OFI May 2021

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OILS & FATS INTERNATIONAL MAY 2021 ▪ VOL 37 NO 4

SPREADS

Plant butters on the ascent

RUSSIA/UKRAINE

Quality risks in sunflower oil

Cover May.indd 1

02/05/2021 18:26:25

CONTENTS

IN THIS ISSUE – MAY 2021 FEATURES

NEWS & EVENTS

Spreads

18

Photo: Wildbrine

Photo: Adobe Stock

Russia/Ukraine

27

Quality risks in sunflower oil Russia and Ukraine have significantly increased their sunflower oil exports and production in the last 10 years.

Safety parameters on pesticides, PAH, residual solvents and mineral oil contamination must all be met to ensure oil quality

Plant butters on the ascent Plant-based butter’s share of the spreads market is rising as consumers increasingly focus on health and the environment

2

Biden and biofuels

News

Photo: Adobe Stock

4

Photo: Adobe Stock

Global round-up of projects The latest projects, technology and processing news around the world

Comment

Commodity trading

Plant & Technology

22

Photo: Adobe Stock

30

Transparency tools The rapid expansion of renewable diesel production has been accompanied by a growth in services to deliver price transparency and confidence in this sector

Belgium to ban palm and soyabean oils in biofuels

Biofuel News

10

Total begins bio jet fuel

production at two plants Renewable News

12

Clariant in joint venture with India Glycols

Transport News

14

Rival rail bids to form USCanada-Mexico network

Biotech News

16

Bayer will not take case to Supreme Court for appeal

Diary of Events

17

International events listings

Statistics

32

www.ofimagazine.com

Contents May.indd 1

World statistical data

OFI – MAY 2021

1

05/05/2021 12:51:51

EDITOR'S COMMENT

OILS & FATS INTERNATIONAL

VOL 37 NO 4 MAY 2021

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 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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2 OFI – MAY 2021

Comment May.indd 1

Biden and biofuels As US president Joe Biden approached his first 100 days in office on 30 April, his climate policies have already set him apart from his predecessor and made an impact on the vegetable oils market.

Biden’s election has given a huge push to green fuels, particularly biodiesel in the USA, Godrej International director Dorab Mistry told the Virtual Price Outlook Conference (POC) on 24 March.

Fossil fuel refineries in the USA have been switching to biofuel/ HVO production and US biodiesel demand for soyabeans has been so high that top global canola producer Canada has been importing the oil from Europe to meet edible oil demand in North America, he said.

Vegetable oil prices are currently at historic highs, double what they were last year due to a global production deficit, low stocks and biofuels consumption. Biodiesel blending mandates in key oil crop producing countries – such as Indonesia, the USA and Brazil - have helped to keep prices high. Those not in the oils and fats business might find it surprising that around 17.9M tonnes of palm oil (some 23% of world palm oil consumption) is projected for use in biodiesel and HVO this year. For soyabean oil, the figure is 12.6M tonnes, according to Oil World executive director Thomas Mielke.

Now, President Biden has announced a new US target of reducing greenhouse gas (GHG) emissions by 50-52% by 2030 against a 2005 baseline, including renewable fuel as one tool to achieve this.

“Agriculture is a key part of the solution to climate change,” Biden has said in his election pledges. “Advanced biofuels are now closer than ever as we begin to build the first plants for biofuels, creating new solutions to reduce emissions in planes, ocean-going vessels and more.”

Biden announced the new target on 22 April as he hosted 40 world leaders at a virtual Earth Day summit in an effort by his administration to reclaim credibility on climate change after four years of inaction under Donald Trump.

Leaders of countries like Brazil, Canada and Japan made commitments to curb domestic GHG emissions, with Brazil president Jair Bolsonaro vowing to end illegal deforestation in the country by 2030; and Japanese Prime Minister Yoshihide Suga pledging to curb emissions by 46% by 2030 compared with 2013 levels, an increase from its previous 26% goal. China, meanwhile, re-affirmed commitments to peak emissions before 2030.

Pledges are one thing. There are still thorny issues to overcome such as coal use (China’s coal output will continue to increase under its current five-year plan which ends in 2025), carbon pricing, and how much wealthy countries should foot the bill for change considering they are responsible for the majority of carbon already in the atmosphere.

Thorny issues aside, it can only be a positive thing that the USA is re-engaging in global climate talks, considering it is the world’s second largest GHG emitter after China.

Meanwhile, biodiesel will continue to provide the floor to vegetable oil prices, which experts at the Virtual POC conference believe will peak soon. LMC International chairman James Fry said high prices will ration food demand and oil crop output should rise slowly, reviving stocks, with Mistry adding that high prices will incentivise farmers to eventually produce more. This will no doubt come as a relief to buyers in the market.

Serena Lim serenalim@quartzltd.com www.ofimagazine.com

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NEWS IN BRIEF CHINA: Strong demand from China’s recovering livestock industry boosted the country’s first quarter imports of soyabeans and grains, Reuters reported from customs data on 13 April.

In the first three months of this year, China’s soyabean imports came in at 21.18M tonnes, up 19% from 17.79M tonnes last year. In March alone, the country imported 7.77M tonnes of the oilseed, up 82% from a year ago.

Crushers had previously stepped up soyabean purchases, anticipating healthy demand from the recovering pig farming sector. However, African swine fever outbreaks had wiped out at least 20% of the breeding herd in northern China, Reuters said.

Belgium to ban palm and soyabean oils in biofuels Palm and soyabean oils will be banned from biofuel production in Belgium in a bid to halt deforestation, The Brussels Times reported a government minister as saying on 13 April.

Belgium had notified the European Commission on 22 March of its plan, The Western Producer wrote.

Federal Minister for Environment and Climate Zakia Khattabi said that following the examples of Denmark, France and the Netherlands, biofuels made from palm oil would no longer be allowed on either the Belgian market or in the transport sector from 2022, The Brussels Times wrote. Soyabean oil would also be banned as a raw material for transport fuels from 2023.

Between 2019 and 2020, the use of palm biodiesel had increased ten-fold on the Belgian market to 231M litres, according to the minister, adding that producers would have to move towards other-generation biofuels from 2022.

“To produce the quantity of biodiesel for the Belgian market, palm oil plantations are needed with a total area of more than 100,000 football pitches. We know from studies that at least half of these palm oil plantations are planted on land that has been deforested in the recent past.”

The move was the first measure taken by Belgium since joining the Amsterdam Declarations Partnership, an agreement aimed at eliminating deforestation in relation to agricultural commodities by 2025, Khattabi said.

Belgium is acting ahead of the EU’s Renewable Energy Directive II, which caps the use of high risk indirect land use change (ILUC) biofuels at 2019 levels until 2023, and then phases them out by 2030. Only palm oil falls under this definition and both Malaysia and Indonesia have requested World Trade Organization dispute consultations with the EU regarding these measures, saying they are an unreasonable trade barrier.

New legislation prohibiting the use of cannabis and cannabis extracts in cosmetics is being proposed by the Chinese government, Jing Daily reported on 29 March from an announcement on the National Institutes for Food and Drug Control’s (NIFDC) website.

The legislation would include Cannabis sativa kernel fruit, Cannabis sativa seed oil, Cannabis sativa leaf, as well as cannabidiol (CBD).

China’s proposed ban contrasted with the Western approach where the complex regulatory landscape was being simplified, Jing Daily wrote,

China has proposed banning cannabis and its extracts in comestics

although it was in line with measures in other Asian coun-

tries where oversight of CBD products was still restricted.

Photo: Adobe Stock

China may prohibit cannabis extracts in cosmetics

CBD is one of the two most common compounds found in cannabis, the other being tetrahydrocannabinol (THC).

CBD does not contain any psychoactive properties, unlike THC, and its use in skin care and beauty produts has grown in recent years.

Marijuana is classified as a dangerous narcotic drug in China and the possession of hemp seeds is criminalised.

If China continued to prohibit cannabis-related ingredients in cosmetics, some industry figures claimed it would lead to the loss of a huge market opportunity, Jing Daily wrote.

Vicentin returns to full capacity following toll deals Argentine crusher Vicentin has returned to full production at its San Lorenzo crushing plant for the first time since defaulting on its contracts in December 2019, AgriCensus reported on 17 March.

The return to full crushing capacity followed a number of toll agreements with companies including grain cooperative ACA and Unión Agrícola de Avellaneda (UAA).

The Santa Fe plant had a monthly crushing capacity of approximately 400,000 4 OFI – MAY 2021

General News May.indd 2

tonnes, a company spokesperson said.

“The plant is working at its full capacity ... and during March and April, Vicentin has toll agreements that will guarantee the use of the total capacity,” the source added.

Vicentin had previously agreed a toll agreement with grain exporter Diaz & Forti to operate most of the capacity of its San Lorenzo crushing plant, but the firm was not currently crushing as it had also run into financial difficulties, AgriCensus said.

The company had also reactivated its sunflower crushing plant in Ricardone, Santa Fe, after negotiating a toll agreement with local cooperative UAA, AgriCensus reported.

Vicentin has faced financial problems since defaulting on payments to grain suppliers and brokerage firms in December 2019. At the time, it was reported to owe US$350M to grain suppliers, with a total debt of US$1.5bn. www.ofimagazine.com

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NEWS

COFCO merger to create ag giant China’s largest food company COFCO is planning to merge its international trading arm with several domestic businesses to create an agribusiness giant with assets across multiple continents, Global AgInvesting reported on 16 March.

State-owned COFCO owned a 60% stake in its international trading arm COFCO International, with the remainder owned by five partners: Temasek, Standard Chartered Bank, China Investment Corporation, Hopu Investment Management, and the International Finance Corporation of the World Bank.

The merger, if it went ahead, would be followed by an initial public offering (IPO) – likely to take place in Shanghai – of the

new entity, Global AgInvesting wrote.

Founded in 1949, China Oil and Food Corporation (COFCO)’s core business is based on grain, edible oil, sugar and cotton.

According to its website, COFCO has total assets of US$85.44bn, an annual revenue of US$71.8bn, processing capacity of 90M tonnes/year and an annual port transit capacity of 65M tonnes.

In China alone, COFCO has an integrated processing capacity of more than 60M tonnes and is the country's largest food processing company, with products including rice, wheat, corn, edible oil and oilseeds, sugar, cotton, meat and dairy products, wine and tea. On the global stage, COFCO said it was an industry leader in rice, wheat, corn,

edible oil, oilseeds, sugar and cotton in over 140 countries, earning more than 50% of its operating income from overseas business.

• The merger of state-owned Chinese chemical giants – Sinochem Group and ChemChina Group – was confirmed by the Assets Supervision and Administration Commission of the State Council on its website on 31 March, China News reported.

Sinochem Group is a leading operator in the oil and chemical industry, providing agricultural inputs (seeds, agrochemicals and fertilisers) and agricultural services.

The new company would have operations in life sciences, material sciences, the basic chemical industry, rubber tyres and urban operations, according to Sinochem.

A US agricultural startup has developed a cover crop derived from field pennycress that produces an oil for use in sustainable fuel and animal feed, Des Moines Register reported on 31 March.

CoverCress had attracted investment from agribusiness giants including Bunge and Bayer, and planned to make its cash cover crop available on limited acreage in Illinois later this year before expanding to commercial-scale next year, the report said.

Cover crops such as cereal rye and oats are planted near the autumn corn harvest, putting roots in the ground to

IN BRIEF BRAZIL: Brazil has temporarily suspended import duties on corn, soyabeans and soya oil and meal until the end of this year in an attempt to slow inflation fuelled by rising commodities prices, Reuters reported on 19 April.

The Chamber of Foreign Commerce (Camex) had already approved the suspension of import taxes on soyabeans and corn until 15 January and 31 March respectively, the report said.

6 OFI – MAY 2021

General News May.indd 3

Photo: Adobe Stock

Start-up develops pennycress for biodiesel, meal

CoverCress' cover crop is derived from field pennycress

anchor the soil and nutrients during winter and spring, then harvested in May before soy-

abeans are planted, according to the report. While they had soil and environmental bene-

fits, they offered few commercial opportunities, although many livestock producers grazed cattle on cover crops.

CoverCress said its pennycress cover crop produced an oilseed that could be processed to produce oil for renewable diesel, biodiesel and sustainable aviation fuel.

Farmers could earn US$50/ acre from the crop.

Plant breeding was being used to increase yield and accelerate maturity of the crop, along with gene editing to improve the oil and meal quality.

CoverCress said it expected US farmers to plant the cover crop on up to 1.6Mha by 2030.

Ukraine proposes measures to fight inflation

The Ukrainian government has proposed a package of measures for sunflower seed crushers and retailers in a bid to stabilise domestic prices for bottled sunflower oil, AgriCensus reported on 15 March.

The plan aimed to limit the impact of food price inflation until the new crop’s arrival in July.

The Ukrainian Ministry of Economic Development had sent out a draft asking for feedback from the industry.

“Participants would agree for the period of validity of this memorandum to not allow the sale price of sunflower oil to increase above the price level that has developed in retail chains as of 1 March 2021,” the draft document read.

The government said it would also keep the current import and export regulations un-

changed and offer crushers “favourable credit resources”.

However, Ukraine’s sunflower sector had indicated that the proposal would be economically unviable as seed prices had soared by over a third since the start of 2021, AgriCensus said.

“This decision will cause harm to Ukrainian oil producers, since it is not wise to regulate the end product price without considering the cost of the raw material,” a crusher told AgriCensus.

Sunflower seed prices in Ukraine have surged following a prolonged drought, with Ukrainian farmers harvesting only 14M tonnes of seeds, down 15% on the year, according to United States Department of Agriculture (USDA) data.

No official decision had been made yet with the memorandum, AgriCensus wrote.

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NEWS USA: US cultivated fat firm Mission Barns has raised US$24M in funding to scale up production and build a pilot plant in the San Francisco Bay area, the company announced on 7 April.

The company had developed a process of cultivating meat from animal cells with a focus on producing animal fat which can be added to meat alternative products.

Mission Barns said it had developed a number of products incorporating its fat, both on its own and through collaborations with meat companies and plant protein partners.

CANADA: Canada's canola oil exports rose by 7% in 2020 with the largest volumes heading to the USA and China but Europe re-emerging as a buyer, according to a report by Germany’s Union for the Promotion of Oil and Protein Plants, based on Canola Council of Canada data.

The country’s canola oil exports were just under 3.4M tonnes in 2020, a 7% increase on 2019. Chinese imports surged 26% to 1.1M tonnes compared to 2019.

The USA remained the top importer, bringing in 1.7M tonnes. Other important buyers included Chile, Mexico and South Korea.

The EU ranked as the sixth most important destination, with an import volume of 48,200 tonnes. The region had not imported any canola oil from Canada in the previous two years.

Sri Lanka bans palm oil imports, new plantations The government of Sri Lanka has banned palm oil imports and new palm plantations as well as instructing producers to uproot existing plantations, Reuters reported on 5 April.

Sri Lanka’s president Gotabaya Rajapaksa was quoted as saying in a statement that the aim was to “make the country free from oil palm plantation and palm oil consumption”.

“Those companies and entities which have done such (palm oil) cultivations shall be required to remove them in a phased manner with 10% uprooting at a time and replacing it with the cultivation of rubber or environmental-friendly crops each year,” the statement continued.

Sri Lanka imports around 200,000 tonnes/year of palm oil, mainly from Indonesia and Malaysia,

according to estimates from traders. Reuters said the number of plantations had also increased in recent years. The country’s Palm Oil Industry Association estimates that Sri Lanka has around 11,000ha of oil palm plantations – just over 1% of the country's total planted area.

Malaysia's Minister of Plantation Industries and Commodities Datuk Dr Mohd Khairuddin Aman Razali said Sri Lanka's ban on palm oil imports was not expected to affect the country's industry as imports were growing in several regions such as Africa and the Middle East.

“The world has a population of over seven billion people and we are confident our palm oil will be accepted worldwide," the Star reported him as saying on 7 April.

JBS adds Vivera to plant-based portfolio

Photo: Adobe Stock

IN BRIEF

Vivera has a range of more than 50 plant-based food products

Brazilian meat processing giant JBS is buying Dutch plant-based meat company Vivera for US$408.11M, Reuters reported on 19 April.

Vivera is active in the Dutch, German and UK markets and is the third largest plant-based protein company in Europe, accounting for around 60% of the region's plant-based pro-

tein market, according to JBS. It has a range of more than 50 products, which are available in 25 European countries.

Soya is a major ingredient in Vivera’s products, which include plant nuggets, chicken plant burgers, plant mince and plant garlic kievs. The GMOfree soyabeans are sourced from China, France and North

America, according to Vivera's website. Vegetable oils are also an integral ingredient in Vivera's plant garlic kievs, for example, containing coconut oil, sunflower oil and rapeseed oil and its plant steak containing sunflower oil and coconut oil. Other ingredients include wheat protein, maize starch and yeast extract.

The acquisition would add to JBS’ other plant-based initiatives such as its Seara unit’s Incrível brand in Brazil and the OZO brand in the USA, increasing its exposure in the meatless sector, said JBS chief executive Gilberto Tomazoni.

JBS is the world's largest meat processing company by sales, selling beef, chicken, pork and their by-products for use in biodiesel, feed ingredients and personal care and cleaning products.

Cargill invests in Bflike with patent-pending fat platform Global agribusiness giant Cargill has invested in Dutch plant-based meat start-up Bflike, the firms announced on 22 April.

“Global volume consumption of protein is expected to nearly double by 2050," said Belgin Köse, segment director of enrichment & renewability for Cargill Starches, Sweeteners & Texturizers (CSST) Europe.

"Plant-based protein will help fulfill grow8 OFI – MAY 2021

General News May.indd 4

ing consumer desire for more options as part of a balanced diet.”

Bflike's technology includes patent-pending vegan fat and blood platforms which can be used to produce plant-based meat and fish alternative products. Food manufacturers and retailers would be able to license Bflike’s technology and premix ingredients to create their own products, Cargill said.

The Cargill-Bflike collaboration would help customers move from the pilot stage to the commercialisation of their products using their own production process and machinery, the companies said.

CSST’s portfolio includes sweeteners, starches, ethanol, acidulants, proteins, texturisers, corn oil, dry corn ingredients, specialities and animal feed ingredients. www.ofimagazine.com

29/04/2021 12:15:41

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BIOFUEL NEWS BRAZIL: The government has temporarily reduced its biodiesel blending requirement for diesel fuel from 13% to 10% due to strong demand for soyabeans, Reuters reported from a Mines and Energy Ministry statement on 9 April.

About 70% of Brazil’s biodiesel is produced from soyabean oil, with the remainder coming from bovine tallow and other oils, according to the ministry.

Brazil was projecting record soyabean production this season of about 136M tonnes but demand was high and biodiesel prices had skyrocketed recently due to high soyabean prices, Reuters wrote.

Low soya stocks in the USA and growing consumption in China had also led to tight supplies, the ministry statement said.

USA: Corn was the most widely used biofuel feedstock in the USA in January, followed by soyabean oil, according to the US Energy Information Administration.

Corn use totalled 10.5bn kg, followed by soyabean oil at 309M kg, yellow grease at 119M kg, corn oil at 96M kg, tallow at 38M kg, white grease at 24M kg and poultry fat at 15M kg, Biodiesel magazine reported on 31 March.

Production capacity stood at 65.6bn litres for fuel alcohol, 8.7bn litres for biodiesel capacity and 2.9M litres for other biofuels including renewable diesel, renewable heating oil, renewable jet fuel, renewable naphtha and renewable gasoline.

The EIA Petroleum Supply monthly report also showed that refinery and blender net inputs of total renewable fuels stood at 25.5M barrels in January including 23.8M barrels of fuel ethanol and 1.5M barrels of renewable diesel and biodiesel fuel.

10 OFI – MAY 2021

Biofuel news May.indd 2

Total starts bio jet fuel production at two plants French oil giant Total has started producing sustainable aviation fuel (SAF) at its La Mède biorefinery in southern France and its Oudalle facility near Le Havre, the company announced on 8 April.

The biojet fuel, made from used cooking oil (UCO), was expected to be delivered to French airports from April.

From 2024, Total was also expecting to produce SAF at its zero-crude Grandpuits platform, southeast of Paris.

All of Total’s SAF would be made from animal fat, UCO and other waste and residues sourced from the circular economy without the use of

vegetable oils as feedstock, the company said.

New legislation in France calls for aircraft to use at least 1% biojet fuel by 2022, 2% by 2025 and 5% by 2030.

“By producing sustainable aviation fuel at our French sites today, we are able to respond to strong demand from an aviation industry looking to reduce its carbon footprint,” said Total president of refining and chemicals Bernard Pinatel.

Total is involved in a range of initiatives to produce and market SAF in partnership with industry partners and is launching a dedicated renewable fuels business unit in May 2021. Its aim is to achieve net zero emissions by 2050.

Production begins at Eni Gela refinery Italian oil and gas company Eni announced on 19 March that production has started at its Gela biorefinery.

Eni said the plant’s new biomass treatment unit would enable up to 100% of the biomass from used cooking oil, and fats from fish and meat processing to be used in the production of biodiesel, bio-naphtha, bio-LPG and bio-jet fuel.

Following a project to grow castor plants on semi-desert land in Tunisia, castor oil would also be used to feed the Gela biorefinery. Eni added that palm oil would not be used in its production processes from 2023.

Construction of the Gela biorefinery began in early 2020 and the biomass unit completes the project’s second phase.

Eni said it was committed to achieving total decarbonisation of its products and processes by 2050. The company’s 2021-2024 plan provides for the doubling of production capacity at

Photo: Adobe Stock

IN BRIEF

Eni plans to use castor oil from its project in Tunisia as a bio feedstock at its Gela biorefinery

its biorefineries to around 2M tonnes by 2024, and increasing to 5/6M tonnes by 2050.

UK imports of ‘dubious’ UCO could rise UK proposals to increase biofuel blending could lead to a surge in imports of ‘dubious’ used cooking oil (UCO), according to green campaign group Transport & Environment (T&E).

T&E said on 20 April that under the UK Renewable Transport Fuels Obligation, UCO counted double towards national climate targets.

“This means UCO is often traded at a higher price than virgin oil, which increases the risk that virgin oils are fraudulently mixed with imported

UCO. The EU Court of Auditors has said that voluntary schemes cannot guarantee that all the UCO imported into Europe, including the UK, is actually ‘used’.”

T&E UK director Greg Archer said the UK’s increasing thirst for UCO to power transport was 15 times more than could be supplied from British deep fat fryers, leaving the country reliant on imported used oil.

Almost half of the UCO supplied to the UK last year came from China (244M tonnes),

while 49M tonnes came from Malaysia, according to T&E. Archer said the UK should strengthen its verification and monitoring requirements for imported waste oil.

“Otherwise we will end up doing more harm than good.”

UK fossil fuel suppliers are currently required to supply nearly 10% renewable transport fuels, according to T&E, and the Department for Transport is consulting on increasing these targets to nearly 15% by 2032.

www.ofimagazine.com

29/04/2021 14:41:02

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OFI – MAY 2021

11

RENEWABLE NEWS

Clariant in joint venture with India Glycols Swiss speciality chemicals firm Clariant announced on 11 March that it was forming a 51-49% joint venture with India Glycols Ltd (IGL) to manufacture renewable ethylene oxide (EO) derivatives.

India Glycols manufactures green technology-based bulk, speciality and performance chemicals, as well as natural gums, spirits, industrial gases, sugar and nutraceuticals.

IGL said it was the largest producer of green EO in the world through a production process which utilised bio-ethanol. It also manufactures oleochemicals such as fatty acids, fatty alcohols, fatty amines, castor oil

FINLAND: A biopolymer plant is being built in Uusikaupunki this year to pilot the production of compostable bioplastic on an industrial scale, Biofuels Digest reported on 27 March.

The plant, which would use soya molasses as a raw material, was expected to be operational by the end of 2023.

Four companies – FinnFoam, Brightplus Oy, VTT Technical Research Centre of Finland and Nordic Soya – were working on the project.

Nordic Soya already operates a plant in Uusikaupunki which produces soya oil, meal and protein concentrate.

Co-products included lecithin, soya hulls and soya molasses, which were unsuitable for consumption and usually incinerated, the report said.

ness in India, Sri Lanka, Bangladesh and Nepal, as well as a net cash payment to attain a majority 51% stake.

“The joint venture is expected to become a leading supplier of renewable materials to the growing consumer care market in India and neighbouring countries,” Clariant said.

EO is used in the production of other chemicals for a variety of industrial and consumer products, including household cleaners, personal care items and fabrics and textiles. It is also used in the sterilisation of medical equipment, including personal protective equipment.

Goodyear sets out sustainable soya aims US tyre giant Goodyear announced a new sustainable soyabean procurement policy on 18 March to guide farmers, processors and other members of the supply chain to make sound environmental and social decisions related to the growing, harvesting and processing of soyabeans.

The new policy also covers issues such as human rights and land acquisition and use.

With the support of the United Soybean Board, the company has developed a tread compound in which soyabean oil replaces some or all of petroleum-derived oil.

Goodyear said soyabean oil could improve tyre flexibility across temperatures and also provided better grip on road surfaces, making it ideal for its all-weather tyre line.

Photo: Adobe Stock

IN BRIEF

and hydrogenated castor oil ethoxylates.

Under the agreement, which is subject to regulatory approvals, IGL will contribute its renewable Bio-EO derivative business to the joint venture, which includes a multi-purpose production facility including an alkoxylation plant located in Kashipur, Uttarakhand, India.

“To support production, India Glycols has agreed to a long-term supply agreement for ethylene oxide made from bio-ethanol as well as further utilities,” Clariant said.

The Swiss firm would contribute its local industrial and consumer specialties busi-

Goodyear says soyabean oil improves tyre flexibility and grip

It first commercialised soyabean oil tyre innovation in 2017 and said its use of soyabean oil in 2020 increased 73% compared to the previous year. Goodyear’s goal is to

completely replace petroleum oil in its products by 2040.

Its new procurement policy is effective immediately and applies to all soyabean-based materials sourced worldwide.

BASF launches waste/vegetable oil-derived plasticisers German chemical and biotech giant BASF is now offering a range of plasticisers for the polyvinyl chloride (PVC) industry made from organic waste and vegetable oils, the company announced on 15 April.

PVC is one of the most widely used polymers in the world.

BASF’s new biomass-balanced (BMB) plasticisers use bio-naptha or biogas made from organic waste or vegetable oils in place of fossil fuels, the company said.

The company has also launched Hexamoll DINCH Ccycled – a non-phthalate plasticiser based on chemically recycled feedstock – which uses pyrolysis oil from plastic waste 12 OFI – MAY 2021

Renewable news May.indd 2

that is not recycled mechanically, such as mixed household waste or end-of-life tyres.

“The mass balance approach enables us to process renewable and recycled feedstocks together with fossil raw materials in our existing efficient production network and to allocate their share to specific products,” BASF head of marketing plasticisers (Europe, Middle East and Africa) Diana Brunnenkant said.

Plasticisers are used in a range of applications, including films, insulation for cables and ducts, coatings, flooring and hoses. They are also used in the production of toys, medical products, sports and

leisure equipment and food packaging.

The biomass-balanced and chemically recycled feedstock approaches are also being used by BASF to produce renewable styrene in a partnership announced on 29 March with global materials manufacturer Trinseo.

Trinseo had been using the first supplies of renewable styrene from BASF for use in its solution-styrene butadiene rubber (S-SBR) and polystyrene (PS) products, BASF said. S-SBR was supplied to major tyre manufactures while PS products were used in applications such as food packaging and appliances. www.ofimagazine.com

28/04/2021 16:13:24

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OFI – MAY 2021

13

TRANSPORT NEWS RUSSIA: Global agribusiness giant Bunge has sold its Rostov grain terminal in Russia for an undisclosed sum, Latifundist reported on 26 March.

Rostov’s new owners were Marat Shaydaev and Alexey Chemerichko, former managers of Novorossiysk Grain Plant PJSC and United Grain Company, the report said.

The Rostov terminal handled river-sea vessels, with a storage capacity of 42,000 tonnes and a trans-shipment capacity of about 1M tonnes/year.

“Previously, Rostov Grain Terminal was a captive terminal. Currently, we are planning to make the terminal accessible to all market players,” Chemerichko was quoted as saying.

BRAZIL: State-owned oil company Petrobras reportedly cancelled its bunkering operations at the southern port of Rio Grande on 16 April, AgriCensus wrote.

“Unofficial sources say Petrobras suspended bunker deliveries owing to a big contaminated quantity of VLSFO [very low sulphur fuel oil] at their tank storages, and decided to suspend all bunker operations temporarily to test all stocks,” shipping agency Williams was quoted as saying.

This potentially left soyabean-carrying vessels without bunker fuel at the height of the busy export window, AgriCensus said.

SINGAPORE: Singapore-based NYK Bulkship (Asia) announced on 19 March that it had signed a contract with Neste to transport renewable diesel.

In December 2020, NYK Bulkship (Asia) made the first spot contract for the ocean transportation of renewable diesel from Singapore to North America with delivery completed in February 2021.

14 OFI – MAY 2021

Transport news May Gill draft.indd 2

Rival rail bids to form USCanada-Mexico network Less than a month after Canadian Pacific Railway (CP) agreed to buy Kansas City Southern (KCS) railroad for US$29bn to create the first USCanada-Mexico rail network, Canadian National Railway Co (CN) has made a higher offer for KCS of US$33.7bn, World Grain reported on 21 April.

The agreed deal would have created a combined rail company called Canadian Pacific Kansas City (CPKS) that would expand to 32,186km (20,000 miles).

“This deal links origination in production-rich origins that CP has, to new export and domestic consumption markets that we simply just can’t get to today,” CP executive vice president and chief marketing officer John Kenneth Brooks was quoted as saying in a conference call

with investors on 22 March. “It gives our corn, soyabean, wheat, canola and products of meals, oils and ethanol … additional domestic markets.

Producers and shippers gain routes to the Gulf of Mexico and, of course, into Mexico itself.”

However, CN CEO JJ Ruest said a KCS merger with his company would create a network with “broader reach and greater scale”, expanding the total addressable markets by some US$8bn across the Canadian trans-border, the US domestic sector, and the rapidly-growing Mexico-US markets.

The KCS board of directors said it would evaluate CN’s proposal in accordance with the terms of its merger agreement with CP, World Grain reported.

Ever Given refloated in Suez Canal The huge Ever Given container ship blocking the Suez Canal was successfully refloated on 29 March, American Shipper reported.

The 400m long, 200,000 tonne vessel had been blocking one of the world’s biggest trade routes for six days, holding up around US$9.6bn of goods each day and some 320 ships.

However, the ship – which is leased by Taiwanese firm Evergreen Marine Corp – is now being held by the Suez Canal Authority, which is demanding a US$916M fine.

The Suez Canal is the shortest link between Asia (including palm oil producers Malaysia and Indonesia) and

Photo: Adobe Stock

IN BRIEF

The Ever Given was successfully refloated after blocking the Suez Canal for almost a week

Europe. Re-routing vessels around the Cape of Good Hope adds around eight days to journeys, according to the BBC. AgriCensus said the canal

was also important to Black Sea grain or oilseed exporters as it cut the time taken to connect Black Sea ports with the Middle East or Asia.

Greenfield Louisiana to build new terminal Export grain elevator Greenfield Louisiana has filed permits to build a 36-silo grain terminal on the west bank of St John the Baptist Parish, World Grain reported on 8 March.

The terminal would provide storage, processing and elevator operations for soyabeans, wheat and corn, the company said. Greenfield Louisiana’s application for permits followed a request by the Port of South Louisiana (POSL) for US$25M in funding for the port project from the US Department of Transportation (DOT).

If given approval, the POSL would lease the

dock to Greenfield, World Grain wrote.The POSL is the largest grain port in the USA, according to World Grain, handling more than half of annual US grain exports.

Greenfield Louisiana expected to move more than 11M tonnes of agriculture products, primarily soyabeans, corn and wheat, along with some other locally-grown speciality crops, to the export market, World Grain said. Products would be transported mainly by barge on the Mississippi River or the inland waterway system to the new grain elevator. www.ofimagazine.com

29/04/2021 12:47:24

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OFI – MAY 2021

15

BIOTECH NEWS CHINA: German chemical and biotech giant BASF has invested in Chinese biotech start-up Bota Biosciences (Bota Bio), the company announced on 16 March.

Founded in 2019, Bota Bio is an industrial synthetic biotech company, which uses ‘white biotechnology’ or living cells and enzymes to develop and manufacture products for a range of industrial applications including personal care and crop protection.

BASF uses fermentation and biocatalysis to manufacture products such as vitamins and enzymes and is working on processes that use 'white biotechnology' for the production of chemical building blocks from renewable raw materials such as sugar and plant oils.

CANADA: Not-for-profit organisation Protein Industries Canada announced a US$21.7M project on 18 March to produce protein ingredients and oil from locally-grown non-genetically modified (GM) soyabeans that complied with organic and non-GMO labelling standards.

Canada Protein Ingredients would commit about US$15.9M to the partnership, with Protein Industries Canada providing the remaining US$5.8M. Canada Protein Ingredients would begin production once a site for a new processing facility in Canada was chosen and construction completed. The 25,000 tonnes/year plant would have the potential to increase capacity and expand to other crops.

Semences Prograin would develop new non-GM soyabean varieties for Canada’s growing conditions. DJ Hendrick International and Agrocorp Processing would assist in developing, testing and marketing the new products internationally.

16 OFI – MAY 2021

Biotech news May.indd 2

Bayer will not take case to Supreme Court for appeal German chemical giant Bayer will not appeal a US$20.5M Roundup verdict – the first Roundup cancer lawsuit to proceed to trial – at the Supreme Court, The Recorder reported on 19 March.

The decision would end the litigation brought against Bayer subsidiary Monsanto by Dewayne Johnson, who had alleged in 2018 that exposure to certain glyphosate-based herbicides, including Roundup, had caused his non-Hodgkin lymphoma. Bayer inherited the lawsuit following its 2018 takeover of global agrochemical firm Monsanto for US$63bn. It has since faced a a wave of US cancer lawsuits involving Roundup.

Bayer said the Johnson case was not suitable for Supreme Court review because the judgement had been issued by an intermediate-level state court and the portion dealing with whether federal law pre-empted the state’s duty to warn

theory had not been published, which meant it would have no bearing on any case besides Johnson’s, The Recorder wrote.

Glyphosate is the world’s most widely used herbicide and Roundup is used in combination with Bayer’s genetically modified seeds, including soyabeans and corn.

In February, Bayer posted a sharp loss of US$12.8bn in 2020 compared with a net profit of just over US$4.82bn in the previous year.

The company had reached a US$9.6bn settlement in June 2020 covering around 90,000 US lawsuits and is continuing to negotiate to reach agreements in the remainder of cases.

Bayer also announced a US$2bn fund in February to resolve future Roundup cases and the company was awaiting court approval of its new offer, The Jakarta Post wrote.

Battle for dominance of US soya market German chemical giant Bayer is launching a new genetically modified soyabean in the USA in a bid to retain its dominance over rival Corteva, Reuters reported on 9 April.

Bayer’s new XtendFlex and Corteva’s Enlist E3 soyabeans were set to be the most popular varieties in coming years, the report said.

Bayer's XtendFlex soyabean is resistant to dicamba, glyphosate and glufosinate, and received EU authorisation for food, feed, import and processing last September, paving the way for its full launch this year. The company's previous top seller, Xtend, offered resistance to dicamba and glyphosate only.

In 2019, Corteva challenged Monsanto’s two decades-long dominance of the US market by launching Enlist on a small scale. Enlist E3 is resistant to glyphosate and glufosinate, as

Photo: United Soybean Board

IN BRIEF

The USA is projected to plant around 36M ha of soyabeans this year

well as the new 2,4-D choline herbicide.

Corteva said it expected Enlist would account for about 30% of US soyabean plantings this year, an area of around 10.5M ha, and around half of North America's plantings eventually.

Bayer declined to estimate Xtend soya plantings, which-

plateaued at around 20.2M ha last year, Reuters said.

A third player, BASF, was also distributing a new soyabean brand, Xitavo, Reuters said. Xitavo was genetically modified to tolerate glyphosate, glufosinate and 2,4-D choline and would cover just a few hundred thousand hectares in its first year.

BASF plans new insecticide launch in Asia-Pacific German chemical and biotech giant BASF announced in January that it expects to start selling a new insecticide in Australia and Korea by 2023.

Future sales of the Axalion product were also planned in the EU, Brazil, India and other countries, said BASF, which currently supplies the oils

and fats market with Credenz and LibertyLink soyabean varieties, as well as InVigor canola hybrids, along with crop protection products.

Pending regulatory approvals, Axalion would be registered for use in a range of crops including soyabeans, cereals and potatoes. www.ofimagazine.com

29/04/2021 14:45:52

DIARY OF EVENTS New course on CBD oil processing Smart Short Courses will be holding its second technical programme on the processing, extraction and refining of cannabidiol (CBD) oil from hemp on 21-23 September 2021.

“This online practical short course is presented as a crash course for product development, application and formulation, integrated with market and regulatory status,” the organisers said. “It offers a great opportunity for those who are experienced to meet experts in the field and discuss their current problems to enhance their plant operations.

“The course material will serve as a useful reference for processors, product formulators, chemists and technicians as well as business managers familiar with market understanding, functionality communication and marketing of CBD oil and its products in food and dietary supplements.”

View the programme at http://www.smartshortcourses.com/CBDoil2/CBDoil.html 26-28 May 2021

13-15 July 2021

Grain & Maritime Days in Odessa Odessa, Ukraine www.apk-inform.com/en/conferences/ grainmaritime2021/about

Biodiesel & Renewable Diesel Summit Iowa Event Center, Iowa, USA http://2021.fuelethanolworkshop.com/ Biodiesel.html

8-9 June 2021

14-16 July 2021

International Grains Virtual Conference (IGC) 2021 (Online) www.igc.int/en/conference/ confhome.aspx

18th Global Oleochem Summit Qingdao, Shandong, China https://mp.weixin.qq.com/s/ feFn86DNEoQF4n4gw445hQ

9-10 June 2021

1-4 August 2021

Oleofuels 2021 Marseille, France www.wplgroup.com/aci/event/oleofuels

Edible Oil/Products Processing Course College Station, Texas, USA https://fatsandoilsrnd.com/ annual-courses/

10-11 June 2021 Mineral Oil Contaminants in Food Berlin, Germany https://veranstaltungen.gdch.de/tms/ frontend/index.cfm?l=10614 14-16 June 2021 Algal Biomass, Biofuels & Bioproducts (AlgalBBB) Online 2021 (Online) www.elsevier.com/events/conferences/ international-conference-on-algalbiomass-biofuels-and-bioproducts 15-16 June 2021 OFIC 2021 Hotel Istana, Kuala Lumpur, Malaysia http://mosta.org.my/events/ofic-2021

For a full events list, visit: www.ofimagazine.com Information subject to change www.ofimagazine.com

Diary May with promo.indd 1

5-6 October 2021 Future of Biofuels 2021 Copenhagen, Denmark https://fortesmedia.com/future-ofbiofuels-2021,4,en,2,1,13.html 5-7 October 2021 Palmex Indonesia 2021 Medan, Indonesia http://palmoilexpo.com 5-7 October 2021 Plant Protein Science & Technology Forum Chicago, USA https://plantprotein.aocs.org/attend/ save-the-date-for-2021 18-21 October 2021 EuroFed Lipid Congress and 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 Greensboro, Georgia, USA https://nara.org/about-us/events/ 19-20 October 2021 Biofuels International Conference & Expo Brussels, Belgium www.biofuels-news.com/conference/ biofuels/biofuels_index_2020.php 2-4 November 2021

8th High Oleic Congress (Online) http://higholeicmarket.com/hoc-2019

World Ethanol & Biofuels Brussels, Belgium https://informaconnect.com/worldethanol-biofuels/

21-23 September 2021

8-10 November 2021

Processing of Cannabis/Hemp Plants and Refining of CBD Oil: Market, Regulations and Applications (Online) www.smartshortcourses.com/CBDoil2/ CBDoil.html

AOCS Australasian Section Meeting Newcastle, Australia www.aocs.org/attend-meetings/ industry-events

2-3 September 2021

22-23 September 2021

9-10 November 2021

Future of Surfactants North America Boston, Massachusetts, USA www.wplgroup.com/aci/event/ surfactants-summit-america

5th International Symposium ‘Dietary Fat and Health’ Frankfurt, Germany https://veranstaltungen.gdch.de/tms/ frontend/index.cfm?l=9072

23-25 September 2021

17-20 January 2022

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

National Biodiesel Conference & Expo Las Vegas, USA https://www.nbb.org/ OFI – MAY 2021

17

05/05/2021 16:49:51

RUSSIA/UKRAINE

Photo: Adobe Stock

The Black Sea countries of Ukraine and Russia have significantly increased their sunflower oil production and exports in the last 10 years. In order to ensure the export quality of this oil, safety parameters on pesticides, PAH, residual solvents and mineral oil contamination must be met Arina Korchmaryova Sunflower oil is one of the world’s most popular edible oils and is widely used for direct food use and cooking purposes.

The annual volume of global sunflower oil trade has grown steadily in the last two decades, with the Asia region accounting for the greatest increase in sunflower oil consumption.

According to the US Department of Agriculture (USDA), the volume of global sunflower oil exports has doubled in the last 10 years, with the Black Sea countries of Ukraine and Russia increasing their exports dramatically (see Figure 1, p20).

In 2019/2020, global sunflower oil exports hit a high of 13.1M tonnes 18 OFI – MAY 2021

Russia.Ukraine sun oil with island ad.indd 2

Quality risks in sunflower oil against 6.5M tonnes in 2011/2012. Of the 13.1M tonnes of global sunflower oil exports in 2019/2020, Ukraine accounted for 6.7M tonnes and Russia, 3.8M tonnes.

World sunflower oil exports fell to 10.8M tonnes in 2020/21, with Ukraine accounting for 5.5M tonnes and Russia 3M tonnes.

The main driver of the sunflower oil market has been the growth of consumption in China and India.

India, which was not among the top 10 importers 12 years ago, is currently the world’s largest sunflower oil importer, accounting for 24% of global imports, according to the USDA (see Figure 2, p20).

It is followed by the EU (18%), China (15.5%), Iran (8%) and Iraq (5%).

Top producers

The world’s four largest sunflower seed producers are Russia, Ukraine, the EU and Argentina, which account for some 70% of the oilseed’s global volume.

Ukraine is the leading global producer and exporter of sunflower oil, accounting for about a third of the world’s sunflower

oil production and half of global exports.

In 2019/20, Ukraine exported a record 6.7M tonnes of sunflower oil, up 10% compared to the previous season. This volume included almost 6M tonnes of crude oil and 0.7M tonnes of refined oil.

Russia has been increasing sunflower oil production for the past few years with a growth in planted area, development of its processing industry, and better utilisation of crushing capacities.

In the last few growing seasons, competition between Ukraine and Russia has intensified as the countries’ exports grow at a record pace.

Russian sunflower oil is cheaper than Ukrainian oil, helping the country strengthen its position in the Indian and Chinese markets.

Sunflower seed quality

The quality of sunflower seeds defines the quality of sunflower oil, and the standard of oilseed is heavily influenced by weather factors.

Last year’s low harvest, for example, was the result of unfavourable weather www.ofimagazine.com

29/04/2021 14:53:36

RUSSIA/UKRAINE conditions, primarily in southern Russia.

A dry spring there was followed by a dry summer, which caused significant damage to sunflowers.

In the southern regions of Ukraine, sunflower plants suffered from heat and a lack of moisture, with yields decreasing dramatically and crops left unharvested in some fields. In central regions, sharp changes in day and night time temperatures led to excess moisture and a wide range of phytopathogenic fungi.

However, although sunflower seed yields varied from region to region, as well as from farm to farm, quality indicators remained stable.

This can be attributed to producers purchasing high-quality seeding material.

In addition, the Russian government also provides subsidies to regional research institutes to develop new high-productive hybrids that will assist farmers with improving yields and producing stable quality crops.

current limit for chlorpirifos in sunflower oil (maximum 0.01ppm) is the same as the new universal limit applied to all types of cargoes effective from 13 November 2020.

Therefore, when it comes to exporting sunflower oil to the European market, shipments should be closely monitored.

Inspection firm Cotecna, for example, regularly encounters situations where the content of some pesticides in sunflower oil samples exceeds maximum allowable limits.

While pesticide residues can be eliminated from crude oil during the

refining process, meal contamination poses a more substantial problem.

In crude sunflower oil, the list of the most frequently detected pesticides, which Cotecna would classify as risky, are: • Chlorpyrifos (detected in 42% of cases, of which 24% are in excess of EU regulations) • Metalaxyl (detected in 20% of cases, of which 16% are in excess of EU regulations) • Thiamethoxam (detected in 5% of cases, of which 3.8% are in excess of EU regulations)

u

Black Sea sunflower oil

In terms of sunflower oil quality, Ukrainian and Russian sunflower oil show relatively stable quality indicators from season to season.

Changes in sunflower oil quality usually relate not only to the quality of the sunflower seed crop, but also to the processing plant and the equipment and technology used.

Historically, Russian crude sunflower oil has a darker colour and a higher content of sediments and phosphorous compared with Ukrainian oil. In Ukraine, the safety parameters for crude sunflower oil are under more careful control.

Export requirements

Sunflower oil exporters must meet specific quality and safety requirements in their contracts, as well as adhere to the legislation of importing countries.

European countries, along with China, Sudan and Iran, have the widest list of requirements for sunflower oil quality and safety. Parameters requiring special attention are sediments, phosphorous, residual solvents and benzo(a)pyrene.

In terms of safety parameters, the key risk areas are: 1: Pesticides used in the field and/or in warehouses Residual quantities of pesticides should be carefully watched. The EU recently tightened limits for chlorpirifos and chlorpirifos-methyl for all types of agricultural products.

This may attract specific attention to this safety parameter even though the www.ofimagazine.com

page 19 NEW.indd 3

OFI – MAY 2021

19

29/04/2021 16:04:45

Figure 1: Global, Ukrainian and Russian sunflower oil exports (million tonnes)

Source: USDA

Figure 2: Main global importers of sunflower oil, 2020/21 (forecast)

Source: USDA

RUSSIA/UKRAINE

u In general, the pesticides which Cotecna detects remain the same from year to year, with minor percentage variations in how much they exceed EU regulations.

Unfortunately, the content of residual amounts of pesticides in crude sunflower oil has not changed or decreased in Ukraine.

The widespread use of readily-available chemicals that are very effective in pest control, violations in application patterns and relatively high limits in Ukrainian regulations mean that the ability to control the level of pesticide residues in exported products is limited.

The presence of residual amounts of pesticides in sunflowers of Russian origin has remained at a low and stable level in recent years.

2: Benzo(a)pyrene Benzo(a)pyrene is a polyaromatic hydrocarbon (PAHs) which has been classified as a Group 1 carcinogen by the International Agency for Research on Cancer.

It is formed as a result of incomplete combustion of organic matter at temperatures between 300-600°C and does not decompose, but accumulates 20 OFI – MAY 2021

Russia.Ukraine sun oil with island ad.indd 4

in the human body. PAH contamination of sunflower seed can occur through air pollution, oil contamination or storage of seeds in warehouses with floors made of asphalt.

The most dangerous pollution source is the drying of sunflower seed with solid fuel (smoke gases), in which incomplete combustion products settle on the husk surface. Even if the technological process involves hulling, PAHs can pass on into the oil.

It is worth noting that traditionally, Ukrainian consumers like “fried scented” oil, which does not involve the hulling of seeds. Roasting also takes place at high temperatures.

Unlike Ukrainian sunflower seeds, those of Russian origin are dried using natural gas, which minimises the presence of benzo(a)pyrene both in the kernel itself and in the oil.

3: Residual solvents (hexanes) The content of residual solvents in sunflower oil may exceed recommended limits if there is incomplete removal following the solvent extraction process.

COTECNA also recommends its control during batch preparation.

4: Mineral oils According to the EU vegetable oil and protein meal industry association (FEDIOL) mineral oil hydrocarbons (MOH) are divided into two main types: • Saturated aliphatic hydrocarbons (mineral oil saturated hydrocarbons or MOSH). These correspond to linear and branched alkanes and alkylsubstituted cycloalkanes.

• Aromatic hydrocarbons (mineral oil aromatic hydrocarbons or MOAH).

These basically correspond to alkylsubstituted polyaromatic hydrocarbons.

In 2012, the European Food Safety Authority (EFSA) published an opinion on mineral oil hydrocarbons in food and found that these were present at varying levels in almost all foods.

The EFSA has said there is a potential problem with the background presence of MOSH in foods when using white oils as lubricants in production processes.

The authority also believes that foodborne exposure to MOAH may pose a potential threat due to its specific health risks.

The main potential sources of MOH contamination in the production of vegetable oils and fats are during: • The agricultural stage through leaking of diesel or lubricant from agricultural machinery.

• Seed transport through diesel or grease leaks from vehicles.

• Production through leakage from the mineral oil absorber system (during pressing) or contamination with lubricants (during pressing or during maintenance procedures).

• Oil transport, such as contamination from previous cargoes and leaks from equipment such as pumps.

• Targeted oil falsification.

Preventative measures are recommended and particular attention should be paid to lubricants and special fluids used in presses and refineries.

At all critical lubrication points, lubricants that are suitable for incidental food contact should only be used.

Mineral oil, which is used as a scavenger in the hexane recovery system, must not contain MOAH. In addition, white mineral oils are now included in the list of previous EU cargoes.

As of today, there is no EU legislation regulating the MOSH/MOAH limits in vegetable oils and fats but contractual limits may vary from 2-10 ppm. ● Arina Korchmaryova is vice president of the Baltic, Black and Caspian Seas group at Cotecna Inspection

www.ofimagazine.com

29/04/2021 18:15:43

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PLANT & TECHNOLOGY

Global round-up of projects Oils & Fats International reports on some of the latest projects, technology and process news and developments around the world

Richardson set to double crush capacity at Saskatchewan plant

AUSTRIA: German engineering firm Chemieanlagenbau Chemnitz (CAC) announced on 1 March that it is building a hydrogenated biodiesel or hydrotreated vegetable oil (HVO) plant for Austrian energy company OMV, which is investing about US$234M in the conversion of the plant in Schwechat.

CAC said the plant could not only use vegetable oil as a feedstock, but waste products such as used cooking oil.

“With this process, the HVO should lead to an annual reduction in OMV’s carbon footprint of up to 360,000 tonnes of fossil CO₂,” CAC said.

OMV operates three refineries in Europe and expects demand for hydrogenated biofuels to increase ten-fold by 2030.

Photo: Adobe Stock

IN BRIEF

Canola production in Western Canada has grown rapidly

Leading Canadian agribusiness and canola handler Richardson International is doubling production capacity at its Yorkton canola plant in Saskatchewan to 2.2M tonnes, the company announced on 22 March.

The company said the project would also involve the modernisation of the plant.

Once complete, the Yorkton facility will include a high-speed shipping system and three receiving lanes.

“The global outlook for Canadian canola oil is promising, and this latest investment emphasises our ongoing commitment to best in class facilities,” said Darrell Sobkow, Richardson International senior vice president, processing, food and ingredients.

“Yorkton lies right in the heart of canola country and we are focused on providing our

producer customers with increasingly efficient means for meeting the needs of a growing global consumptive market.”

Canola production has grown rapidly in Western Canada, according to a Reuters report on 22 March, with prices increasing as global demand for oilseeds soars.

Increased demand for renewable diesel in North America had also boosted interest in canola oil as a feedstock, the Reuters report said.

The company said construction would begin immediately and was expected to be completed in early 2024 without any disruption to operations.

Winnipeg-based Richardson International is a worldwide handler and merchandiser of all major Canadian-grown grains and oilseeds.

Marathon Petroleum to proceed with Martinez conversion plan US refiner Marathon Petroleum announced on 2 March that it is going ahead with plans to convert its Martinez refinery in California into a renewable fuels facility.

At full capacity, the plant would produce approximately 2.7bn litres/year (730M gallons) of renewable fuels – mainly renewable diesel from feedstocks such as animal fat, soyabean oil and corn oil.

The plan was approved on 2 March by the Marathon Petroleum Corporation (MPC) board of directors.

2 OFI 2018 22 OFI––MONTH MAY 2021

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“Converting the Martinez refinery to a renewable fuels facility is an important addition to our growing portfolio of renewables projects,” said MPC president and CEO Michael J Hennigan.

The facility is expected to start producing renewable diesel in 2022 and reach full capacity in 2023.

MPC estimates the conversion of the Martinez facility from petroleum refining to renewable diesel production will reduce the plant’s greenhouse gas emissions by 60%.

The Martinez conversion is in line with MPC’s commitment to reduce greenhouse gas intensity (emissions per barrel of oil equivalent processed) 30% below 2014 levels by 2030.

MPC had decided to repurpose the Martinez facility into a renewable diesel plant after closing it down in April 2020 due to low demand for refined product during the COVID-19 lockdown, according to a report by S&P Global Platts on 2 February. www.ofimagazine.com www.ofimagazine.com

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PLANT & TECHNOLOGY

Covenant Energy to produce renewable diesel Canadian green fuel company Covenant Energy is planning to build a renewable diesel processing plant in Saskatchewan, the company announced on 18 March.

The 6,500 barrels/day facility is expected to start production in the second half of 2023 following necessary approvals.

Covenant said its facility was targeting canola oil as its main feedstock but would

also have the capability of processing other vegetable oils such as soyabean and camelina oils.

Fuels produced would include renewable diesel, arctic-grade renewable diesel, and sustainable aviation fuel (SAF).

“Covenant Energy is eager to be a part of attaining Canada’s environmental sustainability and net-zero commitments in a way that will stimulate the Saskatchewan

economy,” said Covenant Energy president and CEO Josh Gustafson.

“We are also excited to explore partnership with the oil and gas industry through fuel blending to bring longevity and diversity to a region that traditionally produces other fossil fuels.”

The company said the plant’s design would allow it to double production capacity at a later date.

Toyo and Velocys in fuel partnership

Photo: Adobe Stock Toyo Engineering and Velocys have agreed to develop sustainable aviation and other renewable fuels in Japan

Japanese Toyo Engineering Corporation (Toyo) and sustainable fuel technology company Velocys have signed an agreement to produce sustainable aviation fuel (SAF) and other renewable fuels in Japan, the companies announced on 8 February.

The agreement follows work between the two companies in 2020 at a biomass-to-jet fuel demonstration facility in Japan, which included the construction and delivery of Velocys’ Fischer-Tropsch (FT)

technology.

As part of the collaboration, the companies will work together on a commercial scale biomass-to-jet fuel project in Japan and Velocys will grant exclusive rights to Toyo for the use of its FT technology at the plant.

“Making our first steps into commercial delivery in the Japanese market strengthens our position in an additional geography to North America and Europe,” said Velocys CEO Henrik Wareborn.

The agreement will also include the supply of the Velocys FT technology in other SAF, e-fuels and biomass-toliquids projects in the Japanese market.

This will be led by Toyo, with other partners. Subsequent SAF, e-fuels and other renewable fuel projects will be delivered

by Toyo and their partners, potentially in Japan and other regions, with Velocys providing technical engineering and operational services around the FT technology.

Cargill to build new canola plant in Regina Global agribusiness giant Cargill announced on 22 April that is planning to build a new canola processing facility in Regina, Saskatchewan, Canada.

The company said it expected to begin construction on the US$350M project, which would have a similar design to its existing Camrose facility, early next year with plans to be operational by early 2024. The new facility will have a production capacity of 1M tonnes/year.

Cargill is also updating and modernising its two canola crushing facilities in Camrose, 24 OFI – MAY 2021

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Alberta, and Clavet, Saskatchewan, over the next year to increase volume and broaden capabilities at both locations.

“We are confident in the continued growth and competitiveness of the canola processing industry and look forward to helping farmers access increasing market demand,” said Cargill Canada president Jeff Vassart.

Cargill said the Regina, Camrose and Clavet projects built on its work to modernise and expand capacity across its North American oilseeds network.

IN BRIEF SOUTH AMERICA: US processing technology company Cavitation Technologies (CVAT) has received an order for its nano reactor system from a biodiesel refinery in South America, the company announced on 1 March.

The sale was completed

by CVAT’s strategic partner Desmet Ballestra Group and is the second nano biodiesel system to go to South America.

CVAT’s biodiesel nano reactor can handle a variety of feedstocks such as soyabean oil, canola oil, palm oil and tallow.

The company designs and manufactures flow-through devices and systems, as well as developing processing technologies for use in edible oil refining, renewable fuel production, water treatment and alcohol production.

OMAN: Omani biodiesel project developer Wakud International has begun construction of its waste to biofuel plant at Khazaen Economic City, the Oman Observer reported on 15 March.

The project will be run as a joint venture with UK renewable fuel company Green Fuels, the report said.

Wakud had signed an industrial lease agreement with Khazaen in June 2020 for the plant, which was expected to be operational by this June, the Oman Observer wrote. www.ofimagazine.com

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PLANT & TECHNOLOGY HUNGARY: Hungarian oil and gas company MOL Group announced on 16 March that it had started biofuel production at its Danube refinery.

Feedstock, such as vegetable oils, used cooking oil (UCO) and animal fats would be co-processed with fossil components at the plant to make more sustainable fuel, the company said, adding that it planned to gradually increase the share of waste and residue raw materials in the process.

“MOL Group has been a biofuel producer by purchasing more than 500,000 tonnes of biofuels for blending. With this investment, we have started to produce sustainable diesel for the first time within the group,” said MOL Group downstream executive vice president Gabriel Szabó.

MOL said it was planning to spend US$1bn on new, low carbon and sustainable businesses in the next five years. The company also planned to produce more than 100,000 tonnes of biofuel by 2030 as part of its Shape Tomorrow MOL Group 2030+ strategy.

USA: Agribusiness giant Cargill has entered into a 50/50 joint venture with the family-owned Love’s group of companies to produce renewable diesel, the companies announced on 20 April.

The Heartwell Renewables joint venture will include the construction of a new production plant in Hastings, Nebraska, and will produce approximately 3bn litres/ year) of renewable diesel, according to the companies.

The project would involve Cargill providing tallow as feedstock while Love’s commodity trading and logistics arm, Musket, would transport and market the product in the USA. The plant is scheduled to begin operations in spring 2023.

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Phillips 66 secures soya oil with investment in facility Global energy company Phillips 66 announced on 20 April that it had secured feedstock for its renewable fuels projects following its investment in a new soyabean processing plant in Iowa.

The company’s investment gives it a minority ownership stake in Shell Rock Soy Processing, which will produce approximately 4,000 barrels/ day of soyabean oil, and more than 900,000 tonnes/year of soyabean meal and hulls for livestock feed. Phillips 66 is aiming for a start date of December 2022, pending approvals.

The company said it had agreed to purchase 100% of the plant’s soyabean oil production for use in its renewable fuels.

The investment in Iowa follows the company’s

plans – announced last year – to convert its Rodeo Refinery in California into a renewable fuels facility, which would produce up to 2.4bn litres/year of renewable transportation fuels from used cooking oils, fats, greases and vegetable oils and other feedstocks.

Phillips 66 said it had chosen Australian engineering company Worley to carry out the revamp.

The project would be completed in early 2024, subject to permits and approvals.

Phillips 66 produces petrochemicals and natural gas liquids and is active in the refining, midstream, chemicals and marketing and specialities sectors, according to its website.

Cargill to up soya production in Fayetteville Leading agribusiness Cargill is planning to invest US$25M to increase production at its soyabean processing plant in Fayetteville, North Carolina, World Grain reported on 22 April.

The project is set to begin before the end of 2021, according to the report.

Cargill had operated the soyabean processing plant on River Road outside Fayetteville since 1970, World Grain said.

“Our plant in Cumberland County is an important link in the supply chain for North Carolina farmers and livestock producers,” Cargill agricultural supply chain North America vice president Don Camden said.

As well as expanding in North Carolina, Cargill had made an earlier announcement that it would be expanding its US soya processing operations with a US$475M investment to modernise and develop crushing facilities in seven states, the report said.

Photo: Pixabay

IN BRIEF

Cargill is expanding its US soya processing operations

The improvements would include faster unloading of oilseeds and loading of products, increased capacity, and better overall logistics and safety, World Grain wrote.

Tidewater to use Topsøe technology at plant Canadian oil and natural gas company Tidewater Midstream and Infrastructure has chosen renewable diesel technology from Danish catalysis firm Haldor Topsøe for its proposed new plant, the companies announced on 15 April.

The proposed new facility at the site of the company’s existing Prince George refinery in British Columbia, Canada would produce around 3,000 barrels/day of renewable diesel.

Construction work was due to begin shortly – dependent on Tidewater’s final investment decision – with the facility expected to be commissioned as early as 2023 – the firms said.

The total project cost was estimated at

US$215M-US$235M. Tidewater said the facility would be a standalone renewables complex focused on 100% renewable feedstock and would include a pretreatment facility to give it the flexibility to use a range of renewable feedstocks.

Further plans for the plant included a canola co-processing and a fluid catalytic cracking project which would produce renewable diesel and renewable gasoline with a carbon intensity of approximately 80-90% less than conventional fuels, the company said.

Topsøe would deliver engineering, license, proprietary equipment and catalysts for its HydroFlex and H2bridge technologies. www.ofimagazine.com

29/04/2021 15:09:05

SPREADS

Photo: Wildbrine

Plant-based butter’s share of the spreads market is rising as consumers increasingly focus on health and the environment. What is behind the growth and what ingredients are used to provide a butter flavour without using any dairy ingredients?

Ile Kauppila

www.ofimagazine.com

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Plant butters on the ascent Butter’s reputation among consumers has been something of a roller coaster. Once reviled as a source of bad cholesterol, new scientific reviews have brought on a semirenaissance for dairy butter in the last decade. Despite this, butter alternatives continue to grow in popularity.

Margarine, a butter-like product produced from plant oils, was originally marketed as a healthier alternative to butter. However, the presence of trans fats and high saturated fat content – particularly in earlier margarine products – tarnished margarine’s name as well.

Although product development has found ways to mitigate these issues, the word “margarine” still carries the baggage of its past.

Now, a new challenger is rising in the field of dairy butter alternatives. Plantbased butters – or plant butters – are popping up in dairy aisles in increasing numbers, and their market share is growing. Good Food Institute data shows plant butter sales in the USA grew 15% in only two years between 2017-2019,

reaching a value of US$198M. Chris Glab, co-founder of Californiabased fermented foods producer Wildbrine and its WildCREAMERY plant-based creamery, tells Oils & Fats International that he expects the growth to continue. According to him, we are seeing a “sustained, long-term trend to healthy, plant-based food alternatives.”

That category also includes plant butters. Like the plants its oils are sourced from, the plant butter market is rooted in good soil and is growing stronger.

Plant butter or margarine?

Some people – many consumers included – have questioned whether there is any meaningful difference between products labelled as ‘margarine’ and ‘plant butter’.

Indeed, the two spreads appear similar at a glance. Both are dairy butter alternatives based on a variety of plant oils and fats.

However, a deeper look at the ingredients reveals subtle but significant differences.

“For me, the main difference is that u the new plant butters use real, whole, OFI – MAY 2021

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rine

u

SPREADS developed their own methods to tackle this issue. Wildbrine, for example, has based its method on the company’s previous experience in producing fermented vegetable food, such as sauerkraut.

“We developed a proprietary plantbased culture to flavour our dairyalternative products. We utilise the very same lactobacillus fermentation to deliver that distinctive cultured dairy-like taste, but produced from a fermentation of whole plant ingredients,” says Glab.

Photo: Adobe Stock

Shifting consumer preferences

The COVID pandemic has led to an increase in home cooking and demand for grocery-purchased foods, with consumers paying more attention to the health and environmental impact of food

u minimally processed ingredients,” explains Glab. “Many margarines, and particularly the original margarines that pioneered the category, used cheaper ingredients that were refined and highly processed, along with other artificial functional ingredients to assist in cost reduction or extended shelf life.”

Glab says that among the ingredients in some margarines are hydrogenated fats, sodium benzoate, potassium sorbate and mono- and diglycerides. Some of them, say both Glab and health information service Healthline, even include dairybased ingredients – the product that margarine is supposed to replace. They can also contain soyabean oil or soya lecithin, which is a relatively common allergen.

The ghost of trans fats also still hangs over even modern margarines. The hydrogenation processes used to produce some margarines can create trans fats, which the American Heart Association has linked to heart disease and stroke.

“Many of the newer plant-based butters use oils that are considered better for you; oils that are not hydrogenated,” says Glab.

Considering the ingredients

When it comes to picking the ingredients, plant butter producers have a plethora of options available. The plant butter market is divided into several segments based on the main ingredient. In nut butters, almonds and cashews are the leading raw materials, notes Fior Markets. Coconut 28 OFI – MAY 2021

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oil-based butters can also be placed into this category.

In vegetable oil-based products, Expert Market Research data shows that olive, canola, palm and avocado oils are popular ingredients. Finally, in the plant milk category, soya milk leads the way with some 40% market share, says Future Market Insights (FMI). Other popular plant milks include oat, rice, corn, pea, flax and hemp.

The choice of the main ingredient for plant butter production, according to Glab, comes down to three main considerations.

A functional raw material must: 1. Be minimally processed and towards the top of the list of healthiest oils and fats.

2. Have high performance that mimics the functional properties of butter.

3. Have a neutral taste that does not overpower the intended buttery flavour of the product.

Glab stresses the importance of the main ingredient’s flavour profile. He says that formulating new plant butters is technically “fairly straightforward,” but the challenge arises with the product’s taste.

“The real challenge is getting the flavour right,” explains Glab. “That dairy taste comes from lactobacillus-based fermentation of milk. How do you get that fermented dairy taste without using any dairy?”

Each plant butter producer has

Plant butters, and other plant-based dairy and meat alternatives, were considered exclusively vegan products for a long time.

As such, the market was limited in scope, as most omnivores stuck to either butter or old-fashioned margarine. However, according to both Glab and several market research companies, this landscape is changing fast.

One of the driving causes behind the expansion of the plant butter market is consumers’ increasing focus on health.

As mentioned, butter and margarine still carry some of their old stigma, and consumers see plant butters as a healthier replacement. Medical research supports this view somewhat; a report by health awareness group Switch4Good, for example, shows that a tablespoon of butter contributes roughly 30% of the daily recommended saturated fat intake for a 2,000 calorie diet.

“While some people are switching to plant-based butters for health reasons, the trend is driven by more than just health.

It has taken on expanded participation to include flexitarians who may eat some animal-derived foods,” Glab notes.

As such, plant butters are in general no longer perceived as strictly vegan products.

Glab also believes that no food product has escaped the effects of the ongoing COVID-19 pandemic, and plant butter is no exception. However, in this case, the pandemic may have been a boon. Due to government lockdowns in many parts of the world, people have increasingly resorted to home cooking. Together with this shift, they have begun paying more attention to what goes into their food.

“The pandemic has given consumers more time to research foods and the various impacts of the food they purchase and consume – on health, on the environment, on other living inhabitants of the planet. The pandemic has generally increased the demand on all grocerypurchased foods. As COVID-19 has accelerated many broad trends, it has

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05/05/2021 08:43:37

SPREADS definitely also accelerated the sustained, long-term trend to healthy, plant-based food alternatives,” says Glab.

Concerns over animal welfare and the environment have further fuelled interest in plant butters. While some plant butter raw materials, like soya, are produced through industrial agriculture methods, Glab notes that, in general, the use of non-processed plant oils minimises plant butters’ environmental impact. Wildbrine and other plant butter producers also strive to use every part of the plant, either in food production or to fuel their factories.

A fast-growing market

Plant butters do appear to have a promising future ahead. Fior Market Research states that in 2018, the global plant butter market stood at US$1.23bn and was poised to reach US$1.77bn by 2026. However, this projection came before the pandemic hit, and reality has proven it to be too cautious. According to FMI, the market had already reached a total value of US$2.4bn in 2020. By 2030, it could be worth as much as US$5.1bn.

What every market research organisation does agree on is that steady growth will continue. Their expectations vary, but generally they predict the global plant butter market to see an annual CAGR of just short of 5%. Based on data from Market Research Future, this growth will rival or even surpass that of dairy butter, which is projected to see a CAGR of 4.52%.

This growth will be strongest in North America, driven partially by increasing numbers of people identifying as vegan.

Between 2014-2017, the number of vegan consumers in the USA grew from 1% of the population to 6%. Behind North America, Europe is the second largest market base, followed by Asia Pacific. Key market players include Conagra Brands Inc, ForA: Butter, I Can’t Believe It’s Not Butter, Miyoko’s, Naturli Foods AS, WayFare Foods, and Wildbrine.

The market is characterised by a high number of both mergers and acquisitions and new product launches, alongside players exiting the segment – for example, Califia Farms told Oils & Fats International that it was discontinuing its plant butter products.

Is it ‘butter’?

Another boost for plant butter came in August 2020 in the USA. That was when producers finally received some clarity on a question that has haunted the market for a long time: can plant butters be called ‘butter’? www.ofimagazine.com

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Sweet spreads market expected to grow Plant butters aren’t the only spreads that are undergoing interesting developments.

The sweet spreads market – including products such as peanut butter, jams, and chocolate spreads – is seeing a boost in certain segments. Other products in this category, however, are not necessarily doing so well.

In general, the sweet spreads market is growing, although not quite at the pace of plant butters. Market analysts agree the sector will see a CAGR of somewhere between 3-4% over the next five years.

Future Market Insights (FMI) projects Chocolate spreads are the leading product North America to dominate the market, in the sweet spreads market, which is seeing with Asia Pacific to follow. Europe, Latin growth Photo: Pixabay America, Africa, and the Middle East will see moderate growth up to 2030. The biggest challenge the market faces is raw material supply. Cocoa, sugar and fruits are all currently fetching high prices, notes IMARC Group.

But while plant butters are driven by health concerns, more indulgent options are thriving in sweet spreads. Transparency Market Research puts chocolate spreads as the leading category, while The Grocer notes that jams and peanut butter are also seeing increased value sales. Products that fall in the middle of the healthy-indulgent axis are struggling; sales of yeast spreads, such as Marmite and honey have fallen.

Intense product development and experimentation is a characteristic of the sweet spreads sector. Producers are launching new spreads to keep consumers interested, and the trick seems to be working. Increasing consumption of sweet spreads among older age groups is boosting the market, says 360 Market Updates.

Another defining trait of the market is its high fragmentation. Some of the big players include Conagra Brands, Ferrero Group, JM Smucker Co, Kraft Heinz and Unilever, but none of them dominates. Competition is fierce, which is further fuelling the drive towards new products.

For producers, the sweet spreads segment is currently challenging. Consumers, though, can look forward to new, tasty products to spread on their morning toast.

Miyoko’s Creamery, a California-based plant butter producer, received positive news at a US district court when Judge Richard Seeborg ruled against a complaint by the California Department of Food and Agriculture, which claimed that Miyoko’s was misleading consumers by labelling its products as ‘vegan butter’.

According to the court, it was not misleading for Miyoko’s to call its product ‘butter’ if the word was preceded by a qualifier such as ‘vegan’ or ‘plant-based’.

The court also ruled that it was acceptable to call the butters ‘lactose-free’ and ‘cruelty-free’.

However, Seeborg did not allow Miyoko’s to call its butters ‘hormone-free’ due to the fact that plants contain their own hormones and, as such, the claim was misleading.

Additionally, the slogan ‘revolutionising dairy with plants’ was not approved as Seeborg ruled that there was no “direct interaction” between dairy and plant butter, and therefore plant butter could

not reasonably “revolutionise” its dairy equivalent.

In the future, however, plant and dairy butters might move closer together, according to Glab. He sees the products as moving towards collaboration, if all players in the market are willing to do so.

That may very well be, considering facts such as the 30% butter deficit in France and the resulting tripling of butter prices to €7,000/tonne, as highlighted by FMI. “The next generation of plant-based butters will bring together a collaboration between traditional dairy, food science, and – maybe the most important element – real-food culinary arts, supported by food science,” Glab says.

The dairy and plant butter segments could eventually merge into one simple ‘butter’ market. But for the time being, plant butter is expected to take up an increasing amount of space in the dairy aisle. ● Ile Kauppila is a former assistant editor of Oils & Fats International OFI – MAY 2021

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05/05/2021 08:43:39

COMMODITY TRADING The rapid expansion of renewable diesel production has been accompanied by a growth in services designed to deliver price transparency and trading confidence in this emerging sector Gill Langham A combination of climate change concerns and new environmental legislation is driving interest in renewable fuels and associated feedstocks, with international markets for these products developing at an exponential rate.

Global renewable diesel supply is set to exceed 11bn litres (3bn gallons) in 2023 and 19bn litres (5bn gallons) by 2025, according to forecasts by commodity and energy price provider S&P Global Platts Analytics. The company – a division of S&P Global – also expects renewable diesel or hydrotreated vegetable oil (HVO) production in the USA to grow 470% over the next five years.

In Asia, S&P Global Platts forecasts annual HVO production for road transport to exceed 1.8M tonnes by 2025 and 2.6M tonnes by 2030, up from 930,000 tonnes in 2020.

Meanwhile, European HVO demand is expected to increase to more than 3M tonnes for road transport in 2030, up from 2M tonnes in 2020, with the majority of the production made from waste and residues. At the same time, HVO capacity is set to almost quadruple globally over the same period.

Boosting the sector is new legislation, such as the European Union (EU) Renewable Energy Directive (RED), which caps the use of high-risk indirect land use change (ILUC) biofuels at 2019 levels until 2023 and will phase them out by 2030.

The changing regulatory landscape in Europe has prompted increased trading interest around renewables, according to Owain Johnson, managing director and global head of research and product development at global derivatives and commodities exchange CME Group.

“This is happening at quite a fast pace in Europe but other regions such as the USA are catching up fast. Renewable diesel plants in the US are expanding rapidly and, with the existing capacity in Europe, there is expected to be a growing pull on the associated feedstocks,” he said.

“Waste oils such as used cooking oils (UCO) have come into sharper focus with the advent of RED II and blending 30 OFI – MAY 2021

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Transparency mandates - as covered by Annexe B of the regulations for waste oils - are expected to increase further over the 2021 to 2030 period.”

These markets would continue to develop as environmental regulations tightened and targets for cutting emissions increased, said Josefine Ahlstrom, vice president of business development at global commodity news and price reporting agency Argus Media.

“Europe, the USA and Brazil have led the way in terms of bringing renewables into the road transport fuel pool but large parts of Asia are following fast,” she said.

Despite the sector’s rapid growth, Sophie Byron, associate pricing director (Agriculture Americas) for S&P Global Platts, said that because HVO and sustainable aviation fuel (SAF) prices were higher than their petroleum counterparts, these new markets would be curtailed without government support and policy investment.

New products

S&P Global Platts and Argus Media have both launched a number of new services directed at providing price transparency in this market. CME Group has also launched

products for commodity trading within the sector.

“There is a real need to add some clarity and definition to these developing markets,” said Byron.

As commodities were often traded bilaterally between buyer and seller – sometimes through a broker – rather than publicly, Ahlstrom said there was a need for accurate information.

“An accurate and visible price is vital in all markets. In one which is developing so quickly and in such a diverse manner as the renewable fuels market, it is perhaps even more essential.

“Most biodiesel, as with many other commodities, is traded on a term contract where a buyer and seller agree a longterm supply deal, rather than having to negotiate a series of ad hoc transactions.

It is common for the price to be linked to that provided by a trusted source,” she added.

S&P Global Platts’ latest product for the renewables sector was its Asia-based price assessments, which it launched in January.

The new Platts Southeast Asia SAF and Platts Southeast Asia HVO, as well as a UCO price assessment in Asia called UCO North Asia, followed the company’s

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COMMODITY TRADING

Photo: Adobe Stock

As the renewables sector is still fairly new and evolving fast, there is a thirst for information to increase trading transparency and confidence

ncy tools launch of its Northwest European SAF and HVO assessments and its SAF and HVO values for the US West Coast last year.

S&P Global Platts’ HVO values for Europe comprise daily assessments – published in US dollars/tonne – of the cost of HVO produced from UCO on an ex-refinery basis in Northwest Europe.

The daily Platts Americas renewable diesel values (known as Platts US West Coast RD) reflect the cost of producing renewable diesel from tallow via hydroprocessing.

Last year, Argus Media also launched renewable diesel and sustainable aviation fuel (SAF) prices in Asia and price assessments for renewable diesel in Europe.

Adding clarity

The term ‘assessments’ was not quite accurate when referring to S&P Global Platts’ renewable diesel and SAF fuel prices, Byron explained.

“Unlike our jet fuel prices assessments, which reflect the tradable market value as determined by buyers and sellers in the open market, the renewable distillate values represent the cost of production www.ofimagazine.com

Commodity Trading draft GL.indd 3

via hydro-processing.”

The S&P Global Analytics and pricing team work together to develop the price tools based on existing Platts assessments and taking into account other fixed costs.

The renewable distillate prices are published using feedstock prices such as tallow in the USA and UCO in Europe and Asia and the Platts hydrogen prices, adding to the relevant refinery fixed costs, then deducting the byproducts of propane, naphtha and in the case of SAF, diesel.

Since S&P Global Platts started publishing its renewable diesel and SAF price assessments, interest had been high, Byron said.

As the majority of SAF and renewable diesel supply was being delivered by long-term agreements between producer and retail supplier or consumer, the price values could be used as a reference price within these agreements, she added. They could also be used within analytics and project planning.

“Traditionally, the value of SAF and renewable diesel could be very opaque, in part due to the numerous different feedstocks and production methods.

The Platts published price values add transparency to these markets where there is a very limited spot market,” Byron said.

“As cost-based values, the renewable diesel and SAF prices do not represent a spot physical market. These markets are still relatively nascent. As production grows over the coming years, this will start to change with the renewable diesel market the one that will see a more transparent and tradable market develop first.”

Argus Media said a wide range of companies and organisations used its price assessments, which could be used in term contracts or spot transactions.

“We speak to a wide range of buyers and sellers and other market participants to ensure all views are represented. We also look at deals done, and bids and offers,” said Ahlstrom.

“Our job is to come up with an independent, accurate and reliable price that reflects the market conditions of that day.”

Meanwhile, in September 2020, CME Group announced the first trade of its Used Cooking Oil Methyl Ester (UCOME) futures contracts in Europe.

“In terms of renewable fuels, CME has four contracts based on UCO and UCOME. In addition, the company has listed futures contracts in a number of low carbon products in other regions such as the California Low Carbon Fuel Standard (LCFS) and the Renewable Identification Number (RIN).”

At the time of going to press, the company was also due to launch the Global Emissions Offset (GEO) futures and was looking at other carbon-based products where customer demand allows.

“Our expectation is that with the energy transition gathering pace, other products in this sector are likely to emerge,” added Johnson.

The UCO based futures contracts are all cash settled against the indices for UCO imports into Europe provided by price benchmarking agency PRIMA. The UCOME futures are all cash settled against the Argus Media assessments for European UCOME biodiesel. CME said the contracts helped to inform the market about current prices for the listed products as settlement prices for the futures contracts that had open interest were published on the exchange and were available daily on the company website.

“The trading interest so far has come from the commercial client base which is very typical for products like these.

The commercial firms are the most likely to want to hedge directly to manage price risk exposure to the underlying commodity price,” Johnson explained.

Future markets

As markets evolve, Argus Media is expecting to launch new price assessments for new feedstocks and renewable fuels.

“There is a great deal of innovation in this sector which means that new types of renewable fuels and feedstocks are continually being developed,” Ahlstrom said. “The biofuels market is quite liquid in terms of deals done. Europe is the most mature market but as other regions develop, we expect to see more trade there.”

S&P Global Platts’ Byron said the company had no immediate plans for new launches but was always tracking markets as they developed and anticipated expansion in other geographical regions.  Gill Langham is the assistant editor of OFI

OFI – MAY 2021

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29/04/2021 15:18:00

STATISTICS STATISTICAL NEWS

USDA FAS

Soyabean and palm oil export prices

IGC, Agrarmarkt Informations-Gesellschaft (mbH)

Soyabean and palm oil export prices

Soyabean oil prices spiked in March driven by tight vegetable oil supplies and expectations of higher demand for soyabean oil for biofuel use, according to the United States Department of Agriculture (USDA) Foreign Agricultural Service April 2021 Oilseeds World Markets and Trade report. US soyabean export prices rose in March, approaching seven-year highs as continued late-season exports further tightened stocks. Brazil prices fell slightly due to expectations of seasonally large new crops and higher exportable supplies. Argentina prices fell as rains provided much needed moisture and slowed crop losses in droughthit regions. Palm oil prices rose slightly on strong March exports, tracking rival oils, the report added.

Global rapeseed supply and demand

3,000

500

2,700

400

2,400

300

2,100

200

1,800

100

1,500

0

1,200

-100 Jan-15

900 Jan-19 Jan-20 Jan-21 Average Premium MPOB Stocks

Jan-16 Jan-17 Jan-18 EU CPO Premium over Brent

POC Conference, EU CPO price premium over Brent crudeMarch oil2021

© 2021 LMC International. All rights reserved.

Prices of selected oils (US$/tonne)

Mintec

Nov 20

Dec 20

Jan 21

Feb 21

Soyabean

946.9

1,001.7

1,053.2

Crude palm

855.6

918.4

915.9

Palm olein

Mar 21

Apr 21

1,075.1

1,220.0

1,358.2

974.0

1,045.5

987.2

811.8

873.6

875.1

911.6

985.5

913.5

1,396.2

1,491.5

1,458.2

1,435.0

1,528.0

1,564.0

Rapeseed

988.0

1,040.0

1,092.5

1,131.5

1,218.2

1,329.0

Sunflower

1,117.7

1,185.1

1,298.5

1,385.9

1,637.6

1,585.2

Palm kernel

1,104.9

1,246.5

1,345.2

1,335.7

1,432.2

1,430.4

Average

1,032.0

1,108.0

1,148.0

1,178.0

1,296.0

1,310.0

244.0

263.0

272.0

279.0

307.0

310.0

Coconut

Index

32 OFI – MAY 2021

Stats May.indd 1

LMC International, Virtual POC March 2021

600

MPOB palm oil stocks, '000 tonnes

EU CPO premium vs Brent, US$/tonne

The International Grains Council (ICG) has forecast that the world’s four largest rapeseed producers – Canada, the EU, China and India – will harvest 72.8M tonnes of rapeseed in the 2021/22 crop year compared with 70.4M tonnes in 2020/21. The IGC outlook is based on a 2% increase in planted area and yield increases, according to the Union for the Promotion of Oil and Protein Plants (UFOP). Global rapeseed consumption is forecast to fall Stocks should recover slowly, cutting the CPO-Brent spreadslightly to 72.9M tonnes in 2021/22 due to strong demand in Asia and Europe. Prospects for a bounceback in In 2016 and 2017 biodiesel use reacted to a widening CPO-Brent premium. This time, it did not, global rapeseed supply in 2021/22 appeared to be poor Global rapeseed supply and demand (million tonnes) and La Niña caused stocks to plunge, pushing the premium through the roof. Looking ahead, in light of expected low stocks and moderate growth in Indonesian growth will raise stocks slowly, lowering the premium gradually to more normal levels. production. Ending stocks for 2021/22 were forecast at . the previous year’s level of 3.6M tonnes.

3,300 700

EU CPO price premium vs Brent crude oil

The EU crude palm oil (CPO) price premium vs Brent crude oil hit highs in January as the La Niña weather phenomenum pulled vegetable oil supply below expectations and caused stocks to plunge, LMC International chairman James Fry told the Virtual Price Outlook Conference (POC) in March. Looking ahead, Indonesian palm oil production growth would raise stocks slowly, lowering the premium gradually to more normal levels, he said.

The International Grains Council is an intergovernmental organisation focused on international cooperation in grains trade.

8

The Union for the Promotion of Oil and Protein Plants represents companies and associations involved in the production, processing and marketing of oil and protein plants in Germany.

LMC International, UK is an independent consulting firm specialising in global agricultural commodities and agribusiness.

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

Tel: +44 (0)1628 851313 E-mail: sales@mintecglobal.com Website: www.mintecglobal.com

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29/04/2021 18:01:54