destined for the production of oil have to be machineharvested, in order to be profitable,” he told Olive Oil Times.

Across all provinces in Argentina, modern production systems co-exist with traditional systems, according to the IOC report. Low-density intensive domains have plantation frameworks of 200-800 trees/ha of varieties that are mainly used for the production of EVOO. Irrigation is localised and pruning and harvesting are mechanised. Average expected output is 10 tonnes/ha of olives.

The super-intensive model, in orchards of more than 800 trees/ha, is applied in areas where the agro-climatic conditions restrict plant development. Lowerbearing and less robust cultivars, such as Arbequina or Arbosana, require shorter distances between rows and a rapid entry into production. In this model, rows are set at 2-5m between plants.

In contrast, plantations using the traditional model have wide patterns with densities of 69 to 156 trees/ha. They are mostly made up of old Arauco cultivar olive trees, which are mainly used to produce table olives.

Other characteristics of this system are low use of technology, surface irrigation and manual harvests. In these plantations, the expected average output is estimated at 5-6 tonnes/ha of olives.

Improving quality

Producing a high quality olive oil is something which everyone in the sector

agrees will help make Argentina’s EVVO stand out.

To this end, AOG has been taking steps on the agricultural front, such as removing the use of pesticides from the growing process, Olive Oil Times writes.

“With more certification and increased quality, we think that the sector can continue to grow quickly,” Gobbee says.

Improving quality will also allow Argentine producers to add more value to their bulk EVVO exports. Through bulk oil sales to private labellers, Gobbee believes the sector can compete with Mediterranean producers in the long term.

“Last year, Argentina was the third largest exporter of bulk oil to the United States,” Gobbee told Olive Oil Times. “What we are doing right now is giving more value to bulk olive oil exports, since we see that in the USA, private labeling is growing every year.”

AOG has also been focusing on customising blends for specific retailers.

Gobbee says that by doing this, retailers get consistent flavours that match what their customers demand and provide an option for Northern Hemisphere producers to refresh their olive oil stocks in the offseason.

“In 2017, many buyers from Italy and Spain, including large brands such as Borges and Deoleo, came to see New World olive oil and we’re working on making contracts with them,” Gobbee says.

He believes the challenge for Argentine producers will be to continue producing olive oil more quickly than they currently are. This will mean new investments in milling technology as well as the planting of new olive groves.

“Production companies here are very worried about trying to cover demand volume because it is growing every year,” he says. “But they are getting more investment and planting more.”

He predicts that in the next few years, Argentina will be producing between 42,000-45,000 tonnes of olive oil. “We hope in 2020 or 2021, we can also have a reserve of oil. People here are investing more and more in tanks because they can see that the crops are growing in an onoff cycle.”

Alejandro Ovando, the director of IES Consultores, which has studied the olive oil industry in Argentina, is also optimistic about the future.

“Olive oil produced in Argentina can compete in quality and price worldwide,” he says. “There is no chance that [external factors such as better harvests in 2019 in Mediterranean producing countries] can stop the growth of the sector in the international market.” ● OFI – FEBRUARY 2020

31

27/01/2020 14:21

STATISTICS STATISTICAL NEWS Global soyabean production

Soyabean crops in top producing countries (million tonnes) Graph: UFOP

Global soyabean supply in 2019/20 is expected to fall 6% to 338M tonnes compared to the previous three years, according to Agrarmarkt Informations-Gesellschaft GmbH (AMI). The US soyabean harvest amounted to 96.8M tonnes, down 24M tonnes from the previous year and its smallest crop in six years due to excessive wet conditions from sowing to harvest time.

Brazil, with an expected bumper crop of 123M tonnes, is set to become the largest soyabean producer in 2019/20 due to increases in area and yield. In contrast, a fall in planted area due to drought is expected to result in a 2.5M tonne production decline in world number three soya producer Argentina, to total 53M tonnes. However, AMI expects the harvest estimates for South America to be adjusted because harvesting will not commence until the start of March.

The USA, Brazil and Argentina account for around 81% of global soybean production.

Biofuel share of arable land

Cultivation area for selected biofuel crops, 2018

Graph: UFOP

Although the share of land used for biofuel production increased by 1 percentage point in 2018, it remains very low. Crop plants are grown on more than 1.56bn hectares worldwide including oilseeds, grains, protein, sugar and fibre plants, fruits, vegetables and nuts. Most of this produce is used as food, with around 5% going into biofuels production.

FAO vegetable oil price index

FAO global vegetable oil price index

Graph: UFOP

Prices of selected oils (US$/tonne) Jul 19

Aug 19

Sept 19

Oct 19

Nov 19

Dec 19

Soyabean

722.2

745.5

746.8

753.8

748.5

826.1

Crude palm

531.8

564.6

578.2

615.1

692.2

772.5

Palm olein

526.1

548.3

541.4

573.1

648.8

720.0

Coconut

688.8

735.4

741.0

736.5

838.4

1,038.4

Rapeseed

828.2

863.3

881.7

888.4

872.4

918.8

Sunflower

738.7

762.9

751.2

720.3

758.9

803.9

Palm kernel

580.2

650.0

637.3

624.4

775.6

977.1

Average

659.0

696.0

697.0

702.0

762.0

865.0

Index

156.0

165.0

165.0

166.0

181.0

205.0

32 OFI – FEBRUARY 2020

Stats.indd 1

Mintec

The vegetable oil price index of the Food and Agriculture Organization of the United Nations (FAO) rose considerably at the end of 2019, increasing from 126 points in June 2019 to 165 points at the end of the year.

The surge was mainly the result of firm palm oil prices, driven by buoyant demand – especially from the biodiesel sector – combined with shrinking supply.

Asking prices for soyabean, sunflower and rapeseed oils also picked up significantly due to smaller processing volumes at the end of 2019, brisk world demand and concerns over global supply shortages.

Overall, the FAO vegetable oil price index for 2019 averaged 135.2 points, down 8.9 points from 2018 and the lowest annual average since 2006.

Mintec provides independent insight and data to help companies make informed commercial decisions.

Tel: +44 (0)1628 851313 E-mail: sales@mintecglobal.com Web: www.mintecglobal.com The Union for the Promotion of Oil and Protein Plants represents the interests of companies and associations involved in the production, processing and marketing of oil and protein plants in Germany

www.ofimagazine.com

03/02/2020 09:53

15th ANNUAL

23rd-25th March 2020 Passenger Terminal Amsterdam Amsterdam, NL www.worldbiomarkets.com

grow together

COMMERCIALISING THE BIO ECONOMY FROM LAND TO BRAND 600+ ATTENDEES

1000+ MEETINGS

100+ SPEAKERS

Plastics

Apparel

Coatings & resins

Homecare & domestic products

Textiles

Packaging

Biodesign & future materials

Cosmetics & personal care

50+

PARTNERS

“Great opportunity to understand the complexity of the bio economy markets and to interact face to face with key players in the field. Highly recommended!”

Ivana Esposito, Process Development Engineer, Shell Gold sponsors

Silver sponsors

Bronze sponsors

Organised by