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OILS & FATS INTERNATIONAL FEBRUARY 2021 ▪ VOL 37 NO 2

SUNFLOWER OIL Challenges ahead

EU BIODIESEL Towards HVO

Cover Feb.indd 1

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CONTENTS

IN THIS ISSUE – FEBRUARY 2021 Antioxidants & Sauces

FEATURES

NEWS & EVENTS

18

Photo: Adobe Stock

Photo: Adobe Stock

EU Biodiesel

26

Towards HVO EU biodiesel production of hydrotreated vegetable oil (HVO) is growing at the expense of conventional fatty acid methyl ester

A natural pairing The antioxidants sector is poised to grow alongside the market for sauces, dressings and marinades, as it is used to preserve the shelf life of these products

Comment

2 News

4

Marine Biofuels

Sunflower Oil

Developments of new hybrids and improvements in crop cultivation and management are needed to meet future demand for sunflower oil

Photo: Adobe Stock

Photo: Adobe Stock

Challenges ahead

USA blocks imports of Sime Darby palm oil

Biofuel News

10

24

Brexit is done

29

Fuelling the future Marine biofuels are in their infancy but could comprise 5-10% of the global maritime fuel mix by 2030 due to regulatory and market drivers

Malaysia launches WTO

complaint against EU Renewable News

12

BASF sells surfactant, sterol and ester site

Transport News

14

Cargill acquires stake in Port Qasim terminal

Biotech News

16

China approves GM corn as feed demand grows

Diary of Events

17

International events listing

Statistics

32

www.ofimagazine.com

Contents Feb.indd 1

World statistical data

OFI – FEBRUARY 2021

1

03/02/2021 16:23:02


EDITOR'S COMMENT

OILS & FATS INTERNATIONAL

VOL 37 NO 2 FEBRUARY 2021

Brexit is done A last-minute Brexit agreement was finally reached on 24 December, just days before the UK was due to leave the EU on the 31st.

EDITORIAL: Editor: Serena Lim serenalim@quartzltd.com +44 (0)1737 855066 Assistant Editor: Gill Langham gilllangham@quartzltd.com +44 (0)1737 855157 SALES: Sales Manager: Mark Winthrop-Wallace markww@quartzltd.com +44 (0)1737 855114 Sales Consultant: Anita Revis anitarevis@quartzltd.com +44 (0)1737 855068

The new Trade and Cooperation Agreement (TCA) has come as a huge relief to both sides. While oilseeds and meals have zero tariffs under World Trade Organization (WTO) terms, the deal ensures oils can also trade free from tariffs and quotas, which would have applied if the UK had defaulted to WTO rules. That is not to say that the transition has been plain sailing. The UK Seed Crushers and Oil Processors Association says that while the deal has been very welcome, it was agreed extremely late, leading to administration burdens at borders and delays. All trade between the UK and the EU will now be on ‘third country’ terms needing full customs declarations, which requires a greater burden of proof, more paperwork and, no doubt, extra costs on both sides.

PRODUCTION: Production Editor: Carol Baird carolbaird@quartzltd.com CORPORATE: Managing Director: Tony Crinion tonycrinion@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 © 2021, 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

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Comment Feb.indd 1

The agreement’s ‘Rules of Origin’ also define which goods can have zero tariffs. In a nutshell, tariff-free rules only apply if an oil has been produced according to the specific rules laid down for that oil in the TCA. For most vegetable oils, this requires sufficient processing to change the tariff sub-heading of the oil, for example, by refining. There are exceptions – olive oils, for example, must be from olives ‘wholly obtained’ (only grown) in the EU (with a 15% tolerance). Of course, in the longer term, the UK is free to make its own trade deals and set its own rules. Malaysia, for example, hopes the UK will increase its palm oil imports from the country. The Malaysian Palm Oil Council wrote last year that the UK imported around 500,000 tonnes of palm oil in 2019, of which Malaysian’s share was 13%, the Indonesian share 23%, and the EU share 31%. “Apart from mere trade volumes, Brexit might allow for an important reset of the debate on palm oil and the policies affecting it in the UK,” the MPOC says, referring to the EU’s phasing out of renewable energy benefits for palm oil by 2030, which it likens to a de facto ban, as well as ‘palm oil-free’ labelling on products that it believes are discriminatory. The UK has also launched a consultation on the use of gene editing (GE) to modify food crops and livestock (see Biotech News, p16). Environment Secretary George Eustice says the UK no longer has to “slavishly follow” European law, which he describes as “notoriously restrictive and politicised”. GE could pave the way for crops more resistant to extreme weather and disease, something of note for the UK rapeseed crop, which has halved due to the EU’s ban on neonicotinoid insecticides – linked to plummeting bee populations. Both the UK and the EU are just at the very beginning of their new relationship and it will be interesting to watch how this develops. Will it be an amicable divorce or an increasing source of divide? Only time will tell. Serena Lim serenalim@quartzltd.com www.ofimagazine.com

01/02/2021 15:26:47


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NEWS IN BRIEF UKRAINE: Leading sunflower oil producer Kernel said its 2021 outlook was “uninspiring” despite a strong first quarter, AgriCensus reported on 27 November. Kernel’s EBITDA for the first quarter of the financial year, which started in July, had tripled compared with the same three-month period in 2019, reaching US$290M. Its oilseed unit had enjoyed stronger crushing margins driven by growing sunflower oil prices and a record 2019 harvest. Kernel said it planned to process 3.5M tonnes of sunflower seeds this year but expected a tight market situation by the end of the current marketing year due to drought ruining the Black Sea sunflower seed crop.

USA blocks imports of Sime Darby palm oil The US Customs and Border Protection (CBP) office has issued a detention order on palm oil produced by Malaysia’s Sime Darby Plantation (SDP) Berhad, based on information indicating the use of forced labour. The order, effective 30 December, is the second one focused on Malaysian palm oil. On 30 September, the CBP issued a similar order against Malaysia’s FGV Holdings. “The issuance of a Withhold Release Order against SDP palm oil is based on information that reasonably indicates the presence of all 11 of the International Labour Organization’s forced labour indicators in Sime Darby Plantation’s production process,” the CBP said on 30 December. “This order will require the detention at all US ports of entry of raw palm oil and processed products containing palm oil produced by SDP.” Ana Hinojosa, executive director of the CBP's trade remedy law enforcement directorate, told

CNN that its latest months-long investigation had found evidence of debt bondage, poor living and work conditions, lack of sanitation, manipulated wages and excessive overtime at SDP. However, the plantation giant said the CBP’s news release did not provide sufficient information for it to meaningfully address the allegations. “Nevertheless, we look forward to receiving pertinent information and working with CBP in order to address their concerns and quickly resolve this matter,” the company said in a press release on 31 December. SDP is the world’s largest palm oil plantation company by planted area, according to its website, producing around 2.496M tonnes/year or 4% of the world’s crude palm oil (CPO) output. The USA imported around US$410M of CPO from Malaysia in fiscal year 2020, representing around 31% of total US CPO imports, not including products that include palm oil, CNN said.

Global speciality oils and fats supplier Bunge Loders Croklaan (BLC) announced on 20 January that it had introduced an infant lipid solution that mimics the fat composition of Chinese mothers’ breast milk. Betapol Select is BLC’s first product line designed to mimic the balance of OPL (oleic-palmitic-linoleic) and OPO (1,3-dioleyl-2-palmitoylglycerol) structured lipids present in Chinese mothers' milk fat. “Research in infant nutrition made us understand that macronutrients in human breast milk vary – not only with

Photo: Adobe Stock

BLC infant formula ingredient mimics Chinese milk fat

BLC says there are regional differences in human breast milk

lactation stages, diurnally, and within feeds, but also regionally. These regional differences

are influenced by the mother’s origin and diet." In Western mothers’ milk fat,

OPO was the most prevalent triglyceride, followed by OPL. However, in Chinese mothers’ milk, it was the opposite – the fat composition contained a higher level of OPL followed by OPO, BLC said. To replicate this balance, Betapol Select provided a high level of SN-2 palmitate with the right balance of OPL and OPO triglycerides. BLC said the presence of palmitic acid in the centre position (SN-2 palmitate) had been shown to improve energy intake, reduce constipation and increase bone mineral density and healthy gut bacteria.

Russia restricts oilseed exports to reduce food prices Russia will restrict exports of sunflower seed, rapeseed, soyabeans, wheat, rye and corn in the first half of this year until June. A US Department of Agriculture (USDA) Global Agricultural Information Network (GAIN) report on 31 December said the new measures, effective from 10 January to 30 June, were part of moves to reduce food prices. An export tariff of 30% but not less than €165/tonne on sunflower seeds and rape4 OFI – FEBRUARY 2021

General News Feb.indd 2

seeds would be imposed. This was higher than the 6.5% but not less than €9.75/ tonne export tariff on sunflower seeds. For rapeseed, the former rate was also 6.5% but no less than €11.4/tonne. Russia has also introduced an export duty on soyabean shipments of 30%, but not less than €165/tonne from 1 February to 30 June to all countries except the Eurasian Economic Union member states, according to a government decree published

on the official portal of legal information. The Russian Ministry of Economic Development said the duty was introduced to prevent an increase in prices for soyabean oil and meal, UkrAgroConsult reported on 6 January. As of 16 December, the cost of soyabeans in Russia was 35,655 rubles (US$480)/tonne, 65% higher compared with their price on 19 December 2019, according to the Russian Agriculture Ministry. www.ofimagazine.com

04/02/2021 12:12:46


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NEWS

ADM reports record crush and results Global agribusiness giant Archer Daniels Midland (ADM) reported strong profits across its three major business units including its oilseed division in 2020, according to a World Grain report on 27 January. Operating profit in the Ag Services and Oilseeds Segment had increased 9% in 2020 to US$2.11bn, while profit in the fourth quarter had risen 13% to US$834M, the report said. Within the segment, Ag Services operating profit had surged 65% year-over-year to US$828M, while crushing profit had fallen 20% to US$466M and refined products and other had decreased 25% to US$439M, the report said. “(The Ag Services and Oilseeds team) achieved multiple records, including an alltime-high in global crush volumes,” ADM’s

chief financial officer Ray Young was quoted by World Grain as saying. “In addition, we’re proud of the team that brought our reserve export facility back online safely and ahead of schedule despite dealing with multiple severe weather events this year. Looking ahead, we expect the first quarter of 2021 results for Ag Services and Oilseeds to be significantly higher than the prior year first quarter, driven by extremely strong North American export demand and continued healthy crush margins.” During a conference call on 26 January, ADM president and CEO Juan Luciano was quoted by World Grain as saying that the company expected 2021 to be a “very, very strong year” for the Ag Services

and Oilseeds segment, which delivered outstanding results in 2020, crossing the US$2bn profit mark. "With continued strong global demand for grains and oilseeds as well as meal and oils, we are confident in another outstanding performance in 2021." The company expected continued strong soyabean crush, according to Luciano, who also said that a new renewable green diesel capacity was also having an impact on soyabean oil demand and margins. Overall, the company had delivered a 28% increase in year-over-year income in 2020, World Grain reported, with net income in the year ended 31 December 2020 totalling US$1.77bn, up from US$1.38bn in 2019.

The US Department of Agriculture (USDA) announced a final rule regulating the production of hemp in the USA on 15 January – more than a year after the publication of draft regulations. Modifications to the final rule – which takes effect on 22 March – were based on public comments following the publication of the interim final rule (IFR) published in October 2019 and lessons learned during the 2020 growing season, according to USDA. Key provisions include licensing requirements; record-keeping requirements for maintaining information about the land where hemp is produced;

Glencore rebrand continues in May Glencore Agriculture’s operations in Australia, Brazil, Egypt, Kazakhstan, New Zealand, Romania, Russia and Ukraine are scheduled to rebrand in May following the company’s official renaming to Viterra at the end of November 2020. Viterra operates in 37 countries – sourcing, transporting, storing and processing grains, oilseeds, pulses, sugar and cotton. It also operates 25 port terminals. 6 OFI – FEBRUARY 2021

General News Feb.indd 3

Photo: Adobe Stock

Final US hemp regulation to take effect in March

Hemp is used to produce a wide variety of THC-free cannabidiol (CBD) oil products, which do not contain any psychoactive properties

procedures for testing the tetrahydrocannabinol (THC) concentration levels for hemp, to dispose of non-compliant

plants and to handle violations; and compliance provisions. The final rule had received a mixed reaction from industry

stakeholders, according to Cosmetics Design Europe, with many welcoming the relaxed negligence standard (for THC content) while being less positive about the requirement for hemp to be tested at Drug Enforcement Administration (DEA)-certified labs. “Although there are some positive aspects, this rule does not go far enough to protect farmers and support the growth of the hemp industry,” Asa Waldstein, owner of the regulatory consulting company Supplement Advisory Group and American Herbal Products Association (AHPA) Cannabis Committee chair, was quoted as saying.

Malaysian palm oil production to rise Malaysian palm oil production is expected to increase slightly by 200,000 tonnes to 19.6M tonnes in 2021, against 19.4M tonnes a year ago, the Malaysian Palm Oil Trade Fair and Seminar 2021 (POTS Digital 2021) heard on 5 January. Global supply for 2021 was expected to be affected by the La Niña weather pattern, Malaysian Palm Oil Council (MPOC) CEO Datuk Dr Kalyana Sundram said. “Disruptions from persistent

heavy rainfall in Southeast Asia in 2020 may lead to tight global supply this year,” he added. Malaysia’s 2021 crude palm oil (CPO) exports were projected at 4.5M tonnes, with India, the Netherlands, Kenya, Italy and Spain among key markets. “Malaysian CPO exports to India in 2021 are likely to stay strong as the current levy on Indonesian CPO export will give a price advantage to Malaysia,” the Edge Markets quoted Kalyana as saying. This was

despite the re-imposition of the Malaysian CPO export duty from January 2021. Exports to India rose significantly after June 2020, following the implementation of a zero CPO export tax from Malaysia. However, exports to China would be challenged due to lower prices of other oils versus palm, Kalyana said. The total export value of Malaysian palm oil and products for 2020 was expected to surpass US$17.45bn. www.ofimagazine.com

04/02/2021 12:12:54


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NEWS WORLD: The United Nations’ Food and Agriculture Organization (FAO)’s Vegetable Oil Price Index reached its highest level since May 2012 in January. The index illustrates the changes in international prices of the 10 most important vegetable oils in world trade and averaged 138.8 points in January, up 7.7 points (or 5.8%) from December 2020. "The index’s eighth consecutive monthly increase mainly reflected higher palm, soya and sunflowerseed oil prices," the FAO said. "With palm oil production in both Indonesia and Malaysia turning out lower than earlier expected due to excessive rainfall (and, in the case of Malaysia, continued shortages in migrant labour force), international palm oil quotations climbed to eightand-a-half year highs." Soyabean oil prices rose for the eighth month in succession, fuelled by reduced export availabilities and prolonged strikes in Argentina, the FAO said. "As for sunflowerseed oil, continued rising prices stemmed from lingering global supply tightness owing to sharply reduced 2020/21 harvests." The Vegetable Oil Price Index, along with strong gains in cereals and sugar, led to the FAO Food Price Index registering its highest monthly average since July 2014 in January, averaging 113.3 points.

Indonesian and Malaysian campaign to counter critics The world’s biggest palm oil producers – Indonesia and Malaysia – are looking to launch a joint campaign in Europe to counter criticism of their product, according to a 19 January Reuters report. Both countries had sent out a request for proposals to hire an advocacy company to run a campaign in Europe this year via the platform of the Council of Palm Oil Producing Countries (CPOPC), three sources familiar with the matter reportedly said. Europe was the third biggest market for palm oil and increasingly tight regulations there were threatening sales, Reuters said. Palm oil producers had been accused of clearing vast areas of biodiversity-rich rainforests in

Southeast Asia and exploiting migrant workers. This year, the EU was due to discuss legislation on deforestation and sustainable food systems – as part of the European Green Deal – that could restrict palm oil’s use in food and fuel. The CPOPC was looking to launch the campaign to change perceptions of palm oil in the UK and EU countries although plans had not been finalised and were subject to discussions between the producers, Reuters quoted the sources as saying. EU palms oil imports in 2020/21 were forecast to fall to the lowest in a decade at 6.7M tonnes, down 8% from the previous season, according to the United States Department of Agriculture.

BLC launches shea-only CBE ingredient Photo: Bunge Loders Croklaan

IN BRIEF

Shea butter comes from the shea nut, a wild harvest crop in West Africa

Global speciality oils and fats supplier Bunge Loders Croklaan (BLC) said on 3 December that it had launched a shea-only cocoa butter equivalent (CBE) for the chocolate confectionery sector. BLC said its 100% shea-

based ingredient, called Karibon, improved a chocolate product’s nutritional value as it contained more stearic acid and had lower levels of saturated fats compared to cocoa butter and other more commonly-used CBEs.

“Shea has a stronger compatibility with cocoa butter and improved bloom stability, enabling smoother processing,” said BLC’s global confectionery innovation lead Imro‘t Zand. BLC has been a shea processor for more than 50 years in West Africa. In 2019, it opened its first shea butter processing facility in Tema, Ghana, which it said was also the largest shea butter processing plant on the African continent. According to its website, BLC's shea nuts are 100% traceable to country level, with its online Shea Dashboard providing quarterly updates on the traceability of its shea nuts. Source countries include Benin, Burkina Faso, Ghana, Mali and Togo.

SunOpta to focus on plant-based business following sale Organic and plant-based food and drinks firm SunOpta has sold its Tradin Organic ingredients business for US$390M, Global AgInvesting Media said on 26 November. The Canadian company's sale of Tradin to commodities trader Amsterdam Commodities (Acomo) follows the sale of its organic soya and corn business to Pipeline Foods for US$66M two years previously. SunOpta supplied soya, oat and hemp ingredients for the production of plant8 OFI – FEBRUARY 2021

General News Feb.indd 4

based dairy alternatives and the move would allow it to focus on its plant-based food and drinks business, Global AgInvesting Media said. SunOpta said the move would also reduce its exposure to the volatility of commodity trading while strengthening long-term margins and growth rates. SunOpta CEO Joe Ennen said that as part of the deal, the company would continue supplying the organic ingredients it sourced to Acomo.

The agreement also involved the sale of SunOpta’s processing facilities in Amsterdam, the Netherlands, Silistra, Bulgaria, Addis Ababa, Ethiopia and Yirgalem, Ethiopia, with all facilities and employees transferring to Acomo. Moving forward under Acomo, Tradin’s plans included the expansion of its cocoa capabilities and developing processing facilities for plant-based ingredients of meat replacements, Global AgInvesting Media said. www.ofimagazine.com

04/02/2021 12:12:57


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BIOFUEL NEWS ARGENTINA: Biofuel price increases being introduced by the government could aid the recovery of the biodiesel sector in the country, UkrAgroConsult reports. An energy department resolution on 2 January increased biodiesel prices by 59.3% to 77,300 pesos (US$900)/tonne for January, with monthly price rises to 92,558 pesos (US$1,078)/tonne in May. Gabriel Matarazzo, secretary general of petroleum, gas and biofuels union federation FASiPeGyBio, said most biodiesel plants in Buenos Aires and Santa Fe provinces were closed or operating at a minimal level. The new resolution was “a light at the end of the tunnel”, he said. Matarazzo said companies would only be able to start running normally from February and estimated a fully operational sector by April or May. As a result, the 10% biodiesel blending mandate would be reduced to 5% in January, 6.7% in February and 8.4% in March. The sector was still concerned that the peso’s falling value and the rising price of soyabeans, which was paid in US dollars, could neutralise the resolution’s effects, UkrAgroConsult wrote. According to a central bank survey, the peso would lose 41.3% of its value against the US dollar to reach 126.50 by the end of 2021.

Malaysia launches WTO complaint against EU Malaysia has requested World Trade Organization (WTO) dispute consultations with the EU regarding its measures and those by member states France and Lithuania on palm oil-based biofuels, Argus Media reported on 18 January. Malaysia was claiming that these measures were inconsistent with the WTO’s Agreement on Technical Barriers to Trade, the General Agreement on Tariffs and Trade 1994, and the Agreement on Subsidies and Countervailing Measures, a WTO statement said. The EU’s Renewable Energy Directive (RED II) caps the use of high-risk ILUC biofuels at 2019 levels until 2023, and will phase them out by 2030. Its Delegated Regulation 2019/807 (delegated act) defines what high-risk ILUC biofuels are, and only palm oil falls under this category. Malaysian Minister of Plantation Industries and Commodities Mohd Khairuddin Aman Razali said these created an unreasonable trade barrier and

were against the WTO’s principle of free trade. Meanwhile, Germany’s Union for the Promotion of Oil and Protein Plants (UFOP) reported on 26 January that Austria would end the crediting of high risk ILUC biofuels – including palm oil – towards greenhouse gas emission (GHC) targets on 1 July 2021. In France, the accounting of biofuels from palm oil had ended on 1 January 2020. While in Germany, a draft law submitted by the federal government at the end of 2020 proposed ending the crediting of palm oil biofuels towards GHG reduction quotas from 2025, UFOP said. Malaysia’s complaint follows an earlier one by Indonesia, initiated in December 2019, Argus Media said. A request for WTO consultations gives the parties an opportunity to find a satisfactory solution. If consultations have failed after 60 days, the complainant may request adjudication by a WTO panel.

Palm biodiesel exports set to stay low

Photo: Adobe Stock

IN BRIEF

Palm methyl ester (PME) exports by major suppliers Malaysia and Indonesia are set to remain low in the first half of this year due to the wide palm oil-gas oil (POGO) spread, which makes biodiesel expensive to blend with regular diesel, S&P Global Platts reported on 4 January.

The current POGO spread was US$400$500/tonne, well above the typical range of U$$50-$200/tonne, the agency said. Malaysia and Indonesia both reported weak PME exports last year and this was expected to continue in the near term, with the two countries relying on domestic consumption instead. However, Malaysian Plantation Industries and Commodities Ministry secretary general Ravi Muthayah was quoted by The Star on 7 January as saying that the country’s B20 biodiesel blending mandate would be delayed by about six months to mid-June. In Indonesia, plans to roll out B40 palm-based biodiesel could be delayed beyond the end of 2022, the virtual Malaysian Palm Oil Trade Fair and Seminar 2021 (POTS Digital 2021) also heard in January. Malaysian crude palm oil (CPO) prices started 2021 at near 10-year highs, trading at US$950.81/tonne.

New HVO and SAF price assessments launched for Asia Commodity and energy price provider S&P Global Platts announced on 19 January that it had launched new sustainable aviation fuel (SAF) and hydrotreated vegetable oil (HVO) price assessments in Southeast Asia. The company said its new Southeast Asia SAF and Southeast Asia HVO valuations reflected a FOB Singapore price while its UCO (used cooking oil) North Asia price assessment reflected the region’s position as a leading exporter. 10 OFI – FEBRUARY 2021

Biofuel news Feb.indd 2

Meanwhile, Argus also announced new prices in December for SAF and HVO produced from food and feed crops, used cooking oil/palm oil mill effluent and tallow. Argus said the new prices would be published daily in the Argus Biofuels report and the SAF price in the Argus Jet Fuel report. S&P Global Platts head of agriculture and biofuels analytics, Patricia Luis-Manso, said HVO production for road transport across Asia was forecast to exceed 1.8M tonnes by

2025 and 2.6M tonnes by 2030, up from 930,000 tonnes annual production in 2020. “Investment to expand infrastructure such as Neste’s Singapore refinery, as well the launch of two HVO plants in Indonesia, will fuel the region’s production going forward.” S&P Global Platts also launched HVO values for the Americas in December 2020, Northwest European SAF and HVO assessments in August; and SAF values for the US West Coast in September. www.ofimagazine.com

03/02/2021 16:44:05


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RENEWABLE NEWS

BASF sells surfactant, ester and sterol site BASF has agreed to sell its Illinois manufacturing site of vegetable oil-based raw material sterols and natural vitamin E, anionic surfactants and esters. The sale to an affiliate of US private equity firm One Rock Capital Partners was expected to close in the first half of this year, subject to approval from relevant competition authorities, BASF said on 17

IN BRIEF BELGIUM: The Solvay Group announced on 5 January that it had agreed to sell its North American and European amphoteric surfactants business to OpenGate Capital, a US private equity firm. The sale, expected to close by the end of March, includes three main production sites in Illinois, USA; Genthin, Germany; Halifax, UK; and a tolling business in Turkey. The deal also includes tolling and service agreements between Solvay and OpenGate. “This agreement represents another critical step in our strategic plan as we further focus our home and personal care portfolio on speciality formulations and custom solutions,” Solvay said. Amphoteric surfactants are used for both personal care and industrial applications. Solvay’s Mackam range includes some vegetable oil-based amphoteric surfactants including coconut and babassu oils.

December. BASF acquired the Kankakee site and its businesses from Cognis in 2010. “Based on a recent careful market review it was determined that the site is no longer a strategic fit for BASF,” the company said. “With this divestment, we are sharpening the profile of our human nutrition business, with focus on creating superior food ingre-

dients and formulations that meet the challenges and needs of continuously evolving lifestyles,” said Dr Melanie Maas-Brunner, president of BASF’s Nutrition & Health division. BASF said it would continue to produce anionic surfactants for the home care, personal care and industrial formulators industries at its other sites worldwide.

Linseed oil in self-repair glass alternative A team from the Korea Institute of Science and Technology (KIST) has used linseed oil to help the glass alternative – colourless polyimide (CPI) – repair its own cracks, New Atlas reported on 17 December. CPI can be used in folding smartphone screens, as well as for solar panels and artificial skin. The researchers created linseed oil-loaded microcapsules, which were mixed with a clear type of silicone known as polydimethylsiloxane, New Atlas explained. This solution was then applied to a film of conventional CPI, and allowed to dry. When the underlying CPI was stressed to the point of fracture, the surface layer of microcapsules also cracked, causing the capsules in that area to rupture and release their oil. When exposed to the air, the oil hardened into a transparent solid, filling and repairing the crack. Although the hardening pro-

Linseed or flaxseed oil was used in the Korea Institute of Science and Technology’s self-healing CPI technology  Photo: Pixabay

cess was fairly slow at room temperature (25ºC), it could be accelerated by heating the bi-layer material to 70ºC and raising the ambient humidity to 70%, New Atlas said. Alternatively, if the material was exposed to ultraviolet light, the released oil hardened within just 20 minutes, repairing cracks by over 95%.

As well as making smart phones more robust, colourless self-healing polymers could eventually be widely used in outdoor applications, such as in transparent displays and/or optically-related fields of flexible electronics, according to the researchers, who published their results in Composites Part B: Engineering.

Yield10 field tests camelina plants for PHA bioplastics US agricultural biotech firm Yield10 Bioscience announced on 19 January that it had successfully grown camelina plants engineered to produce high levels of polyhydroxyalkanoates (PHA) bioplastics. The company said direct production of PHA in seed as a co-product with oil and protein meal could potentially enable production of PHA bioplastics on an agricultural scale at costs in line with commodity vegetable oils. PHA are natural polymers, prevalent in nature, and PHA bioplastics could ultimately be used to manufacture a wide range 12 OFI – FEBRUARY 2021

Renewable news Feb.indd 2

of fully biodegradable consumer products, Yield10 said. The prototype plants were programmed with microbial genes to produce camelina seed containing high levels of PHA bioplastic and grown at test sites in the USA and Canada. Compared to control plants, Yield10 said the engineered PHA camelina lines had emerged and matured later but had displayed good vigour, branching, flowering and seed set once established. The levels of PHA produced in seed at the two different locations had been consistent and measured up to 6% PHA

of mature seed weight depending on the plant line tested. Based on these results, Yield10 had selected two PHA camelina lines for larger scale field testing in 2021, pending the issue of permits in the USA. “Although not essential for initial commercial launch, our long-term technology goal is to increase the PHA content of seed to about 20% of the mature seed weight and combine that with advanced higher yielding, herbicide tolerant varieties to drive production costs as low as possible,” said Yield10 Bioscience chief science officer Kristi Snell. www.ofimagazine.com

01/02/2021 15:33:49


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TRANSPORT NEWS IN BRIEF WORLD: New vessel orders have fallen to a 20-year low due to ship owners’ uncertainty over which alternative technology to use as they face new pressure to switch to less-polluting fuels, Bloomberg reported on 8 January. Orders had fallen almost 10% in 2019 and by more than 50% in 2020 – the lowest level in two decades, IHS Markit data shows. In 2018, the International Maritime Organization set a target to cut shipping greenhouse gas emissions in half by 2050 from 2008 levels. A new rule banning marine fuel with more than 0.5% sulphur also came into effect on 1 January 2020. Ship owners must either install scrubbers to clean up emissions, use low-sulphur fuel or alternative fuels. “People aren’t ordering ships because we don’t know what to fuel them with,” Morten Aarup, head of market research at Danish vessel owner D/S Norden A/S, was quoted as saying at a recent panel discussion on shipping trends.

Cargill acquires stake in Port Qasim terminal Global agribusiness giant Cargill has acquired a minority equity stake in Fauji Akbar Portia Marine Terminal Limited (FAP), a leading Pakistani bulk terminal operating at Port Qasim, Karachi, Daily Pakistan reports. FAP began operations in 2010 and provides ship berthing, unloading, storage and bagging services for oilseeds, grains, cereals, rice and fertilisers. It is a joint venture between Fauji Foundation, Akbar Group of Companies and the National Bank of Pakistan (NBP). The acquisition was part of Cargill’s strategic plan to invest US$200M in Pakistan, announced in January 2019, the 9 December Daily Pakistan report said. “With its global port experience, Cargill will

help drive greater operational efficiencies for the port to reach its potential of handling agri-cargo safely and efficiently,” Fauji Foundation chairman Waqar Malik stated. The FAP terminal has a capacity of 4M tonnes/year with transit storage in silos or warehouses. Clients listed on its website include ADM, Apsea, Concordia, Glencore, Karachi Grains, Louis Dreyfus Commodities, Mahmood Group, Mapak, Nidera, Pakistan Oil Mills and Peter Cremer. Daily Pakistan said Cargill had been present in Pakistan since 1984 and its operations there now comprised refined oils and the trading and handling of animal feed, grains and oilseeds, cotton, sugar and metals.

Oilseed workers agree deal with crushers Argentina’s oilseed workers’ unions signed a deal with crushing companies on 29 December to end a 20-day strike that had paralysed exports, Reuters reports. The deal included a twopart 25% rise in salaries from January to August. Increases for the rest of the year would be determined by the inflation rate,

Argentina’s crushing and export chamber, CIARA-CEC, said. Reuters wrote that workers went on strike over wages they said did not fully compensate them for the country’s high inflation rate and the risk of working during the COVID-19 pandemic. The Rosario grains exchange said the loading of 162 ships

had been delayed at Argentina’s ports, affecting some US$1.458bn in exports. Soya crushing and other activities had also been put on hold since workers walked off the job on 9 December, affecting the operations of international agribusiness giants such as Cargill, Bunge and Louis Dreyfus.

Argentine truck strike hits ports, Brazil action due Indefinite strike action by truckers in Argentina is having an impact on the number of lorries arriving at the country’s main grain and oilseed ports, industry sources told AgriCensus. The actions, which started on 15 January, included intermittent road blockades by around 2,000 independent truck owners and drivers, members of the Transportistas Unidos de la Argentina (TUDA). “The strike action is currently affecting all grain ports, including the terminals in Necochea and Bahia Blanca, in Buenos Aires province. The transport and security ministries are intervening in this conflict,” one source was quoted as saying. 14 OFI – FEBRUARY 2021

Transport news Feb NEW.indd 2

Brazil is particularly reliant on truck transportation to move goods around the country as it has few major railways Photo: Adobe Stock

Another industry source said only 10% of the usual flow of trucks was transporting grain to local ports. Freight transport businessmen had partially blocked the Bueno Aires-Rosario highway along with other routes in the south of Santa Fe province, to

claim rate increases due to rising costs, AgriCensus reported. They had also blocked access to the underwater tunnel connecting the cities of Santa Fe and Paraná, in Entre Ríos. TUDA members were also demanding infrastructure improvements at national roads

as well as increased security for truck drivers, according to AgriCensus. Brazilian truck drivers were also due to strike on 1 February over high diesel prices. Any widespread, prolonged strike action could disrupt Brazil’s new soyabean crop, which was expected to come to market in February and was already facing some concerns over delays, AgriCensus said. Brazil had few major railways and was particularly reliant on truck transportation to move goods around the country, Brazil is forecast to export 85M tonnes of soyabeans in the 2020/21 marketing year, according to US Department of Agriculture data. www.ofimagazine.com

03/02/2021 16:52:36


BIOTECH NEWS MEXICO: Mexico has banned the domestic cultivation of genetically modified (GM) corn and will also phase out GM corn imports by 2024, The Wire Science reported on 3 January. Critics said the ban would limit options for Mexican farmers. “The lack of access to production options puts us at a disadvantage compared to our competitors, such as corn farmers in the United States,” said Laura Tamayo, spokeswoman for Mexico’s National Farm Council, adding that banning GM corn imports would also imperil the food chain. Mexico was largely self-sufficient in white corn used to make the country’s staple tortillas, but depended on imports of mostly GMO yellow corn from the USA for livestock feed. USA: US biotech company Calyxt Inc has contracted to sell its entire 2020 gene-edited soyabean crop to agribusiness giant ADM. The company said on 14 December that the sale amounted to around 4M bushels of its high oleic soyabean, which was launched in 2019 as the first commercially approved gene-edited food in the USA. Reuters reported Calyxt as saying that the oilseed had zero trans fat per serving and lower saturated fats and, as part of the deal, ADM would crush the soyabeans as well as market and sell the resulting oil and meal.

China approves GM corn as feed demand grows China’s Ministry of Agriculture and Rural Affairs has approved two genetically modified (GM) corn varieties for import at a time of surging demand for animal feed, Bloomberg reports. Corn imports had reached record levels due to China rebuilding its hog industry following African swine fever (ASF), the 11 January report said. As of 31 October 2020, the ministry reported 88% of hog production recovering to preASF levels, S&P Global Platts wrote on 29 December. The two new GM corn varieties approved for import are

the glyphosate-resistant and insect-resistant MON87411 sold by Bayer’s Crop Science unit, and MZIR098 produced by Swiss agri-science company Syngenta AG. The strains have been approved for five years starting December 2020. The ministry is also set to approve a GM corn and a GM soyabean variety developed by domestic company Beijing Dabeinong Technology Group, according to Reuters. The government had never allowed cultivation of GM soyabean or corn varieties but recently said it wanted to

support biotech breeding to boost food security, the news agency said. The glyphosate and glufosinate-resistant DBN9004 soyabean had already been approved as safe in Argentina, where Dabeinong was seeking commercial production. Reuters said a public comment period was now open until 1 February and although further steps were needed before cultivation could begin, the move towards approval was timely given a growing corn deficit in the world's top grain grower.

France against stricter regulations on GE France is opposed to regulating gene-edited crops in the same way as genetically modifed organisms (GMOs), the country’s agriculture minister was reported as saying by Reuters on 18 January. In 2018, the European Court of Justice ruled that mutagenesis, among so-called New Breeding Techniques (NBT) based on targeted editing of genes, fell under rules applying to GMOs that incorporate DNA from a different species, Reuters said. That decision was welcomed by some environmentalists but opposed by some seed makers and scientists, who said it penalised Europe’s agricultural research capacity. “NBTs are not GMOs,” French agriculture minister Julien Denormandie was quot-

Gene editing edits a plant or animal's existing genome, while genetic modification introduces genetic material from another organism

ed as saying in an interview published by several farming news outlets, including Agra Presse on 15 January. “(NBT) technology allows much quicker development of a variety that could have emerged naturally at some point,” he said, calling for

Photo: Adobe Stock

IN BRIEF

NBT not to be regulated like GMOs. France bans the cultivation of GM crops. Meanwhile, a study on the issue requested in late 2019 by the EU’s executive was due to be submitted by the end of April, Reuters said.

UK launches consultation on gene editing of crops, livestock

The UK government has launched a consultation on the use of gene editing to modify food crops and livestock now that it has left the EU, BBC News reported on 8 January. Speaking at the Oxford Farming Conference, Environment Secretary George Eustice said 16 OFI – FEBRUARY 2021 

Biotech news Feb.indd 2



the technology could be used to develop crops more resistant to disease and extreme weather and that the UK no longer had to "slavishly follow" European law, which was "notoriously restrictive and politicised". Gene editing (GE) techniques essentially edit a plant or

animal’s existing genome, compared with genetic modification (GM), where genetic material is inserted from one type of organism to another. In 2018, the European Court of Justice ruled that GE crops should be subject to the same stringent rules as conventional

GM organisms (GMOs). Eustice said GE raised far fewer ethical or biological questions as organisms created by the process could have been created naturally and so "respected the laws of nature". The public consultation would run until 17 March.

www.ofimagazine.com

04/02/2021 11:44:24


DIARY OF EVENTS 25 February 2021 Oleofuels Online Series (Online) www.wplgroup.com/aci/event/ oleofuels-online-series/ 14-16 March 2021 87th NIOP Annual Convention Tucson, Arizona, USA https://niop.org/annual-convention 23-24 March 2021 2nd Virtual Palm and Lauric Oils Price Outlook Conference (Virtual POC 2021) (Online) www.pocmalaysia.com 14-15 April 2021 Black Sea Grain 2021 InterContinental Hotel, Kyiv, Ukraine https://ukragroconsult.com/en/ upcoming-conferences/ 20-21 April 2021 5th International Symposium ‘Dietary Fat and Health’ Frankfurt, Germany https://veranstaltungen.gdch.de/tms/ frontend/index.cfm?l=9072 2-5 May 2021 AOCS Annual Meeting & Expo (Online) https://annualmeeting.aocs.org

ACI launches Oleofuels Online Series Active Communications International (ACI) has launched its Oleofuels Online Series – a programme of two-hour editions throughout the year, each containing at least one presentation as well as face-to-face questions and answers and networking opportunities, “This will not be a ‘webinar’ with hidden attendees,” the organiser behind the long-running annual Oleofuels conference said. “The set-up will be designed to allow all to participate in the discussions and meet as many other attendees as is possible, all with ‘cameras and microphones on’ for the best interaction. We truly believe this will be an online meeting unlike any other you have attended.” The first Oleofuels Online Series will take place on 25 February 2021 from

Mineral Oil Contaminants in Food Berlin, Germany https://veranstaltungen.gdch.de/tms/ frontend/index.cfm?l=10614

2nd European Conference: Future of Biofuels Copenhagen, Denmark https://fortesmedia.com/future-ofbiofuels-2020,4,en,2,1,5.html

15-16 June 2021 Biofuels International Conference & Expo Brussels, Belgium www.biofuels-news.com/conference/ biofuels/biofuels_index_2020.php 15-16 June 2021 OFIC 2021 Hotel Istana, Kuala Lumpur Malaysia http://mosta.org.my/events/ofic-2021

27-29 May 2021

21-24 June 2021

Globoil India Taj Convention Centre, Goa, India www.globoilindia.com/

20th International Sunflower Conference Novi Sad, Serbia https://www.isasunflower.org/newsevents/news/article/20th-internationalsunflower-conference-novi-sad-serbia1%EF%BB%BF

9-10 June 2021 Oleofuels 2021 Marseille, France www.wplgroup.com/aci/event/oleofuels/ Information correct at time of going to press For a full events list, visit: www.ofimagazine.com www.ofimagazine.com  

Diary Feb NEW.indd 1

Book your free or premium ticket online: https://www.wplgroup.com/aci/event/ oleofuels-online-series/ 22-23 September 2020

Grain & Maritime Days in Odessa Odessa, Ukraine www.apk-inform.com/en/conferences/ grainmaritime2020/about

2-5 June 2021

For further details, contact: Adamantia (Mado) Lampropoulou, ACI Europe Tel: +44 (0)203 141 0607 E-mail: mlampropoulou@acieu.net

10-11 June 2021

27 May 2021

EFPRA Congress 2021 Algarve, Portugal https://efpra2020algarve.com/frequentlyasked-questions/

3pm-5pm CET (2-4pm GMT). Javier Vila, director of biowaste trading at Grupo BioOils, will be the key speaker at this event. The event is aimed at biodiesel producers; HVO/HEFA producers; downstream oil companies/HVO producers; researchers; process technology providers; catalyst companies; fuel traders/brokers; consultants; and crop science and feedstock companies.

13-15 July 2021 Biodiesel & Renewable Diesel Summit Minneapolis Convention Centre, USA http://2021.fuelethanolworkshop.com/ Biodiesel.html 1-4 August 2020 Edible Oil/Products Processing Course College Station, Texas, USA https://fatsandoilsrnd.com/annualcourses/

22-23 September 2021 Future of Surfactants Summit North America Boston, Massachusetts, USA www.wplgroup.com/aci/event/ surfactants-summit-america/ 4-8 October 2021 oils+fats Munich 2021 Messe Munich, Germany www.oils-and-fats.com/index.html 5-7 October 2021 Palmex Indonesia 2021 Santika Premiere Dyandra Hotel Medan, Indonesia http://palmoilexpo.com 17-20 October 2021 EuroFed Lipid Congress, Expo Leipzig, Germany https://veranstaltungen.gdch.de/tms/ frontend/index.cfm?l=10713&sp_id=2 18-23 October 2021 North American Renderers Association Annual Convention 2021 The Ritz Carlton Lake Oconee Greensboro, Georgia, USA https://nara.org/about-us/events/ OFI – FEBRUARY 2021

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10/02/2021 10:13:02


EU BIODIESEL

Towards HVO

Photo: Adobe Stock

EU biodiesel consumption fell in 2020 due to COVID-19 movement restrictions, with hydrotreated vegetable oil (HVO) production growing at the expense of fatty acid methyl ester (FAME) The EU is the world’s largest producer of biodiesel, which accounts for about 85% of the region’s total transport biofuels market, according to a report by the US Department of Agriculture (USDA) Global Agricultural Information Network (GAIN) published in June last year. Biodiesel includes fatty acid methyl ester (FAME) and hydrogenation derived renewable diesel or hydrotreated or hydrogenated vegetable oil (HVO). “In 2020, EU biodiesel consumption was expected to decrease by 6% from the previous year as a result of COVID-19 movement restrictions, economic recession and resulting reductions in diesel use,” the report said. The 6% fall in biodiesel and HVO equated to around 1.1bn litres. In contrast, biodiesel and HVO production was forecast to decline by only 0.8% (145M litres).

Demand/consumption

EU FAME and HVO consumption is driven 18 OFI – FEBRUARY 2021

EU biofuels NEW.indd 2

almost exclusively by EU and member state mandates, according to the USDA GAIN report. With the outbreak of COVID-19 last year, most EU member states began to enforce lockdown measures, resulting in reduced demand for biofuels. However, “diesel-biodiesel demand was less impacted by the lockdown measures than gasoline-ethanol demand. This was because declines in heavy-duty commercial vehicle use were less severe than declines in light-duty passenger use of diesel, whereas demand for ethanolgasoline light-duty vehicle use was impacted by lockdown measures alone.” Biodiesel feedstock availability, especially the used cooking oil (UCO) waste stream supply, was sharply curtailed with restaurant and food service industry activity falling off from March to early summer in most EU member states and external third country suppliers. For 2020, the highest biodiesel consumption reductions by volume were forecast for France, Spain, Germany, the UK and Belgium; while the highest reductions in percentage terms were forecast for Belgium, Spain, Portugal Ireland, and France.

Blending rates

Looking at blending rates, the percentage of biofuels in total transport fuel use was forecast to continue its steady upward trend which began in 2017. In 2020, total biofuel blending with

fossil fuels in the EU was forecast to reach 8.1%, compared with 7.6% in 2019, on an energy basis and taking into account double-counting of advanced biofuels. Exclusive of double-counting, the total blend rate in 2020 was forecast at 7.1% for biodiesel and HVO. Blending of food-based biofuels was estimated at 4.9%, well below the 7% cap set by the Indirect Land Use Change (ILUC) Directive. Blending of advanced, non-food based biofuels was estimated at 1.5% in 2020, 80% of which was produced from waste fats and oils.

Production and capacity

With production continuing to shift from FAME to HVO, biodiesel production was expected to decrease by 4% in 2020, while HVO production has been forecast to increase by 14%. The production of HVO has taken off in the EU since 2012. HVO can be produced from waste oils and fats and can be fully substituted for diesel. In 2019, HVO production was estimated at 2.9bn litres and, with new plants in France and Italy, is expected to increase to 3.4bn litres in 2020. HVO consumption is forecast not to be significantly hit by the COVID-19 crisis because of the waste-based doublecounting content of HVO fuels. Recent HVO developments include: Finland and the Netherlands: Neste Oil sells it HVO as a drop-in fuel for road and 

www.ofimagazine.com

03/02/2021 17:59:38


Photo: be Stock

EU BIODIESEL marine transport. The renewable fuels are available for customers in Finland, Sweden, Estonia, Latvia, Lithuania, the Netherlands and the USA (California and Oregon). In addition to drop-in biofuels, the Neste plants produce renewable naphtha, propane, and alkanes. In Finland, Neste operates one plant with two lines of roughly 215M litres each. In 2010, Neste Oil opened up a renewable diesel plant in Singapore with an annual capacity of 910M litres and a similar scale plant in Rotterdam in 2011. Current annual production capacity at the plant in Rotterdam is a maximum of 1.280bn litres. Neste is reportedly planning to build another plant in Europe with a capacity of roughly 2bn litres. In 2018 and 2019, about 80% of the feedstock used by the three Neste plants consisted of waste fats and oils. The waste and residues consist of UCO, palm fatty acid distillate (PFAD), bleaching earth oil, technical corn oil and animal fats. Neste’s goal is to reach a 100% waste and residues share by 2025. In 2015, forest product company UPM opened a HVO plant in Lappeenranta, Finland. The plant’s capacity is some 115M litres of advanced biofuels per year, and the plant is using tall oil, a residue of pulp production, as a feedstock. The company is studying the opening of another plant in Kotka with a capacity of about 550M litres of advanced biofuels and biomaterials. The targeted feedstocks are forest by-products, such as saw dust and branches, and oil from the Brassica carinata crop grown in South America. The plant will be able to supply biofuels to the road, marine, and aviation transport sectors. Additionally, Green Fuel Nordic Oy partnered with Dutch company BTG to produce 25M litres of pyrolysis oil in 2020 at its plant in Lieksa. Other companies which are planning to build advanced biofuel plants in Finland are Nordfuel, BioEnergo and Fintoil.

for palm fatty acid distillate (PFAD). Another project in France is the BioTFueL project, a cooperation of Avril, Axens, CEA, IFPEN, ThyssenKrupp and Total. This project aims to produce 230M litres of advanced biodiesel and bio-jet fuel per year from one tonne of biomass. The demonstration-scale plant is located at Total’s former Flandres refinery in Dunkerque. Italy: In 2014, a HVO plant was opened by Eni in Venice, Italy. Since then, the plant has produced approximately 325M litres/year. Production is forecast to

increase to 540M litres in 2021 as a result of additional upgrades. The feedstock will include an increasing proportion of used oils, animal fats, and by-products from palm oil production. Following the model adopted for Venice, Eni converted a Gela refinery in Sicily into a renewable diesel production facility to produce 770M litres/year. The reconversion started in April 2016 and the facility opened in August 2019. Portugal: Since 2017, GALP has been producing HVO at its facilities in Sines. Production capacity is estimated at 40M u

France: The Total HVO plant located in La Mède, southern France started producing HVO in July 2019. This plant has a maximum capacity of 640M liters/ year. Feedstocks were expected to be 60-75% vegetable oils, and 25-40% waste oil such as UCO and animal fats. Under pressure from NGOs, Total announced, in July 2019, that the plant would use less than 300,000 tonnes/year of palm oil, or less than half of its total feedstocks. An additional factor is that the palm oil’s tax advantages for biofuel production were removed in January 2020 which will likely result in the plant using more canola oil and less palm oil than expected. Reportedly there are still tax advantages www.ofimagazine.com 

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OFI – FEBRUARY 2021

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EU BIODIESEL 2016 14,950 2,190 15,151

2017 2018 2019 2020 15,818 15,110 16,099 15,955 2,582 2,606 2,986 3,412 16,718 17,989 19,136 18,000

187 188 196 188 187 21,476 20,338 21,248 21,350 21,441 59.4% 65.1% 58.8% 61.4% 58.5% 15 11 12 12 15 3,395 3,446 3,446 5,049 5,049 64.5% 74.9% 75.6% 59.1% 67.6%

Feedstock use for biodiesel and HVO (‘000 tonnes) Rapeseed oil 5,710 6,100 6,400 6.700 6,900 Used cooking oil (UCO) 1,150 1,890 2,400 2,644 2,660 Palm oil 2,340 2,240 2,340 2,300 2,800 Soyabean oil 840 540 630 700 870 Animal fats 900 1,030 730 785 420

6,450 2,460 2,590 750 900

6,300 2,990 2,410 950 1,000

6,100 2,790 2,400 900 1,110

Figure 1: EU biodiesel and HVO production, consumption, capacity and feedstock use

u litres. Since Portugal’s production is palm oil based, it will face limits imposed on this type of feedstock. Palm oil producers may certify their feedstock as low-risk ILUC to keep their presence in the EU market beyond 2023.

Source: USDA Foreign Agricultural Service (FAS) posts

2013 2014 2015 Calendar year 12,064 13,549 14,397 Production 1,604 2,311 2,470 – HVO production 13,100 13,954 14,668 Consumption Biodiesel production capacity (million litres) 220 201 244 Number of biorefineries 25,024 22,834 21,928 Nameplate capacity 41.8% 49.2% 54.4% Capacity use production capacity (million litres) HVO 10 11 5 Number of biorefineries 1,828 2,831 3,395 Nameplate capacity 87.7% 81.6% 72.8% Capacity use

HVO production (million litres) Calendar year 2012 2013 2014 Netherlands 410 872 1,013 323 Italy 0 0 377 Spain 73 179 0 France 0 0 483 Finland 317 392 160 Sweden 160 160 0 Portugal 0 0 Total 960 1,604 2,311

2015 1,192 323 262 0 533 160 0 2,470

2016r 2017r 1,154 1,218 323 323 418 465 0 0 135 383 160 160 0 32 2,190 2,582

2018r 2019e 1,218 1,218 451 323 549 482 128 0 385 354 218 192 37 37 2,606 2,986

2020f 1,218 590 480 449 385 256 35 3,412

Ranked by production in 2020 – r=revised, e=estimate, f=forecast. Information in metric tonne and converted to litres –1M tonne = 1,136 litres (FAME) and 1,282 litres (HVO) Figure 2: Main EU producers of FAME and HVO (million litres) Country

Biofuel

Feedstock

Capacity (million litres/year)

Year of opening

Finland Spain Netherlands Italy

HVO HVO HVO HVO

Oils and fats Palm oil

430 (2 lines) 945 (7 plants)

2007

Oils & fats

1,280 465 (770 in 2020)

Finland Sweden Portugal France Italy

HVO HVO HVO HVO HVO

Palm oil and by-products, other oils & fats Tall oil Tall oil Palm oil

2011 2014

Oils & fats (50% palm oil) Used vegetable oil, animal fats, algae and by-products

Figure 3: HVO plants in the EU 20 OFI – FEBRUARY 2021  

EU biofuels NEW.indd 4

115 220 40 640 965

2011

2015 2015 2017 2019 2019

Source: USDA Foreign Agricultural Service (FAS) posts

Calendar year 2012 2013r 2014r 2015r 2016r 2017r 2018r 2019e 2020f Germany 3,106 3,307 3,808 3,505 3,543 3,644 3,578 3,862 3,300 France 2,175 2,170 2,386 2,866 3,152 3,135 2,806 2,556 2,045 Spain 538 659 1,017 1,103 1,319 1,721 2,008 1,835 1,600 Poland 786 673 736 861 985 1,019 1,000 1,091 1,110 Netherlands 974 790 1,056 795 638 1,112 1,022 1,079 1,080 UK 554 510 352 640 572 496 490 500 510 Italy 452 450 326 521 625 398 599 511 511 Other 1,214 1,638 1,179 1,600 2,229 1,516 1,077 1,669 2,443 Total 10,422 10,460 11,238 11,927 12,760 13,236 12,504 13,113 12,543

Source: USDA Foreign Agricultural Service (FAS) posts

Main FAME producers (million litres)

Spain: CEPSA (since July 2011) and REPSOL (since 2013) are producing HVO. Spanish HVO production rose to 549M litres in 2019 from 482M litres in 2018. Sweden: In Gothenburg, Preem produces about 160M litres of HVO/year from tall oil. The company recently expanded its production capacity to 220M litres and is reportedly planning to further expand to 1.3bn litres in 2023. The company is currently investigating the use and sourcing of other raw materials. Preem plans to begin production of up to 300M litres of bio-jet fuel in 2022. Finnish firm St1 plans to produce up to 250M litres of HVO and jet fuel in Gothenburg from 2022. The feedstocks will likely be UCO and tall oil. St1 is also looking at building another plant with a capacity of 500M litres/year of biofuels, beginning operations in roughly five years. One of the raw materials which will be used by Preem and St1 for their expanded production is biocrude oil made from tall oil. To increase the supply of biocrude oil, SunPine is planning to increase its production from about 100M litres to 150M litres in 2020. Pyrocell, owned by Preem and Setra, is also planning to produce nearly 30M litres of pyrolysis oil by 2021 at the earliest.

Industry structure

The structure of the EU biodiesel sector is quite diverse. Plant sizes range from an annual capacity of 2.3M litres owned by a farmer group to 680M litres owned by a large multi-national company. FAME production facilities exist in every EU member state, with the exception of Finland, Luxembourg and Malta. In contrast, HVO production is found in only seven countries (see Table left). The majority of HVO capacity consists of dedicated plants, while in Spain and Portugal, HVO is co-processed with conventional fuel in oil refineries. EU FAME production capacity increased by 0.5% in 2019 due to expansions in Poland and Greece. In 2020, a marginal increase of 0.4% is forecast, again due to increases in Poland and Greece. However, numerous plants throughout the EU are operating below capacity or are temporarily shut down due to negative market conditions, already present before the COVID-19 crisis. www.ofimagazine.com

03/02/2021 17:59:39


EU BIODIESEL With the start of commercial production in new plants in Italy and France, EU HVO production capacity increased by a remarkable 47% in 2019. For 2020, capacity is expected to remain flat.

Feedstocks

Rapeseed oil is still the dominant biodiesel feedstock in the EU, accounting for 43% of total production in 2019. However, its share in the feedstock mix has continuously decreased since its peak in 2008, when it accounted for 72%. This is partly due to higher use of recycled vegetable oil/UCO and palm oil. In addition, EU rapeseed methyl ester (RME) has difficulty competing with cheaper imported soyabean oil methyl ester (SME) and palm oil methyl ester (PME). In 2020, rapeseed oil use is forecast to decline further as the prohibition on the use of three neonicotinoid insecticides (clothianidin, imidacloprid and thiametoxam) is expected to take its toll on EU rapeseed production. The 2020 projection of 6.1M tonnes of rapeseed oil used in RME is equivalent to about 15.3M tonnes of rapeseed. UCO was the second most important feedstock in 2019, accounting for 21%

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of total feedstock. The use of UCO was boosted after some member states allowed double-counting (Austria, Belgium, Croatia, France, Hungary, Ireland, the Netherlands, Poland, Portugal, Slovenia, and the United Kingdom) and others introduced a greenhouse gas (GHG) reduction component to their use mandates (Germany and the Czech Republic). However, since 2016, annual increases have grown smaller. In 2019, the largest EU producers of UCO methyl ester (UCOME) were the Netherlands, Germany, the UK, Portugal, Spain and Austria. Together they accounted for 90% of the use of this feedstock. Smaller amounts were produced in France, Italy, Poland, Ireland, Bulgaria, and Hungary. The use of UCO is forecast to fall by 7% in 2020 because of reduced availability of this feedstock. Throughout the EU, UCO collection dwindled during the COVID-19 pandemic as many member states ordered restaurants to temporarily close down or restricted their services to take-away and delivery. While this leaves room for increased imports, China, one of the main suppliers of UCO to the EU, was also heavily affected by COVID-19 and related restaurant closures.

Palm oil ranked third in terms of feedstock use in 2019 (16%). Its use in 2019 fell by 7% compared to the previous year because of the availability of cheap PME from Indonesia. Palm oil was mainly used in Spain, Italy, France, and the Netherlands and, to a much lesser extent, in Finland, Germany, and Portugal. In 2020, palm oil use is forecast to remain unchanged, as lower use in Spain is offset by increased HVO production in France. The use of soyabean oil and palm oil in conventional biodiesel is limited by the EU biodiesel standard DIN EN 14214 and colder weather conditions. SME does not comply with the iodine value prescribed by this standard (the iodine value functions as a measure for oxidation stability). Additionally, PME has a higher cloud point than RME and SME, and does not provide enough winter stability in northern Europe. However, the incentive persists to maximize the use of SME and PME due to their lower cost. The standard can be met by using a feedstock mix of rapeseed oil, soyabean oil and palm oil. The vast majority of soyabean oil is used in Spain, followed by u Germany and the Netherlands.

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EU BIODIESEL

Driven by regulation The EU’s updated Renewable Energy Directive (RED) II adopted for the 2021-2030 period sets an overall binding renewable energy target of at least 32% by 2030 with a 14% target for the transport sector. Within the 14% transport sector target, food-based biofuels are capped at a maximum of up to 1% higher than member states’ 2020 levels, but with a maximum cap of 7% for each member state. If the cap on first generation biofuels in a member state is less than 7%, the country may reduce the transport target by the same amount (for example, a country with a food and feed crop cap of 6% could set a transport target at 13%). For advanced biofuels, the RED II introduces two different sets of targets for feedstocks. Part A feedstocks (algae if cultivated on land in ponds or photobioreactors; biomass fraction of mixed municipal waste; biowaste from private households subject to separate collection; biomass fraction of industrial waste not fit for use in the food or feed chain; straw; animal manure and sewage sludge; palm oil mill effluent and empty palm fruit bunches; crude glycerine; bagasse; grape marcs and wine lees; nut shells; husks; cobs cleaned of kernels of corn; biomass fraction of wastes and residues from forestry and forest-based industries; other non-food cellulosic material; ligno-cellulosic material except saw logs and veneer logs) must be supplied at a minimum of 0.2% of transport energy in 2022, 1% in 2025 and increasing to at least 3.5% by 2030. Part B feedstocks (used cooking oil - UCO - and some categories of animal fats) will be capped at 1.7% in 2030. Advanced biofuels can be double-counted towards both the 3.5% target and 4% target. Currently, a double-counting mechanism for advanced biofuels) is in place in 20 member states. The most important shift in RED II has been the introduction of specific criteria for high-risk indirect land use change (ILUC) biofuels. In May 2019, the EU published the Delegated Regulation 2019/807 (delegated act) defining high-risk ILUC biofuels. These are feedstocks in 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%). Given the EC’s calculations, only palm oil falls under this definition. The use of high risk ILUC biofuels will be capped at 2019 levels until 2023 and then phased out by 2030. The delegated act allows producers to certify their feedstock as low-risk ILUC if they comply with the RED II’s general sustainability criteria as well as “additional measures”, such as cultivation on unused or abandoned land or by smallholders (less than 2ha). The European Green Deal, presented on 11 December 2019, is a draft climate law that will make the EU’s 2050 climate neutrality objective binding across the union. To achieve this objective, there are 50 action items and environmental performance goals that will guide the EC’s action for the next five years. The deal includes a Farm to Fork Strategy and a Biodiversity Strategy, published on 20 May 2020, that will shape agricultural production and trade policy objectives. As part of the Green Deal, the EC also announced that it will re-open, and proposed to revise, the recently completed legislation of RED II by 2021. It is still unclear if these policy changes will affect oilseeds production and demand in the EU. The EU Common Agricultural Policy (CAP) funds agricultural and rural development support throughout the EU and currently accounts for 38% of the total EU budget. The current CAP programme entered into force in January 2014 and was supposed to be replaced by a new CAP on 1 January 2021. The CAP categorises measures into two main ‘pillars’, the first orientated towards market measures and direct payments to farmers, and the second pillar directed towards rural development. The EC published its legislative proposal for CAP post-2020 on 1 June 2018. However, due to the economic impacts of COVID-19, policy-makers are now discussing extending the existing CAP past its current mandate into 2022 or 2023, and allowing the EC to put forward a new CAP proposal that would be integrated into the legislative priorities of the Green Deal.

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u Animal fats benefitted less from doublecounting than UCO, as there are fewer member states that allow double-counting for animal fat (Denmark, Finland, France, the Netherlands, and the UK) than for UCO. In addition, in Germany, tallow methyl ester (TME) use does not count against the biofuel mandate and its production is exported to other member states. Increased animal fat use is the result of new plants (or capacity increases at existing plants) rather than a function of feedstock prices, as using animal fat requires changes to the technical equipment. In 2019, Italy was by far the largest user of animal fat for biodiesel production, followed by the Netherlands and France. Finland, the UK, Germany, Denmark, Spain, Austria, Ireland, Hungary, and Poland also used animal fats but to a lesser extent. Sunflower oil comprised only 1% of the total biodiesel feedstock, and is mainly used in Greece, France, and Bulgaria collectively accounting for 63% of EU sunflower oil-based biodiesel production.

Trade

In 2019, EU imports of biodiesel/HVO fell by 3.8% compared to 2018. Despite the EU imposing countervailing duties on biodiesel from Argentina in February 2019, Argentina was able to defend its place as the largest supplier of biodiesel to the EU. This was possible as Argentina offered an undertaking (an offer to prevent prices from falling below a certain floor price) which provided planning certainty for Argentine exporters and EU importers. In 2019, the dominant suppliers of biodiesel to the EU were Argentina, Indonesia, Malaysia, and China, accounting for 28%, 25%, 23% and 16% of EU biodiesel imports, respectively. Imports from China more than doubled in 2019 compared to 2018, all of which is believed to be UCO methyl ester and PME. In 2020, EU biodiesel/HVO imports are forecast to drop by 31% to 2.5bn litres. The reasons behind the expected drop are countervailing duties that the EU imposed on biodiesel from Indonesia, as well as the new B30 programme in Indonesia and B20 programme in Malaysia that are expected to reduce exportable supplies by these countries. EU biodiesel exports to destinations outside the bloc are marginal and normally amount to only 1% of production.  ● This article is based on the US Department of Agriculture (USDA) Global Agricultural Information Network (GAIN) EU Biofuels Annual report, published in June 2020 www.ofimagazine.com

03/02/2021 17:59:39


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SUNFLOWER OIL Sunflower oil prices hit seven-year highs last year and the crop is one of the world’s most important oilseeds, with global production growing steadily in the last 25 years. According to the United Nations Food and Agriculture Organization (FAO), sunflower seed production has grown from some 23M tonnes in 1990/99, to around 28M tonnes in 2010/19 and is forecast to reach 60M tonnes in 2050. The four largest producers (Russia, Ukraine, the EU and Argentina) account for 70% of global sunflowerseed volume, with exponential production growth in the last 10 years in the Black Sea region, where increased acreage and higher yields have been achieved by replacing old varieties with hybrid seeds. Sunflower seeds are mostly crushed locally, with world oilseed trade representing less than 10% of global production. In terms of sunflower oil, world trade accounts for 30% of total consumption, with the EU being the major destination of Ukrainian and Argentine exports. Even though sunflower oil production has increased in the last few decades, its market share of the 17 major oils and fats has declined, while palm oil, soyabean oil and rapeseed oil production have grown at faster rates, Oil World figures show. Per capita consumption of sunflower oil has increased marginally from 1kg/year to 1.4 kg/year in the last 30 years. Human consumption accounts for the majority of sunflower oil usage and only 10% of global production is used for industrial purposes today. The FAO sunflower oil production forecast for 2050 is 22.4M tonnes, which implies a significant increase in per capita consumption which could come through: • A sharp rise in per capita edible sunflower oil consumption (from 1.4 to 2.3 kg/year), driven by lower production costs and/or incremental quality differential (Figure 1, yellow bars) • A sharp increase in industrial use, particularly biofuel, with human consumption at 1.8 kg/year) (Figure 1, orange bars)

Human consumption

Sunflower oil is considered a very good choice for food use, presenting a wide range of options for the food industry. Edible oils rich in monounsaturated fatty acids, such as olive oil; and those rich in long-chain omega-3 fatty acids, such as fish oils are considered healthy. Hydrogenated oils support high cooking temperatures but partial hydrogenation of oils leads to the formation of trans fatty 24 OFI – FEBRUARY 2021

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Challenges ahead

Sunflower oil is one of the world’s major edible oils and further developments in new hybrids, improvements in crop management and cultivation in marginal regions are needed to meet future demand Jorge Dominguez Brando and Alejandra V Sarquis acids, which are associated with higher levels of ‘harmful’ LDL cholesterol and decreased levels of ‘good’ HDL cholesterol, and increased risk of coronary heart disease. For many years, work has been carried out to develop alternatives to partially hydrogenated oils, with breeding and selection of oilseeds resulting in some of the widest ranges of oil hybrids. In the market, there are five leading options for sunflower oils with very different characteristics in terms of oil content and fatty acid composition (see Figure 2, following page). Despite this wide range of commercial and pre-commercial hybrids, scientists continue to work on new research lines to further increase the versatility of the sunflower crop in terms of food, nutrition and health and industrial uses. These lines incorporate high oleic + high stearic; gamma and/or delta tocopherols in high oleic; high oleic + high stearic + gamma and/or delta tocopherols; lowest saturated fatty acid content + high oleic; and increased fat content (60%). It is also possible to incorporate, via breeding, precursors of long-chain

omega-3 fatty acids – such as linolenic acid – and its enzymatic complex to generate quantities of eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA) similar to fish oils.

Biodiesel usage

Diverse vegetable oils have been subject to numerous tests to evaluate their biofuels performance against current standards, including the European EN 14214 standard. The EU leads the world in biodiesel production, averaging around 9M tonnes/year in the last three years. Unlike soyabean oil and rapeseed oil, sunflower oil has limiting factors for use in biodiesel, which are closely related to its fatty acid composition. The fundamental parameter which determines biodiesel versatility in the EU is related to the cold point or Cold Filter Plug Point (CFPP), defined as the lowest temperature at which a given volume of pure biodiesel (B100) can still pass through a standardised filter within 60 seconds. Sunflower oil does not show a standard value with this factor. The oil also produces higher waste in the refining 

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Figure 1: Projected sunflower oil production and consumption (million tonnes)

High palmitic

Saturated

Source: UN Food and Agriculture Organisation

SUNFLOWER OIL

Polyunsaturated

High estearic High oleic

Monounsaturated

Sunflower

0%

20%

40%

60%

Figure 2: Fatty acid characteristics in sunflower hybrids

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80%

100%

Source: ASAGIR

Mid oleic

process and requires a wintering process to remove waxes from the oil, resulting in a higher industrial cost.

Conclusion

To develop the sunflower value chain, intense scientific and technological work needs to be carried out in the next 20 years. Breeders will need to improve crop competiveness against other soft oils, such as canola and corn, in terms of both production costs and quality differentials. This includes the development of hybrids with stable performance regarding iodine value, cetane number and CFPP, and with a lower wax content in the oil. In addition, hybrids highly adaptable to semi-arid regions would improve crop competitiveness with other oilseeds. Agronomic practices will also need to be improved to increase yields and to adapt to different growing environments.This includes proper hybrid selection; optimising timing and performance from planting to harvest; water and nutrients management; and weed and pest control.  ● This feature is based on the paper, ‘Challenges for the Sunflower Oil Market 2020’, by Jorge Dominguez Brando and Alejandra V Sarquis of Molinos Río de la Plata SA

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ANTIOXIDANTS & SAUCES

A natural pairing The market for dressings, sauces and marinades is poised for further growth – and the antioxidants sector along with it – as the ingredient is used to preserve the shelf life of these products Ile Kauppila

Different types of dressings, sauces and marinades are regular visitors at many dinner tables around the world. Often, they form significant parts of famous dishes – a Caesar salad or eggs benedict would not be the same without their respective signature dressing and sauce. Plenty of great barbequed or grilled meats also rely on sitting in a marinade for a few hours to soften the meat and let it absorb new flavours. The preparation of these kinds of sauces and marinades ranges in complexity from simple to very difficult. At one end of the scale is one of the most popular salad dressings in the world – plain olive oil, perhaps enhanced with a dash of salt and pepper. On the other hand, recipes like béarnaise sauce require exact cooking temperatures and techniques in order to turn out correctly. With such great variance, it is no surprise that ready-made sauces, dressings and marinades are increasing in popularity. Production of salad dressings, for example, increased at a steady 5.4% annually between 2011 and 2015, according to Market Reports World data. Going forward, the market for ready-made sauces, dressings and marinades is only expected to grow. This projected upward trend is great news for edible oil producers. Many – if 26 OFI – FEBRUARY 2021

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not most – of the most popular products in this category include oils in their recipes. In the same vein, manufacturers of shelf life and food safety ingredients are looking to cash in on the future growth. Kelly De Vadder, marketing manager at Belgium-based speciality ingredients producer Kemin Food Technologies, EMEA, tells Oils & Fats International that the coming years look positive for manufacturers of natural antioxidants and plant extract solutions. “The sauces, dressings,and marinades market provides a lot of opportunity with the application expertise and products we offer,” De Vadder says.

The science of salad dressing

A good number of the most popular ready-made salad dressings depend on oils as one of their primary ingredients. “Many types of sauces, dressings and marinades are emulsions and use at least one type of emulsifier to stabilise the emulsion,” explains De Vadder. Emulsions are, as defined by culinary scientist Jessica Gavin, uniform mixtures of two unmixable liquids. In the case of this product category, these are oil and water in the majority of cases. It is commonly believed that oil and water do not mix but that is not actually the case. www.ofimagazine.com

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ANTIOXIDANTS & SAUCES Ready-made sauces, dressings and marinades are increasing in popularity which is good news for edible oil producers as most of these products include oils in their recipes

Photo: Adobe Stock

Oxidative dangers

When oils and water are agitated, either by a hand whisk or industrial-scale machinery, the oil and water droplets will disperse. After a while, this creates a uniform emulsion, where the water and oil droplets are equally distributed throughout the mixture. However, emulsions have a tendency to separate, as you may have seen in dressing and sauce bottles on supermarket shelves. To slow this process down, producers add a variety of emulsifiers – ingredients that help the oil and water components stay suspended – to the product. These range from canola to soyabean oils, egg lecithin and mustard, according to Kathleen Zelman, nutrition director at WebMD, on Food & Nutrition. The purpose of the oil in the emulsion differs based on the product it is used in. In some products – such as salad dressings – the oil can be the primary ingredient, used for the flavour it imparts into the dish. Many sauces use oils to achieve the right consistency in the final product. In marinades, however, the oil serves a different important purpose. Gavin explains that the oils penetrate into the marinating meat, taking with them oil-soluble flavours from the seasonings used in the marinade. As such, they infuse the meat with the spices and herbs used, infusing it with the desired flavours. www.ofimagazine.com

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Although important for flavour and consistency, the use of oils in sauces and marinades brings with it a significant issue. De Vadder says that one of the major causes of deterioration in emulsions is the used oils’ susceptibility to lipid oxidation. According to B. Matthäus – in a 2010 study titled ‘Oxidation of Edible Oils’ – this oxidation can take several different forms. The main oxidative pathway is autoxidation, degradative effects caused by omnipresent oxygen in normal room temperature. Other significant oxidative processes include photo-oxidation caused by UV light, enzymatic oxidation brought on by the enzyme lipoxygenase, or irradiation by atmospheric ionising radiation. All of these processes have a degradative effect on the emulsion, which will – in the prepared food product – lead to rancidity, off-notes in flavour, and eventual breakdown of the emulsion. According to De Vadder, the interface between the suspended oil and water droplets is particularly vulnerable to oxygen reactions. “At the interface, lipids are more exposed to catalysts like metals and more water-soluble oxidation reagents like oxygen, peroxide and hydroperoxides,” she says. “You would think that dressings, which contain less fat, are also less prone to oxidation, but this is not the case. Low fat emulsions usually contain smaller fat droplets compared with full fat emulsions. However, because of the smaller droplet size, there is a bigger surface contact area with water and metal ions, and this causes a higher risk of oxidation.”

Preventing oxidation

To combat the degradation of their dressings, sauces and marinades, manufacturers have a variety of options. One of the simpler approaches is to use less transparent packaging. De Vadder says that emulsion products packed in fully transparent plastic or glass containers are more prone to oxidation than those packed in, for example, opaque plastic bottles.

However, this is not a perfect solution. Although the dark packaging will have an effect on photo-oxidation, other kinds of oxidation can still easily ruin the product. This is why many manufacturers opt to use antioxidants in their dressings, sauces, and marinades. Some of the basic ingredients of the sauce or dressing already act as natural antioxidants. The popular herb rosemary, for example, has natural antioxidative properties. However, producers still often turn to speciality antioxidants that are formulated to combat oxidation without affecting the taste of the product. De Vadder says that some of these products are actually based on common ingredients. Kemin produces blends of rosemary and green tea extracts, for example, that provide a functional solution for sauce applications. “The blend of rosemary and green tea extracts provides many advantages over single-ingredient antioxidant solutions. The combination of water- and oil-soluble ingredients gives a stronger protection of the entire food matrix. Due to milder, more balanced flavour characteristics of the blend, higher application rates can be used compared with single ingredients,” she says.

Product and judicial challenges

Of course, there are considerations and challenges when it comes to producing custom antioxidant blends. Any such product must work in both the oil and water phase of the emulsion to provide complete protection. The ingredient must also avoid introduction of off-flavours into the product. “Antioxidants typically have a lower flavour threshold in oil-in-water emulsions than in bulk oils. It is therefore important that an antioxidant treatment offers a balanced flavour profile. Furthermore, antioxidant blends that contain emulsifiers should not negatively affect the emulsion stability of the end product,” says De Vadder. She adds that other main considerations in antioxidant development include u OFI – FEBRUARY 2021

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ANTIOXIDANTS & SAUCES

Photo: Adobe Stock

u

Oil is used in salad dressings to impart flavour or achieve the right consistency, while some natural ingredients such as the herb rosemary have antioxidative properties

efficacy, cost-in-use and sustainability. Furthermore, sauce, dressing and marinade producers increasingly favour natural solutions over synthetic ingredients. Legal issues must also always be on any additive producer’s mind. Different jurisdictions have different regulations in place on how much and what products can be legally added to food. In Europe, for example, the EU’S Standing Committee on Plants, Animals, Food and Feed (SCOPAFF) released a statement in September 2018 that required all ingredients added for a technological function, such as delaying oxidation, to be declared on the label. “The SCOPAFF statement has raised a lot of questions in the food industry. Currently the consumer trend to natural and label-friendly ingredients is not aligned with the current European food regulatory framework,” states De Vadder. Regulations such as this mean that the food industry is facing daily challenges to bridge the gap between legal frameworks and customer desires, she adds.

COVID-19 impact

Another significant challenge that has impacted the sauces, dressings and marinades market is the ongoing COVID-19 pandemic. De Vadder says that the changes in shopping habits, diets and purchasing decisions pose a challenge to the entire 28 OFI – FEBRUARY 2021

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food industry, including sauce and antioxidant producers. According to her, not only are consumers seeking more nostalgic flavours – perhaps to remind them of the time before quarantine measures – but the shelf life of ready-made sauces has risen to the forefront. “People have been going less frequently to the supermarket, hence want to have some additional stock at home. This has influenced the requirement for a longer shelf life,” she says. “Sauces are staple foods that consumers will use time and time again, so it is important that they can maintain their quality over a long shelf life.” As a direct result, the demand for highfunctioning antioxidants has increased across the industry. The pandemic has also put even more emphasis on using natural ingredients. De Vadder says that in food service applications, label information is less important, but the story is different in the home market. “Nowadays, people have been cooking more at home. They review the label information more often [than food service companies] when going to the supermarket. This has driven the increased demand for label-friendly ingredients.”

Huge market potential

Despite these challenges, the market for dressings, sauces and marinades is

expected to grow at a steady pace. In the earlier quoted report, Market Reports World says the industry has “huge market potential in the future”. The firm projects that the dressing market will grow from US$103.3bn in 2019 to nearly US$106.3bn by the end of 2026. The growth will materialise at a compound annual growth rate of 6.4% between 2021 and 2026. In addition to salad dressings, the market segment includes other sauces, marinades and condiments such as ketchup, mustard, vinegars, barbeque and Worcestershire sauce, and speciality sauces. As such, this prediction can be seen as applicable across the dressing/ sauce/marinade segment. The demand will be driven largely by consumption in China and Europe, which is expected to grow at a smooth curve. As consumers in these regions focus increasingly on food culture, the dressings market provides great potential to producers of such products, says Market Reports World. Major players in the segment include Campbell’s Soup Co, Cholula, French’s Food, KraftHeinz, Nestlé and Unilever. Similarly, the food antioxidant market is projected to grow at a steady CAGR of 6%, according to Allied Market Research. This growth correlates with increased demand in processed food – such as sauces and dressings – and, as such, antioxidant manufacturers can expect to reap the benefits as well. Antioxidants will be in the highest demand where processed food is most sought after, that being in China and Europe. In this market segment, the leading companies include Archer Daniels Midland, BASF, Du Pont De Nemours and Co, Kemin and Koninklijke DSM NV. De Vadder agrees with this projection, and provides insights into the marketdriving trends in the segment. “Label-friendly alternatives, recognisable kitchen ingredients, natural solutions and sustainable and organic ingredients are all trends in the marketplace that cannot be ignored,” she says. The sauces and marinades market – and the related antioxidant segment – is poised for success. If the manufacturers can resolve the legal issues surrounding their products and stay abreast of the pandemic’s demands, that will only be a dressing on an already good-looking market slice.  ● Ile Kauppila is a freelance journalist and former assistant editor of Oils & Fats International 

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MARINE BIOFUELS

Photo: Adobe Stock

Fuelling the future

Marine biofuels are gaining acceptance but the industry’s adoption of alternative fuels faces challenges Gill Langham The marine biofuel sector is still in its infancy but with regulatory and market drivers in place, it could comprise between 5% and 10% of the global marine fuel mix by 2030, according to a report by the International Energy Agency Bioenergy (IEA Bioenergy). Globally the shipping sector consumes more than 330M tonnes of fuel annually, according to the European Technology and Innovation Platform (ETIP), with the bulk of marine fuels produced from crude oil. However, a combination of decreasing supplies of crude oil, pressure on the sector to reduce its environmental impact and tighter marine fuel regulations are prompting the industry to seek alternative fuel sources with lower sulphur content and a reduced carbon footprint. On 1 January 2020, the sulphur cap for marine fuels dropped from 3.5% to 0.5% in areas outside current emission control areas (ECAs) – essentially affecting www.ofimagazine.com

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everywhere around the world apart from the existing Baltic Sea, North Sea, North American and US Caribbean ECAs, where the sulphur limit is 0.1%. Because the shipping sector is the highest emitter of toxic sulphur oxide in the transportation industry, these limits have been set by the United Nation’s International Maritime Organization. In order to comply, ship owners must either use low-sulphur fuel, install scrubbers on their ships to clean up emissions, or switch to alternative fuels such as liquefied natural gas (LNG). The regulation affects the world’s entire shipping fleet of some 60,000 vessels. According to the IEA Bioenergy: Task 39 report ‘Biofuels for the Marine Shipping Sector’, biofuels will be a key lever in the gradual process of decarbonisation of transportation, mainly from 2030 and in sectors where electrification presents challenges, such as aviation and maritime transport. However, the development of biofuels compatible with marine engines is still in its early stages, and having sufficient feedstock supply and reliable processing technologies to produce price-competitive biofuel at a large scale remains challenging. Against this backdrop, research into

new biofuel products is underway and industry sources say the sector is, in turn, becoming more open to alternative fuel sources. “Over the next few years, biofuel will be the only available option to significantly reduce the carbon footprint of marine fuel, which is essential if shipping is to play its part in reaching global carbon reduction targets,” says Olivier Benny, marketing director at international biodiesel distributor Targray. “Acceptance has grown rapidly in the international shipping sector these past few years. One major shipping company has already converted to biodiesel and another is currently engaged in testing.” However, according to Richard Matthews, a director at EA Gibson Shipbrokers, the industry is not yet fully committed to making the change to biofuels. “Gradually we are seeing companies experiment with biofuels, conducting test voyages for example, but we are not yet seeing companies commit to using large volumes on a regular basis.” DNV GL, which provides advice to the maritime industry, says it receives many requests regarding safe operation and how to comply with international u regulations for the use of biofuels and/ OFI – FEBRUARY 2021

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u

Figure 1: Overview of different feedstock conversion routes to marine biofuels u

or biofuel blends. However, marine biofuels were not currently used in any significant volumes. Over the last year there had been a lot of testing of various types of biofuels by many ship operators, according to Cristos Chryssakis, business development manager at DNV GL (Maritime). “From a technical perspective the experience is generally good, but the main barriers are the fuel cost, availability and a lack of a clear regulatory framework,” he says.

Current biofuels

The potential supply of sustainable renewable diesel with the current technology is an estimated 10-20M tonnes, according to the IEA Bioenergy report. Types of biofuel include FAME (fatty acid methyl ester), HVO (hydrotreated vegetable oil), and BTL (biomass to liquid fuels). Blending conventional fuels with biofuels is an alternative way to reduce fossil fuel consumption while introducing compatible drop-in fuels in the fuel mix, the report says. According to DNV GL, FAME is the most widely available type of biodiesel in the industry and is often blended with regular marine diesel.

Feedstocks

Crops with a high lipid content, including palm, soyabean and rapeseed, are currently the main feedstocks for biodiesel, according to the IEA Bioenergy report. However, the report notes that these feedstocks are generally difficult to source cheaply and sustainably for an expanded 30 OFI – FEBRUARY 2021

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Source: IEA Bioenergy: Task 39 report

MARINE BIOFUELS

commercial production of marine biofuels. Rapeseed oil is the preferred feedstock in the EU due to its favourable properties (oxidation stability, high yields per hectare).

Challenges

The immediate challenge is that the shipping sector has little knowledge on handling and applying biofuels as part of its fuel supply, according to the IEA Bioenergy report. Another factor is that the volumes of biofuels required to supply the shipping sector are so high, with a single large ship potentially consuming the annual production from a single medium-sized biofuel facility. Of the current biofuels commercially available, the IEA Bioenergy report says that only plant biodiesel derived from plant oil or pulping residues and bioethanol are produced at a level to supply significant volumes of fuel. Another issue is that plant oil-based fuels are currently used at a significant scale for bio jet fuels, leading to competition for feedstocks between the shipping and aviation sectors. In a report jointly produced by Channoil Consulting and EA Gibson Shipbrokers in December 2020, the authors note that although HVO is actively being developed by some bunker marketing organisations and producers, the demand for HVO in the road diesel market is much stronger, driven by aggressive mandates in Europe and California. The report notes that there is also increasing demand for HVO into the aviation sector. All these factors would probably eclipse HVO on the marine fuel scene.

“While HVO production capacity is increasing at a fast rate, there is going to be a global shortage of sustainable feedstocks suitable for either biodiesel or HVO production,” the report says. For this reason, the report concludes that it seems likely that biofuels will play a minimal role in decarbonisation of the maritime sector, thanks mainly to it being more attractive for other applications. The cost of biofuels is also higher than the cost of fossil fuels and is expected to remain so in the short to medium term. “Marine biofuels are currently up to twice as expensive as conventional fuels, which is an important barrier for any ship operator who wants to use these fuels,” says Hans Anton Tvete, DNV GL’s maritime programme director in Group Technology and Research. “Most biofuels today are supplied through ports in the Netherlands, due to price incentives that reduce the price premium and make these fuels more attractive.” However, future regulations or marketbased mechanisms, such as CO2 taxes, could make biofuels more economically competitive, he says.

Test runs

Several companies and research institutes are working on both the production of marine biofuels and testing of their compatibility with current infrastructure, of which the US Navy has been a major player. As an initiative of the US federal government, the IEA Energy Bioenergy report says the US Navy has developed a scheme to establish the Great Green Fleet to provide the navy with half of its fuel and power from clean, fossil-alternative sources by 2020, with biofuels providing a significant portion of the alternative fuel mix. German car manufacturer Volkswagen is using fuel made from used vegetable oil from the catering and food industries for the sea transportation of its vehicles. “We are putting the old oils to a climate-friendly subsequent use. With 85% less CO2 emissions compared to conventional fossil fuel, the contribution to climate protection is enormous,” says Thomas Zernechel, head of Volkswagen group logistics. Dutch biofuels supplier GoodFuels, produces its MR1-100 fuel, which is comprised entirely from organic waste products and its use does not require any engine modifications. Alfa Laval plans to test biofuel in the DNV GL-classed DFDS Pearl Seaways. The fuel, which is created through pyrolysis www.ofimagazine.com

04/02/2021 13:03:49


of waste biomass, would be produced in India by MASH Energy. “New fuel alternatives are constantly being introduced to the marine industry, but the knowledge about their behaviour in marine fuel systems is limited. We want to extend that knowledge through testing, beginning with biofuels,” says Lars Bo Andersen, Alfa Laval test & training centre manager. International maritime infrastructure company Jan de Nul Group announced in September 2020 that its trailing suction hopper dredger, Alexander von Humboldt, had completed 2,000 hours operation on 100% renewable, second-generation biofuel oil (BFO). Introduced by GoodFuels in 2018, the BFO is completely derived from sustainable waste feedstock in line with the latest European Renewable Energy Directive (RED). GoodFuels also teamed up with leading tanker shipping company Stena Bulk to complete a successful trial of heavy fuel oil (HFO)-equivalent BFO on Stena Immortal. “The industry needs pioneers willing to collaborate, share knowledge and push the development towards more sustainable shipping,” said Stena Bulk’s president and CEO Erik Hånell. Singapore-based tonnage provider Eastern Pacific Shipping (EPS) also appointed GoodFuels to supply biofuel bunkers for its tanker M/T Pacific Beryl in October 2020. The BFO’s performance will be tested and analysed on M/T Pacific Beryl and on other EPS-managed ships. “We believe that sustainability begins with accountability, which is why we are taking a mixed marine approach towards reducing our emissions,” said EPS CEO Cyril Ducau. International energy company ExxonMobil has completed a successful sea trial of the company’s first marine biofuel oil with Stena Bulk. The marine biofuel oil is a 0.5% sulphur residualbased fuel (VLSFO) processed with a second generation waste-based FAME component.

Research

Researchers in Germany have been looking into the development of drop-in fuels based on sustainable biogenic raw materials which could, in the long term, replace at least part of petroleum-based fuels. Conducted at Fraunhofer UMSICHT, the PyroMar project involves the mapping of the entire process chain for the production of bio-based blending components. The raw material used in www.ofimagazine.com 

Marine Biofuels LATEST draft GL 25 January 2021.indd 4

Photo: Adobe Stock

MARINE BIOFUELS

Plant oil-based fuels are used at a significant scale for bio jet fuels, leading to competition for feedstocks between the shipping and aviation sectors

the project is unused biomass, such as straw, autumn leaves, landscape hay or shrubbery. Tests are currently being finalised at the University of Rostock to ensure that no special modifications to the engine are needed for the bio-based admixture components. “What will be viable, ecologically and economically, in the near future is blending bio-based admixture components with fossil fuels,” says PyroMar project leader Dr Volker Heil from Fraunhofer UMSICHT. Dr Heil and his team from Oberhausen are developing the technology for producing these components, jointly with project partners from Rostock and Heidelberg. The IDEALFUEL project aims to develop a method to convert woody residual and waste materials such as sawdust and wood chips into a biogenic heavy fuel oil (bio-HFO) with ultra-low sulphur levels to be used as a drop-in renewable marine fuel. Using a two-step chemical process, lignin – the polymer found in the structural materials of plants and trees – from dry plant matter (known as lignocellulosic biomass) is converted into marine biofuel. In the first step, lignin is extracted from lignocellulosic biomass in the form of crude lignin oil (CLO), leaving behind a solid cellulose material that can be used in the paper industry or converted into ethanol. The second step involves the CLO being refined and converted into a bio-HFO that can be blended with traditional fossil fuels or used directly in engines without technical modifications. A collaboration between research institutions and industry, the EU-funded

project is coordinated by Eindhoven University of Technology (NL) and involves participants from four different EU and associated countries. Participants include GoodFuels and ThyssenKrupp Marine Systems. Marine fuel supplier Auramarine has teamed up with a number of other companies, including Neste and FGShipping, on the BioFlex project to aid the development of cost-effective biofuels. Funded by Business Finland, the aim of the three-year collaborative study headed by VTT Technical Research Centre of Finland is to find low-emission bio-based liquid fuels for use in existing diesel engines in the maritime and power sectors. The project aims to ensure sulphur, nitrogen and particulate matter emissions are minimised, blending properties are considered, and that the chosen biofuel fulfils the engine requirements. “It is this attention to detail and providing assurance that all aspects of the supply chain have been covered, that will be the foundation in enhancing industry confidence, driving widespread adoption, and ensuring biofuels play a significant role in the future fuels market,” says Auramarine’s director of engineering & products, Teemul Jutila.

The future

The sustainability of feedstock and cost of biofuels will be an important factor in the future manufacture and use of biofuels in the maritime sector. However, the main driver for the introduction of marine biofuels for the first decades of the 21st century in the shipping sector will largely be regulatory, according to the IEA Bioenergy report. ● Gill Langham is the assistant editor of OFI OFI – FEBRUARY 2021

31

04/02/2021 13:04:06


STATISTICS STATISTICAL NEWS

International Grains Council

Global rapeseed area set to increase

Rapeseed/canola area forecast (million hectares) 450

40

Stocks, major exporters * World production World consumption

400

Projected soyabean supply and demand

30

350

International Grains Council

20 300 10

250 200

16/17 17/18 18/19 19/20 20/21 (est) (forecast)

21/22 22/23 23/24 24/25 25/26 (projection)

*Argentina, Brazil, USA

0

Soyabean supply and demand summary, 2016/17–2025/26 (tonnes)

14 Jan 2021 7 Jan 2021 31 Dec 2020 21 Dec 2020 14 Dec 2020 7 Dec 2020 30 Nov 2020 23 Nov 2020 16 Nov 2020

Malaysian/ Indonesian PKO

1,016.00 1,093.00 1,049.00 958.00 929.00 941.00 906.50 885.50 863.00

Philippine/ Indonesian CNO

1,402.00 1,431.50 1,303.50 1,260.00 1,249.00 1,163.50 1,132.50 1,152.00 1,117.50

1,486.00 1,503.50 1,470.00 1,480.00 1,479.00 1,459.00 1,446.50 1,462.00 1,355.00

CPO, PKO and CNO prices (US$/tonne, cif Rotterdam)

Prices of selected oils (US$/tonne) 

Mintec

Aug 20

Sept 20

Oct 20

Nov 20

Dec 20

Jan 21

Soyabean

835.0

872.4

869.1

946.9

1,001.7

1,052.4

Crude palm

692.1

740.7

752.9

855.6

918.4

915.4

Palm olein

670.8

723.1

723.2

811.8

873.6

877.6

Coconut

988.1

1,037.5

1,105.8

1,396.2

1,491.5

1,466.8

Rapeseed

935.4

924.3

913.4

988.0

1,039.9

1,085.8

Sunflower

842.6

977.3

985.6

1,117.7

1,185.1

1,294.4

Palm kernel

785.0

818.8

830.7

1,104.9

1,246.5

1,356.2

Average

821.0

871.0

883.0

1,032.0

1,108.0

1,150.0

Index

195.0

206.0

209.0

244.0

263.0

272.0

32 OFI – FEBRUARY 2021

Stats Feb.indd 1

Building on record output in 2020/21, world production of soyabeans is projected to reach successive highs in the medium-term, mainly due to increases in Brazil and the USA, according to IGC five-year baseline projections. Against a backdrop of elevated international prices, a sizeable increase in planted area is anticipated in 2021/22 while yields are assumed to gently trend higher. Consumption is seen rising to a new peak in 2020/21 on growth in China’s uptake of soya meal, tied to a recovery in pig herds and rising poultry output. Additionally, growth in biodiesel sectors in Argentina, Brazil and the USA could contribute to expanded soyabean oil use through to 2025/26. Despite COVID-19 restrictions, there was very little impact on trade flows, with volumes surging to a record in 2019/20. After a marginal fall in 2020/21, shipments are predicted to expand continuously during the medium term, by an average of 1.7%/year, with gains largely tied to bigger deliveries to Asia.

Coconut oil vs palm kernel oil prices

FOSFA

Malaysian/ Indonesian CPO

The global area planted to rapeseed is likely to reach 35.6M ha in the 2021/22 crop year, a 1.4% increase on the current crop year, according to the International Grain Council (IGC). Canada is expected to see the biggest rise in area with a projected area of 8.7M ha for 2021, a rise of 4.6% on the year. Farmers in other important rapeseed-producing countries are also likely to sow more of the crop including India, with an increase of 2.8% to 7.4M ha, and Russia with a rise of 1.1% to 1.4M ha. In contrast, the area planted to rapeseed in the EU-27+ UK will decrease slightly by 0.1M ha to 5.5M ha, according to Agrarmarkt Informations-Gesellschaft. The IGC also expects a sharp decrease of 16.4% to 0.9M ha for Ukraine as a result of excessively dry conditions at the time of sowing.

FOB Philippines coconut oil (CNO) prices have fallen by about US$150 since the end of last year, and are consolidating at around US$1,350, according to Lipidos Santiga’s 27 January Market Flash. The improved production outlook against palm kernel oil (PKO) has sharply reduced the spread between the two commodities, which is now below US$50/tonne in the Rotterdam market. The International Grains Council is an intergovernmental organisation focused on international cooperation, openness and stability in grains trade Mintec provides independent insight and data to help companies make informed commercial decisions. Tel: +44 (0)1628 851313 E-mail: sales@mintecglobal.com

www.ofimagazine.com

01/02/2021 15:46:02


Profile for Quartz Business Media

OFI February 2021  

OFI February 2021