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MEDIA PARTNER

OILS & FATS INTERNATIONAL SEPT/OCT 2019 â–ª VOL 35 NO 7

WWW.OFIMAGAZINE.COM

INDUSTRY 4.0

Revolution in palm oil

RENDERING

Demand for US fats growing Cover sept.indd 1

04/09/2019 10:18:04


www.desmetballestra.com

Science behind Technology


CONTENTS

OILS & FATS INTERNATIONAL

IN THIS ISSUE – SEPT/OCT 2019

FEATURES Used Cooking Oil

Show preview

35

Countdown to PIPOC 2019

NEWS & EVENTS

The biennial PIPOC Palm Oil Congress and Exhibition will be held in Kuala Lumpur, Malaysia from 19-21 November

Instrumentation

18

EU imports grow Used cooking oil is increasingly utilised in the EU to produce biodiesel. To meet growing demand, EU imports of this feedstock from China, Indonesia and Malaysia are growing, raising concerns about their quality and traceability

Plant, Equipment & Technology

26

Global projects round-up

The latest projects, technology and processing news around the world

Comment

36

Global round-up OFI reports on some of the latest instrumentation news and developments around the world

Rendering

4

Trade war escalates with new US, China tariff hikes

Biofuel News

EU slaps duties on Indonesian biodiesel

Renewable News

12

Revolution in palm oil The palm oil industry has gone through different stages of industrial revolution. What is the next step to ensure sustainability and efficiency, and how can Industry 4.0 be utilised in this journey?

Amazon on fire

News

10

Industry 4.0

30

3

L’Oreal praised in report for sustainable palm oil sourcing

Transport News

40

Demand for US fats growing Increased demand for fat as a biodiesel and renewable feedstock is utilising the larger supply of US rendered products

14

Van den Bosch signs bulk liquid South African deal

Biotech News

15

Bayer cancels plans for new crop chemical

Diary of Events

16

International events listing

Statistics

44

www.ofimagazine.com

Contents.indd 1

Statistical data from Mintec and UFOP

OFI – SEPTEMBER/OCTOBER 2019

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02/09/2019 14:44:35


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EDITOR'S COMMENT

OILS & FATS INTERNATIONAL

VOL 35 NO 7 SEPTEMBER/ OCTOBER 2019

EDITORIAL: Editor: Serena Lim serenalim@quartzltd.com +44 (0)1737 855066 Assistant Editor: Gabriel Day gabrielday@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: Steve Diprose stevediprose@quartzltd.com +44 (0)1737 855164 SUBSCRIPTIONS: Elizabeth Barford subscriptions@quartzltd.com +44 (0)1737 855028 Subscriptions, Quartz House, 20 Clarendon Road, Redhill, Surrey RH1 1QX, UK © 2019, 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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Amazon on fire

The thousands of fires ripping across the Amazon in Brazil have focused attention, once again, on deforestation. The 7.4Mkm2 Amazon basin – which spans Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname and Venezuela – includes 5.5Mkm2 or just over half of the world’s rainforest.

Brazil accounts for 60% of the Amazon rainforest and an unprecedented 87,000 fires have occurred so far in the country this year – half of them in the Amazon. Forest fires are common in the Amazon during the dry season from July to October but many believe this year’s fires have been started by farmers and loggers clearing land for crops or grazing, encouraged by President Jair Bolsonar’s pledges to open up the region to more development. However, while Brazil has had 76% more fires this year than in 2018, the country had more fire activity in the 2000s; 2005 was the worst year with more than 142,000 fires recorded in its first eight months. The following year in 2006, public outrage over Amazon deforestation from soya production prompted multinationals such as Bunge, Cargill and Brazil’s Amaggi to sign the voluntary Amazon Soy Moratorium (ASM). In the pact, 90% of companies in the Brazilian soya market agreed not to buy soya grown on land deforested after 2006 within the Amazon biome. The ASM was made permanent in 2016 and can be described as a success. A 2014 study found that in the two years before the agreement, nearly 30% of soya expansion in the Amazon biome occurred through deforestation. After the moratorium, direct deforestation from soya fell to only 1%. Critics would say that there was already so much deforested land in the Amazon in 2006 that there was plenty of room for soya expansion without cutting forest and that the success of the ASM has come at the cost of Cerrado region, which I discussed in our previous issue’s Comment (see OFI, July/August 2019). Unlike the Amazon, where almost half of the area is under some sort of conservation protection, only 13% of the Cerrado is protected. And under Brazil’s Forest Code, 80% of the native vegetation on private lands in the Amazon biome must be conserved, compared with 20% in the Cerrado. That is why a Cerrado Manifesto was created in 2017. While more than 70 companies have signed it, including large food companies and supermarkets such as Kellogg’s, Mars, McDonald’s, Nestlé, Unilever and Walmart, experts say the initiative is unlikely to be successful without large commodities firms like ADM, Bunge and Cargill. However, in June, Cargill published an open letter to its Brazilian soya producers stating that it did not “support a Cerrado moratorium that simply cuts off farmers for exercising their legal land rights. We do support working alongside our industry to consider short term actions that would support farmers ... as the wider industry considers how to provide longer term solutions”. The Amazon fires are a crisis. But more than that, it focuses attention on what is happening in other forests and ecosystems, such as the Cerrado, and across the world. “The risk is that we are moving towards the tipping points that scientists talk about that could produce cascading collapses of natural systems,” says Cristiana Pasca Palmer, the executive secretary of the UN Convention on Biological Diversity. Money is not enough to address the issue. “Even if the amount involved in extinguishing fires in rainforests was a billion dollars, we won’t see an improvement unless more profound structural changes take place,” she says. “This is not just about biodiversity conservation. It’s about finance and trade and changing the model of development. We need a transformation in the way we consume and produce.” Serena Lim – serenalim@quartzltd.com

www.ofimagazine.com

Comment.indd 1

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NEWS IN BRIEF USA: Global agribusiness giant Bunge has announced that it is moving its global headquarters from White Plains, New York to St Louis, Missouri. “While St Louis is already an important hub for Bunge and our current North American operations, the city is also home to a number of food, agriculture, animal health and plant science organisations and customers,” said Bunge CEO Gregory Heckman. Bunge said on 13 August that it expected the relocation to be completed by the end of second quarter 2020. The group was founded in the Netherlands in 1818, expanding into Argentina in 1884 and beginning trading in North America in 1918, according to World Grain.

Trade war escalates with new US, China tariff hikes The ongoing trade war between China and USA escalated on 23 August when US President Donald Trump announced tariff hikes on effectively all Chinese imports into the USA. The USA would begin the process of raising 25% tariffs on around US$250bn worth of Chinese imports to 30% from 1 October, following a notice and comment period, the United States Trade Representative (USTR) office said. Fresh tariffs on an additional US$300bn of Chinese goods, announced earlier on 1 August, would now be at a rate of 15% instead of 10%. The first batch of those tariffs would be introduced in September, the USTR added. The US moves follow China’s announcement on 23 August that it would hit US soyabeans and other imports worth US$75bn with new tariffs and hikes to existing duties. The tariffs of 5-10% would apply to 5,078 items, starting on 1 September and 15 December, AFP reported. China’s commerce ministry said it would hit US frozen lobster, frozen chicken feet, peanut butter

and 914 other goods with new 10% punitive tariffs starting on 1 September. Soyabeans, crude oil and other energy goods faced 5% tariffs. The ministry had earlier announced on 5 August that China would stop buying US agriculture products in response to Trump's 1 August announcement that he would impose 10% tariffs on US$300bn worth of Chinese imports. To date, China's purchase of US soyabeans have only been half of the 20M tonnes it had pledged to buy earlier this year, according to Reuters. So far, only 9-10M tonnes had been shipped and accepted. A report released on 22 August by CoBank cooperative bank said the total export value of US soyabeans for 2018/19 was down nearly 50%. "With a record crop out of South America and declining demand due to African swine fever in China, the USA is unlikely to gain back significant export sales in the coming years," CoBank said. The ongoing US-China trade war over the past year has seen both countries impose billions of dollars worth of tariffs on each other’s goods.

Italian producers at risk from US tariffs on EU olive oil imports Italian olive oil producers could lose up to US$200M/year if US tariffs on EU olive oil imports are approved, the Italian Association of the Olive Oil Industry (Assitol) warns. Assitol president Anna Cane said Italian exports to the USA could fall by as much as 50% if the World Trade Organization (WTO) approved the proposed tariffs, Olive Oil Times reported on 17 July. Italy is one of the largest suppliers of olive oil to the USA, exporting 94,000 tonnes to the country in 2018, according to Assitol. This represented 31% of the USA’s total olive oil imports and more than 50% of Italy’s olive oil exports.

Olive Oil Times wrote that the USA had kept olive oil on an updated list of punitive tariffs it planned to impose on the EU in relation to a dispute over the trading bloc’s subsidies for European aerospace corporation Airbus. The WTO was due to make a decision later this summer on whether to approve some or all of the proposed tariffs. Cane said that if a 100% tax on EU olive oil was imposed, the price of extra virgin olive oil would double for US consumers. The USA imported more than 95% of the olive oil it consumed in 2018/19, 65% of which came from the EU, Olive Oil Times said.

UK investment firm AgDevCo invests in Dekel Oil in Côte d'Ivoire UK investment firm AgDevCo has invested US$9.75M in DekelOil, a large-scale palm oil producer in Côte d'Ivoire. AgDevCo said on 12 August that its investment would consist of a 10-year €7.2M (US$8M) secured loan to DekelOil Cote d’Ivoire and a €1.5M (US$1.68M) equity investment in its parent company DekelOil Public, in exchange for a 9.7% stake. “Our investment will be used to strengthen DekelOil’s balance sheet through the refinancing of short and medium-term debt 4 OFI – SEPTEMBER/OCTOBER 2019

General News.indd 2

facilities, thereby freeing up cashflow for working capital and growth initiatives; and finance DekelOil’s Environmental, Social and Governance activities,” AgDevCo said. More specifically, the financing would support the completion of DekelOil’s Roundtable for Sustainable Palm Oil (RSPO) certification and implement a traceability programme which would ensure the fruit was ethically and sustainably sourced from smallholder growers. UK agribusiness DekelOil said it had the

capacity to produce 70,000 tonnes/year of crude palm oil (CPO), making it one of the West Africa’s largest palm oil producers. The company had an oil palm nursery with a capacity of 1M plants/year, supply agreements covering 27,000ha of local oil palm estates, 1,886ha of plantations and a 60 tonne/hour fresh fruit bunch processing mill. The company also had rights over 24,000ha of expansion land, which would be used to provide additional feedstock for crude palm oil production, it said. www.ofimagazine.com

04/09/2019 10:20:53


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NEWS

Sime Darby partners ADVOC in MENA Sime Darby Oils (SDO) and Abu Dhabi Vegetable Oil Company (ADVOC) have announced a partnership to market oils and fats products in the Middle East North Africa (MENA) region. The companies said on 19 August that they would operate in the region as a single sales and marketing team, focusing on basic and speciality fats (including bakery fats, shortening, industrial margarines, spread fats, dairy replacers, confectionery fats and cocoa butter substitutes and replacers). “The teams are working closely to set up

IN BRIEF USA: Biotech company Benson Hill Biosystems has entered a partnership with seed breeder Brownseed Genetics to offer new corn hybrids that are higher in both oil content and essential amino acids. “The new Brownseed hybrids yield about 9% corn oil – nearly triple the normal production – and are rich in lysine and methionine amino acids,” Benson Hill said on 30 July. Developed through conventional breeding, the hybrids had enjoyed steady growth in the livestock industry and the company was now targeting the corn-to-ethanol industry with its E+ hybrid, Brownseed said. THAILAND: The cabinet has approved a US$1.1bn budget to set guaranteed prices for palm oil and rice, earmarking US$438M for 300,000 oil palm farmers registered with the Agriculture and Cooperatives Ministry, the Nation Thailand reported on 27 August. The guaranteed price was Bt4/kg (US$0.13) of product containing 18% of oil per kg. It was based on the market average of Bt3/ kg (US$0.10) plus Bt0.25 (US$0.01) for transportation costs, allowing a Bt0.75 (US$0.03) price spread. 6 OFI – SEPTEMBER/OCTOBER 2019

General News.indd 3

the operations, structure, portfolio, marketing, route-to-consumer strategies, licensing and other operational matters,” said Nirman Shetty, ADVOC director. “The MENA region is a key growth market for SDO,” said Mohd Haris Mohd Arshad, SDO’s managing director. “Partnering with ADVOC enables us to establish an on-the-ground presence through enhanced local market knowledge and capabilities, and open up opportunities for sustainable products and supply chains” UAE-based ADVOC supplies edible oils and fats in the MENA region with brands

including Coroli, LiteLife and Sarola. It operates an edible oil refinery and fractionation plant in Abu Dhabi. SDO is a subsidiary of Sime Darby Plantations (SDP), one of the world’s largest oil palm planatation companies with an oil palm planted area of more than 600,000ha. SDO represents the downstream operations of SDP, involving the manufacturing, sale and marketing of oils and fats products, palm oil-based biodiesel, nutraceuticals and other derivatives. It manages 11 refineries with a total capacity of 3.8M tonnes/year.

Nestlé to use OpenSC blockchain technology

Swiss multinational food and drink giant Nestlé will be using the OpenSC blockchain platform to allow customers to track their food back to the farm. “Through this collaboration with OpenSC, Nestlé becomes the first major food and beverage company to announce that it will pilot

open blockchain technology in this way,” the company said on 2 July. “The initial pilot programme will trace milk from farms and producers in New Zealand to Nestlé factories and warehouses in the Middle East. Later, the technology will be tested using palm oil sourced in the Americas. These pilots will allow Nestlé to understand how scalable the system is.” Nestlé had piloted blockchain technology since 2017, most prominently with IBM Food Trust, the company said. In April, it worked with French retailer Carrefour to give consumers access to traceability data for its Mousline purée. “This open blockchain technology will allow anyone, anywhere in the world to assess our sourcing facts and figures,” said Benjamin Ware, Nestlé’s global head of responsible sourcing. “We believe it is another important step towards the full disclosure of our supply chains announced by Nestlé in February this year.” Open SC is a supply chain tool founded by World Wildlife Fund-Australia and US venture capital firm The Boston Consulting Group Digital Ventures.

IOC recommends safe level for 3-MCPDs in olive oil

The International Olive Council (IOC) has informed the EU that the threshold for safely consuming the potentially carcinogenic process contaminant 3-monochloropropane diol ester (3-MCPDE) in olive oil is 1.25mg/kg. The IOC wrote in its June newsletter that the EU was in the process of revising safety standards on the tolerable intake of 3-MCPDEs. There were two proposed levels for vegetable oils and fats and fish oils for the final

consumer – 1.25mg/kg or 2.5mg/kg – as some oils and fats showed lower or higher levels of 3-MCPDEs. There had been a risk of olive oils being included in the 2.5mg/kg group because the EU did not have enough data for olive oils, the IOC said. The council submitted data providing information on different grades of olive oils and olive pomace oils, which allowed its executive secretariat to give its recommendation to the EU.

“In particular, the data showed that virgin olive oils do not contain any quantifiable amount of 3-MCPDEs, thanks to the absence of the refining process,” the IOC said. The refining of edible oils at 2000C or higher can produce 3-MCPDEs. Studies have shown that 3-MCPDEs are non-genotoxic carcinogens (chemicals capable of producing cancer not related to direct gene damage) with effects on the kidney and male reproductive organs.

www.ofimagazine.com

04/09/2019 10:20:59


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NEWS IN BRIEF FRANCE: French agro-industrial group Avril and Dutch science firm Royal DSM plan to work together to produce a non-genetically modified protein-based canola. DSM said on 8 July that the canola had a high nutritional value and balanced taste profile, making it ideal for a range of applications such as meat and dairy alternatives, beverages, baked products, bars and ready-to-mix. “More people are opting for flexitarian, vegetarian and vegan diets for personal, health and environmental reasons,” said DSM chief innovation officer Trish Malarkey. The two companies planned to develop a production facility fully dedicated to canola proteins at Avril’s Saipol facility in Dieppe, France. DSM said the ingredient could be available commercially as early as the end of 2021. EU: The EU's soyabean area has tripled over the past 10 years to reach almost 1M ha this year, according to information published by the EU Commission. Estimates for the EU-28 2019 soyabean planted area were 991,730ha, compared with 955,290ha in 2018, a rise of 4%. Most soyabeans were grown in Italy, Germany’s Union for the Promotion of Oil and Protein Plants (UFOP) said on 16 July. “The country accounts for just less than a third of the total EU soya area. The second largest soyabean producer is Romania, with 173,000ha dedicated to soyabean cultivation. Germany has recorded a 25% increase in area [in 2019] from the previous year to 30,000ha." Croatia, where soyabeans were produced on 85,000ha, saw the second largest increase, of 10.3%, UFOP said. Hungary recorded a 6,000ha decrease in area. 8 OFI – SEPTEMBER/OCTOBER 2019

General News.indd 4

Volcanic eruption impacts palm oil production in PNG Two volcanic eruptions and a heavier than usual rainy reason will lead to a 19% fall in palm and palm kernel oil production in Papua New Guinea for Belgian agribusiness firm Sipef. An eruption at Mount Ulawun volcano on 26 June had led to the immediate evacuation of 7,000 people and covered 50% of Sipef’s oil palms (on more than 6,500ha) with a 3-5cm layer of ash and small stones, affecting the July harvest, the company said on 5 August. A second eruption occurred on 3 August at the same volcano. “The immediate effects of the second eruption were comparable to the first one in June,” Sipef said. “More than 5,000 people were evacuated out of the Navo production area to safer places near the Barema mill and estates.”

Sipef said although no permanent asset losses were recorded requiring reconstruction or replanting, it was not possible to harvest on 3,150 planted hectares (about 23%) during most of July and its Navo mill was temporarily closed. “At the Navo plantation, 950ha out of the most affected areas will require up to two years of recovery before producing bunches at normal yield again,” Sipef said. Sipef added that its Hargy Oil Palms estate had already experienced a worse than usual rainy season in the first semester of 2019. Combined with the two eruptions, it was projecting a fall of some 19% in palm and palm kernel oil production for this year, compared with 2018, representing a pre-tax loss of some US$14M.

Retailers must remove 'palm oil-free' products Indonesia has told some Jakarta retailers to remove food products with 'palm oil-free' labels from their shops, as the government seeks to protect its key export, Reuters said on 22 August. Palm oil was under scrutiny due to concerns over its environmental impact, and Indonesian exports of the product had slowed, the news agency said. The country's Trade Ministry had conducted inspections at over a dozen supermarkets in Jakarta and goods with 'palm oil-free' labels on their packaging – mostly locally-made foods and snacks – were removed from display, said Ojak Simon Manurung, director of goods and services circulation supervision at the ministry. Manurung told reporters that the ministry conducted the inspections after Indonesia’s Drug and Food Control Agency (BPOM) said 'palm oil-free' labelling did not meet its criteria. BPOM said it would not approve the distri-

Concerns over palm oil's environmental impact have led some retailers to stock 'palm oil-free' goods

bution of products with 'palm oil-free' labels, saying that palm oil was “safe” and the labels were reducing its competitiveness. Earlier this year, Malaysian authorities appealed to retailers to refrain from importing food products with 'no palm oil' or 'palm oilfree' labels, Reuters said.

Ceres acquires Delmar Commodities for US$11.5M

US logistics company Ceres Global has bought Canadian commodity provider Delmar Commodities for approximately CAD$15.25M (US$11.5M) in cash and the assumption of about CAD$7.6M (US$5.8M) in existing term debt, World Grain reported on 19 August. Ceres’ had a total grain and oilseed storage capacity of some 29.7M bushels in North America, the report said. The company's core operations are in grain storage,

procurement and merchandising of speciality grains and oilseeds such as oats, barley, rye, durum wheat, canola and pulses through its storage and handling facilities in Minnesota, Saskatchewan and Ontario, according to its website. It has operations in five locations including three sites in Minnesota. Its Savage Riverport terminal is owned and operated as a joint venture with Consolidated Grain and Barge Co, with 9.2M

bushels of grain storage, highspeed truck and rail receiving capacity, as well as truck and barge shipping capabilities. Ceres’ other two locations are in Northgate, Saskatchewan, Canada; and Port Colborne, Ontario, Canada. Delmar sources, handles and transports grains, oilseeds and oilseed products such as soyabeans, canola, corn, and soyabean oil and meal throughout southern Manitoba and the Prairies. www.ofimagazine.com

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BIOFUEL NEWS

EU slaps duties on Indonesian biodiesel The European Commission (EC) proposed on 23 July preliminary anti-subsidy duties on Indonesian biodiesel ranging from 8-18%. The duties were due to come into force by 6 September at rates of 8% for Ciliandra Perkasa, 15.7% for Wilmar Group, 16.3% for Musim Mas Group and 18% for Permata Group, according to Reuters. The EC said there was evi-

IN BRIEF EU: Mineral oil corporations such as Neste, Eni and Total have ramped up their production of hydrogenated vegetable oil (HVO) in the EU since 2012. EU HVO output was estimated at 2.8bn litres in 2018 and is expected to rise to 3bn litres in 2019, according to Germany’s Union for the Promotion of Oil and Protein Plants (UFOP). Planned production facilities in France and Italy were also expected to boost production to 3.5bn and 4bn litres respectively from 2020 onwards. “These volumes are major factors in making the EU the largest producer of alternative diesel fuels in the world,” UFOP said. The key reason behind the rise in HVO was the EU’s 2015 Indirect Land Use Change (ILUC) regulation, which permitted biofuels from waste oils and fats to be double-counted towards targets for renewable energy in transport, UFOP said on 15 August. BRAZIL: The National Agency for Petroleum, Natural Gas and Biofuels announced on 6 August that it had approved the sale and use of B15 biodiesel and was raising the minimum blend of the fuel from 10% to 11%, from September. 10 OFI – SEPTEMBER/OCTOBER 2019

Biofuel news.indd 2

dence that producers in Indonesia benefited from subsidies in the form of export financing, tax breaks and provision of palm oil at artificially low prices. The measures were provisional, pending the conclusion of the EU investigation, Reuters said. Definitive duties, usually applied for five years at the end of an investigation, would need to be set by 4 January 2020. The EU imposed anti-dump-

ing duties on Argentine and Indonesian biodiesel in 2013 but had to remove most of them in 2017 after losing challenges at the World Trade Organization and the European Court of Justice. Following a European Biodiesel Board request for further investigations, the EC proposed anti-subsidy duties of 2533.4% on Argentine biodiesel but then reached an agreement

with eight of the country’s biodiesel producers in January to allow up to 1.2M tonnes/year of tariff-free Argentine biodiesel imports at a set minimum price. The eight companies that signed up to the agreement were Aceitera General Deheza, Bunge Argentina, LDC Argentina, Molinos Agro, Oleaginosa Moreno Hermanos, Vicentin, Cargill and COFCO International Argentina.

JBS to use pork/poultry fat in biodiesel plant

Brazilian meat processor JBS plans to invest R$180M (US$47.5M) in a new biodiesel facility which will use pork and poultry fat as part of its feedstock. The 900 tonnes/day plant – to be located in

Mafra, Santa Catarina state – would be operated by JBS Biodiesel. The world’s biggest meat processor said on 31 July that the plant would use raw material – including pork and poultry fat – from the production chain of its subsidiary, Seara Alimentos, as feedstock. “The plant will also work closely with the soyabean complex, supplementing its raw material base,” JBS said. “With this new plant, JBS Biodiesel will more than double its capacity and is set to produce over 600M litres/year of biodiesel.” JBS Biodiesel currently operates two other plants in the states of São Paulo and Mato Grosso. “With this third unit, the company will become one of the country’s top 10 top biodiesel producers,” JBS said. “In 2018 alone, we sold 260M litres of biofuel, approximately 25% up on 2017 volumes of 210M litres.”

France introduces restrictions on palm biofuels France has passed a regulation which will ban the use of palm oil in biofuels from 31 December 2019, according to Germany’s Union for the Promotion of Oil and Protein Plants (UFOP). The French regulation ended the eligibility of biofuels – such as palm oil methyl ester and hydrotreated vegetable oil (HVO) – for public funding and would come into force on 1 January 2020, UFOP said on 23 July. It also provided that as of 31 December, operators would no longer be allowed to include palm oil-based biofuels in their mass balances. The provision would affect French oil giant Total, which began producing HVO at its

500,000 tonnes/year La Méde biorefinery in July. UFOP said the French government was implementing changes introduced by the EU’s 2015 Indirect Land Use Change (ILUC) regulation, which set limits on high ILUCrisk biofuels, bioliquids and biomass fuels. The limits affect the amount of these fuels that member states can count when calculating their overall national share of renewables and the share of renewables in transport. Member states will still be able to use (and import) fuels covered by these limits, but they will not be able to include these volumes when calculating the extent to

which they have fulfilled their renewable targets. These limits consist of a freeze at member states’ 2019 levels for the period 2021-2023, which will gradually decrease from the end of 2023 to zero by 2030. “In this sense, France will fulfil its obligation 10 years earlier,” said UFOP. “We welcome the constraint that excludes palm oil from producers’ mass balances, because biofuel feedstocks must be delivered physically rather than being documented on paper.” However, UFOP said it feared there would be shifts in the biofuels market if Total exported palm oil-based HVO to other member states. www.ofimagazine.com

02/09/2019 14:22:55


RENEWABLE NEWS IN BRIEF GERMANY: Oleochemicals supplier Berg+Schmidt reported on 11 July that a wide range of its vegetable oil-based fatty acid esters have been included in the European Commission’s Lubricant Substance Classification List (LuSC List), meeting all the requirements for environmentally-friendly lubricants with the EU Ecolabel. “This step is official confirmation that our base oils conform to the highest environmental standards of the EU. The decisive factor was our high percentage of renewable raw materials in the production process, very good biodegradability, an optimal water hazard class and the low bioaccumulative potential of the substances.” The company said its fatty acid esters were used worldwide as lubricant constituents. “In many environmentally-relevant applications, certification in accordance with the European Ecolabel is an important criterion for the purchase of environmentally-sound lubricants.” A simplified EEL certification procedure meant formulators could use Berg+Schmidt’s registered ester oils, which could be named directly in the EEL application, requiring no further evidence, it added. USA: Huntsman Corporation announced on 7 August that it had agreed to sell its chemical intermediates and surfactants businesses to Thailand’s Indorama Ventures for about US$2.08bn. The deal is expected to close by the end of the year. It will take in Huntsman’s production facilities in parts of Texas, India and Australia. Huntsman supplies anionic, nonionic, cationic, amphoteric and polymeric surfactant products globally. 12 OFI – SEPTEMBER/OCTOBER 2019

Renewable news.indd 2

L’Oreal praised in report for sustainable palm oil sourcing Global beauty giant L’Oréal has been praised for leading the way on the sustainable sourcing of palm oil for its personal care products. A July report by environmental advocate group CDP said 70% of 1,500 companies with a high impact on forests failed to provide data in 2018 on their deforestation impact. The companies were asked to disclose information on four commodities linked to deforestation: timber, palm oil, cattle and soya. Over 350 companies had declined to respond for the last three years (2016-2018), including major brands such as Dominos, Next and global food corporation Mondelez and its palm oil supplier Rimbunan Hijau Group, the CDP said. Of the 306 that reported data, 24% showed no or limited action to reduce deforestation. However, the CDP report said there were some companies leading the way, including L’Oréal. The group has pledged that by the end of 2020, none of its ingredients and raw materials will be linked to deforestation. L’Oréal said it bought less than 370 tonnes/ year of palm oil but consumed the equivalent of 71,000 tonnes of palm oil derivatives and palm kernel oil.

It said that since 2010, 100% of the palm oil it sourced complied with Roundtable on Sustainable Palm Oil (RSPO) standards, following the rigorous segregated model. At the end of 2018, 54% of its palm oil derivatives were Mass Balance purchases, compared to 51% in 2017. The remainder was covered by the RSPO Book and Claim model. To date, it could trace 95% of its derivative volumes back to refineries, 85% back to mills and 25% to plantations. L’Oréal said it used the deforestation risk evaluation tool devised by the NGO, Global Forest Watch, and all its direct suppliers were also assessed in line with the Sustainable Palm Index, which was established in 2016 and made available to all industry players in 2017. “To make further progress, this year, we began developing a new tool to evaluate refineries and crushers on the basis of their policies, procedures and reporting. This tool will be available and shared publically by the end of 2019.” In addition, this year, 98% of the soya oil used by L’Oréal (221 tonnes/year) was sourced from Brazil and certified organic or Identity Preserved. “The soya oil derivatives used by the group are largely sourced from zones classified as posing no risk of deforestation.”

EU imports of Caribbean essential oils rise

Exports of Caribbean essential oils to the EU have grown by 33% in the past year due to rising concern about sustainability and ethics in personal care products, the Caribbean Export Development Agency (Caribbean Export) said on 31 July. Caribbean Export said the natural cosmetics sector was currently growing at an annual rate of 8-10% in the EU, with an increasing demand for natural ingredients, particularly black castor and coconut oils. “In 2018, Caribbean countries (CARICOM) exported essential oils valued at over €32M (US$35.8M) to the EU, which represents 8%

of all imports to the region,” said manager for competitiveness and export promotion at Caribbean Export, Damie Sinanan. “We are seeing this demand increase year by year, in large partly due to greater concern about sustainability and ethics on the part of European consumers. “Companies and consumers want to feel assured that what they are buying is 100% natural oil and that there are no synthetic components.” The Caribbean had its strength in the production of black castor oil, for example, which was distinct from castor oil, Sinanan said. Produced mostly in Jamaica and Haiti, black castor oil was made by roasting, grinding and cooking castor seeds (pictured) to extract a dark brown oil high in vitamin E, minerals, protein and omega 6 and omega 9 fatty acids. Sinanan told Cosmetics Design-Europe on 7 August that growing interest in men’s personal grooming was also driving demand for Carribean essential oils. EU demand was concentrated in Germany, France, Italy, Spain and the UK. In Europe, the cosmetics market is valued at €77bn (US$86bn), making it the largest market in the world, according to Caribbean Export. www.ofimagazine.com

04/09/2019 10:22:32


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TRANSPORT NEWS IN BRIEF FINLAND: Oil and renewable fuel producer Neste is launching a new marine fuel to help shipping companies comply with new low-sulphur global regulations coming into force on 1 January next year. “Neste Marine 0.5, containing 0.5% maximum sulphur, will be introduced to the market during the fourth quarter of 2019,” the company said on 15 August. “By choosing this fuel, shipping companies will have a solution which is easy to switch to, and guarantees immediate compliance with the global sulphur cap.” The United Nation’s International Maritime Organization (IMO) is tightening limits on global sulphur dioxide emissions. On 1 January 2020, the sulphur cap for marine fuels will drop from 3.5% to 0.5% in areas outside current emission control areas (Baltic Sea, North Sea, North America and US Caribbean), where the sulphur limit is 0.1%. Ship owners must either use low-sulphur fuel, install scrubbers on their ships to clean up emissions, or switch to alternative fuels. Neste said its fuel would be produced at its refinery in Porvoo and be available in northwest Europe, with the exact locations released later this year. Neste produces and refines petroleum oil products and is also the world’s largest producer of renewable diesel produced from vegetable oils and wastes such as used cooking oil.

Van den Bosch signs bulk liquid South African deal Global logistics service provider Van den Bosch has signed a partnership agreement with South African freight forwarder STACKS Logistics to further develop its bulk liquid transport activities to and from South Africa. The Dutch group specialises in the transport of liquid and dry bulk for the food and chemical industries, including oils and fats. “The agreement’s focus is specifically on the transport of liquid food products in ISO tank containers,” said Van den Bosch DMCC (Dubai) general manager Bart van de Vorst on 13 August. “The South African market offers huge opportunities with regards to the transport of liquids in bulk as an alternative to traditional drums and intermediate bulk containers (IBCs).” Van den Bosch DMCC was established in Dubai in 2015 with a focus on liquid bulk trans-

port with ISO tank containers and flexitanks in Europe, the Middle East and Africa. At the time the Dubai operations were established, Van den Bosch told OFI that the African continent offered many opportunities in loading edible oils and fats, with volumes between Europe and Africa growing because the company was able to convince customers to ship liquids in ISO tanks instead of in small quantities, offering handling and heating advantages and savings in packaging costs. “Over the past years, Van den Bosch has developed a strong position as a tank operator on the African market,” the company said. “Branches were established in Dubai, Ghana, Ivory Coast and South Africa and, this year, investments were made again in 400 new ISO tank containers.”

Bunge supports ship recycling transparency

Bunge has become the first agribusiness giant to join the global Ship Recycling Transparency Initiative (SRTI), the firm announced in June. The SRTI aims to increase transparency in ship recycling by using an online platform to gather information from ship owners on their recycling practices, allowing cargo owners to make decisions based

on this information. The ship recycling industry – which dismantles old and decommissioned ships – is an important part of the economy in many countries such as such as Bangladesh, India, Pakistan and Turkey, according to a 2016 European Commission (EC) report. However, the vast majority of large vessels were dismantled in poor social

and environmental conditions, with low-paid workers often dismantling ships without protective equipment or heavy machinery, with dozens of fatalities per year. Ship breaking also released materials such as oil, asbestos and toxic paints into the local environment, the EC said. “As a cargo owner and the first agribusiness company to join the SRTI, Bunge can provide valuable insight to shipping companies about our logistics and sustainability needs and expectations,” said Marcio Valentim Moura, director of global logistics for Bunge. Bunge is a world leader in sourcing, processing and supplying oilseed and grain products and ingredients.

Russian state bank VTB acquires 70% stake in trader Mirogroup Russian state-controlled bank VTB reported on 15 August that it had completed its acquisition of a 70% stake in Russian grain and oilseeds trader Mirogroup. Mirogoup buys and exports grains and oilseeds including corn, wheat, barley, rice, linseeds and yellow peas. World Grain said the purchase was the 14 OFI – SEPTEMBER/OCTOBER 2019

Transport news Sept.Oct.indd 2

latest move in VTB’s strategy to become a bigger player in Russia’s grain export business. In June, VTB agreed to buy a controlling interest in railway holding company RusTransCom, one of the largest carriers of agricultural and forest cargo in Russia, with rolling stock units including tanks for vegetable oils, hopper and gondola cars,

and universal platforms. In August last year, VTB acquired a 10.93% stake in Novorossiysk Grain Plant, one of the largest grain terminals in Russia. And in February 2018, it agreed to buy Novorossiysk Grain Terminal, one of the country’s largest port terminals for the transhipment of grains and oilseeds. www.ofimagazine.com

02/09/2019 14:28:44


BIOTECH NEWS

Bayer cancels plans for new crop chemical German pharmaceuticals firm Bayer has decided to scrap plans to widely sell a new US crop protection chemical in 2020 after safety concerns. The NemaStrike product from US agribusiness Monsanto – which Bayer acquired in June 2018 for US$63bn – would not be offered after a limited number of people suffered skin irritation when handling it or seeds treated with the product, Reuters wrote on 30 July. “Bayer has made the decision that NemaStrike Technology will not be offered broadly in 2020 for corn, cotton or soyabeans,” Bayer said. NemaStrike is applied to crop seeds to defend plants from nematodes. The decision has come as Bayer faces lawsuits from 18,400 plaintiffs in the USA

claiming its glyphosate-based Roundup weedkiller allegedly causes non-Hodgkin’s lymphoma. Bayer has already lost three trials and may have to pay billions of dollars in compensation. On 20 August, Bayer announced it was selling its animal health unit for US$7.6bn as it restructures to lower costs and offload assets in an effort to regain investor confidence, the Financial Times reported. The group reported a 49.1% year-onyear fall in net profits to US$450M for second quarter 2019 on 30 July. ▪ Brazilian cotton farmers in Mato Grosso state sued Bayer on 11 July, seeking to overturn the firm’s patent protection for its Bollgard II RR Flex genetically modified (GM) cottonseed, Reuters reported. The farmers were claiming that the GM

USDA approves Verdeca soya

The US Department of Agriculture (USDA) has approved a drought tolerant soyabean developed by US seed developer

Verdeca for commercialisation in the US market. HB4 now had regulatory approval in more than 80% of the global soyabean market, Verdeca said on 8 August. “The trait has already been approved in Argentina and Brazil, with regulatory submissions currently under consideration by Bolivia, China, Paraguay, and Uruguay. Import approval from China is needed for commercial launch in Argentina, and is now expected in 2020.”

seed, which combined insect and weed resistance, did not constitute a de facto technological innovation and were seeking a refund on US$151M worth of royalties they had already paid to use the technology, Reuters wrote. Mato Grosso farmers used a similar argument when they sued to cancel the patent rights of Bayer’s Intacta RR2 PRO GM soyabeans in Brazil. The attorney representing the farmers, Sidney Pereira de Souza, confirmed that they were suing Bayer and Brazil’s national patent office. “If the patent cancellation request is granted, aside from getting the refund, the cotton farmers will save US$240/ha in the coming harvests,” the Mato Grosso Cotton Producers Association said, alluding to the royalties related to the seed.

IN BRIEF USA: Cargill has received approval from the US Department of Agriculture to grow a biotech canola variety in the USA that produces omega-3 fatty acids, which can be used to replace fish oil in aqua feed. Cargill said on 7 August that its Latitude canola was a plant-based alternative to fish oils which could relieve harvesting pressure on wild fish populations.

Scientists urge rethink on GE

European scientists have called on the newly-elected European Parliament and European Commission to rethink current genome editing (GE) rules, a year after the European Court of Justice (ECJ) ruled that plants obtained through the technology should be considered genetically modified organisms (GMOs). An open statement published on 25 July and signed by 126 research institutes argued that EU scientists and plant breeders should be allowed to use GE tools such as CRISPR, as a faster and more efficient way to produce food sustainably. The UK’s John Innes Centre, one of the signatories, said GE allowed scientists and breeders to target specific genes already in a plant species. “This use of GE does not result in the insertion of DNA from other sources. In contrast, GM techniques allow genes from other sources to be inserted into a plant’s genome.” The open statement said the ECJ’s ruling in July 2018 meant that crops with even the smallest GE modification had to conform with GMO provisions, a regulatory threshold too complicated and expensive for research institutes and smaller breeder companies to comply with. This left precision breeding techniques like CRISPR in the hands of a select group of large multinationals to exploit in large cash crops. www.ofimagazine.com

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02/09/2019 14:33:32


DIARY OF EVENTS Seville hosts 17th Euro Fed Lipid Congress

The 17th Euro Fed Lipid Congress and Expo is being held in one of the most colourful cities in Europe – Seville – on 20-23 October. “Since it is being held in 2019, at the dawn of the new decade, the congress has been named ‘Driving Science and Technology to New Horizons’, the organisers say. “We believe that it is time to rethink and replan research into new projects and to identify new knowledge gaps that need to be filled.” Five parallel sessions will be held during the congress covering topics including Processing & Sustainability; Palm Oil; Analytical, Authenticity & Lipidomics; Plant & Synthetic Lipids; Bioscience & Biotechnology; Lipid Oxidation, Deep-frying & Antioxidants; Olive Oil; Speciality Oils, Lipids in Novel Foods & Bioactive 25-26 September 2019

Products; Health & Nutrition; Marine & Algal Lipids; Physical Chemistry; Lipids in Animal Science; and Oleochemistry & Biofuels. A table top exhibition will feature around 25 suppliers of technology and services to the oils and fats industry. The congress will be held at the Barceló Sevilla Renacimiento hotel, built in the style of the Guggenheim Musuem in New York. A scientific tour will be held on 20 October, with a visit to the Instituto de la Grasa labs and facilities and an olive oil tasting session. The congress dinner will be held on 22 October at the Abades Triana restaurant, next to the Guadalquivir River in the popular Triana neighbourhood, serving Andalusian avant-garde cuisine. Seville is one of the most popular destinations in Europe and its habour is the only river port in Spain. Its Old Town contains three UNESCO World Heritage Sites: the Alcázar palace complex, the Seville cathedral and the General Archive of the Indies. Euro Fed Lipid is a federationof 13 oils and fats scientific associations and aims to further lipid science and technology. For further information on the 17th Euro Fed Lipid Congress, visit: www.eurofedlipid.org/pages/sevilla.html

20-23 October 2019

7th Oleochemicals Outlook Singapore www.cmtevents. com/aboutevent. aspx?ev=190923&

17th Euro Fed Lipid Congress Barceló Sevilla Renacimiento Seville, Spain www.eurofedlipid.org/pages/ sevilla.html

25-27 September 2019

23 October 2019

Globoil India 2019 Mumbai, India globoilindia.com/index.html

Oils & Fats Processing, Product Quality Control & Optimization - Analytical Methods Seville, Spain www.smartshortcourses.com/ oilmethods2/program.html

5-11 October 2019 18th AOCS Latin American Congress and Exhibition on Fats, Oils and Lipids Foz do Iguacu, Brazil www.meetings@aocs.org 8-10 October 2019 The 11th Palmex Indonesia Medan, Indonesia www.palmoilexpo.com

For a full events list, visit: www.ofimagazine.com 16

28 Oct-1 November 2019 86th NRA Annual Convention California, USA www.nationalrenderers.org/ events/convention

17th Annual Roundtable Meeting on Sustainable Palm Oil (RT17) Marriott Marquis Bangkok Queen’s Park Thailand www.rt.rspo.org 6-7 November 2019 World Oilseed Congress 2019 Lviv, Ukraine worldoilseed.org 7 November 2019 China International Oils & Oilseeds Conference (CIOC) Guangzhou, China www.dce.com.cn/ CIOCEN/464520/464521/ index.html

30 Oct-1 November 2019

7-8 November 2019

15th Indonesian Palm Oil Conference and 2020 Price Outlook (IPOC) The Westin Resort Nusa Dua Bali, Indonesia www.gapkiconference.org

DGF Jahrestagung 2019 Radisson Blu Hamburg, Germany veranstaltungen.gdch. de/tms/frontend/index. cfm?l=8876&sp_id=1

OFI – SEPTEMBER/OCTOBER 2019

Diary sepoct.indd 1

3-6 November 2019

7-8 November 2019 Advanced Technologies in Oilseed Processing, Edible Oil Refining and Oil Modification Guangzhou, China www.smartshortcourses.com/ oilprocess22/program.html 9-10 November 2019 2nd AOCS China Section Conference Guangzhou, China www.aocs.org/networkand-connect/membership/ sections#china-section 19-21 November 2019 International Palm Oil Congress & Exhibition (PIPOC) 2019 Kuala Lumpur, Malaysia pipoc.mpob.gov.my 22-23 November 2019 PORAM Annual Events 2019 (Forum, Golf & Dinner) Dorsett Grand Subang Hotel Kuala Lumpar, Malaysia poram.org.my/p 5 December 2019 10th Fats & Oils Istanbul/ Feeds & Grains Istanbul Istanbul, Turkey www.agripro.com.tr 20-21 January 2020 Fuels of the Future 2020 CityCube Berlin, Germany www.fuels-of-the-future.com 9-12 February 2020 World Congress on Oils & Fats 2020/ISF Lectureship Series International Convention Centre, Sydney, Australia wcofsydney2020.com 8-10 March 2020 10th International Symposium on Deep-Frying Hagen, Germany www.dgfett.de/index.php 26-29 April 2020 2020 AOCS Annual Meeting Montreal, Canada www.annualmeeting.aocs.org www.ofimagazine.com

04/09/2019 10:23:37


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USED COOKING OIL

The utilisation of used cooking oil (UCO) as a biodiesel feedstock has increased significantly within the EU, which produced around 15,000M litres of biodiesel in 2017. Between 2011 and 2016, there was a 360% increase in the use of UCO as a biofuel feedstock, rising from 0.68M tonnes to 2.44M tonnes in just five years, driven by renewable fuel policies. To meet growing UCO demand, imports from outside the EU (predominantly Asia) are the only legitimate options for increasing supply. However, as there are no current globally agreed standards for UCO, suppliers are only required to meet the operator’s specifications, resulting in a wide variety of qualities and chemical compositions. The net imports of UCO and UCObased FAME biodiesel (UCOME) to the EU have significantly increased since 2014, with a large proportion of this sourced from China, Indonesia and Malaysia. In 2018, these three countries exported more than 500,000 tonnes of UCO to the EU. This reliance is set to continue, with EU imports of Chinese UCO increasing by 5.6% in first quarter 2019, compared with first quarter 2018.

Factors affecting UCO quality

UCO has various names including waste cooking oil, used frying oil and yellow grease. However these all refer to the same commodity; purified oils and fats of plant and animal origin that have been used to cook food. European UCO is deemed a waste that 18 OFI – SEPTEMBER/OCTOBER 2019

UCO.indd 2

EU imports grow Used cooking oil (UCO) is increasingly utilised in the EU to produce biodiesel. To meet rising demand for this feedstock, EU imports of UCO from China, Indonesia and Malaysia are growing, raising concerns about their quality, traceability and indirect land use impact Douglas Phillips is no longer fit for human consumption, prompting its inclusion as an acceptable feedstock for ‘double counting’ towards the renewable fuel targets set out within the EU’s Renewable Energy Directive (RED). The fatty acid composition of edible oil feedstocks differs – often significantly – impacting their properties and suitability for biodiesel use. This is especially important when considering the properties of UCO; the characteristics of the initial edible oil used for frying will directly influence those of the waste product. Additionally, the cooking conditions employed will also affect the quality of the UCO feedstock. This includes the number of times the oil has been used, the food types fried within it and the oil’s storage between uses. During frying there are several chemical processes that take place, resulting in the deterioration of the oil. These include oxidation, hydrolysis and polymerisation. The first major consideration of the

UCO’s properties relates to its saturated fat content. Higher concentrations of saturated fatty acids can result in a fuel that has operational issues at lower temperatures. Another important consideration of UCO quality is the free fatty acid (FFA) content of the feedstock. FFAs are long carbon chain organic acids that have hydrolysed and become disconnected from the triglyceride backbone. These are therefore classed as impurities and must be removed before the transesterification process. Refined oil tends to have an FFA content below 0.5wt% which is ideal for biodiesel production. However in UCO, this can range between 0.5-15wt%. Without more sophisticated equipment, UCOs with FFAs above 3wt% can result in increased processing problems, producing soaps which effectively reduce the yield of the target methyl esters. The FFA content of UCO can be greatly influenced by cooking practices, differu ing significantly between domestic and www.ofimagazine.com

04/09/2019 10:36:26


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u

Figure 1: Net imports of palm oil, CPO and UCO/UCOME into EU (‘000 tonnes) u industrial sources. Increased frying time has been shown to cause degradation of the oil, increasing the UCO’s FFA content. However, the deterioration can be exacerbated further by short batch frying processes. Intermittent cooking, involving the heating and reheating of the oil several times, increases the likelihood of oxidation and hydrolysis, impacting the quality when compared to continued frying. This also results in a more viscous and acidic UCO, which again can impact its suitability as a feedstock for biodiesel. The different sources of UCO – both in the original raw material used and the cooking practices employed – results in a biodiesel feedstock that has the potential to be heterogenous. Before UCO can be used as a biodiesel feedstock, it must first be cleaned to remove any impurities and solids that exist as a result of the cooking process. This includes sieving to physically remove solids, degumming to remove phospholipids and de-watering. In addition, deacidification is often required, with UCO tending to be more acidic than the original edible oil source. Pre-treatment is particularly important when considering the conversion of UCO into biodiesel; the produced fuel must meet EN14214 standards in the EU and ASTM D6751 in the USA. The concentrations of FFAs in UCO can have a large impact on the transesterification reaction. If FFAs are in excess of 3wt%, then saponification (soap formation) can occur, causing a reduction in biodiesel yield while also increasing the catalyst consumption. In addition, the presence of 20 OFI – SEPTEMBER/OCTOBER 2019

UCO.indd 3

water within the feedstock can lead to hydrolysis which will also affect the efficiency of the conversion process. Consequently, several different mechanical and chemical methods have been developed to reduce the FFA and water content, while also neutralising the UCO. Once the UCO has been pretreated, the transformation of the waste feedstock into methyl esters is similar to that of virgin oils and fats – resulting in equivalent fuel properties. As with edible oil feedstocks that are high in saturated fats, any issues with crystallisation at low temperatures requires the addition of cold flow improvers to the produced UCOME to ensure its usability.

UCOME in the EU

There is already a well-established European UCOME market, with an estimated 3.5M tonnes of potential UCO capacity available within the EU. Between 2011 and 2016, the utilisation of UCO increased steadily, resulting in a 360% rise in its use, from 680,000 tonnes to 2.44M tonnes. The prominent EU users of UCO are Germany, Italy, the Netherlands, Spain and the UK. Up until 2003, UCO was utilised extensively as a high fat supplement in animal feed. However, the outbreak of mad cow disease (BSE) prompted the banning of UCO as a feed supplement, resulting in its classification as a waste. There are now legal limitations placed on the collection and disposal of UCO that have resulted in it becoming a well-regulated feedstock, attaining certain levels of quality.

Source: NNFCC

USED COOKING OIL In addition to this quality, the traceability and sustainability of the UCO generated in the EU – specifically the oil from where it originates – is well established. As UCO is deemed no longer fit for human or animal consumption, the EU legally recognises it as a waste and its disposal is carefully regulated. The default carbon intensity value of biodiesel produced from UCOME is currently defined at 14 gCO₂e/MJ, representing a carbon saving of 83% when used as a replacement to diesel. In comparison, biodiesel from rapeseed, soya and palm oil have associated carbon intensity factors of 52, 58 and 68 gCO₂e/ MJ, respectively, equating to carbon savings that range from 19-38%. These crop-derived feedstocks for biodiesel do not meet the 50% (latterly 60%) greenhouse (GHG) savings threshold required by the EU’s RED. Therefore, when considering stated carbon intensity values, UCOME is seen as a preferable alternative fuel for reducing emissions. The benefits of UCO also extend to the financial commitments of producing and supplying UCOME fuel. In the amended version of the RED (REDII), the use of waste feedstocks, including UCO, has been actively promoted by the European Commission, specifically their double counting towards renewable energy targets.

UCO and UCOME imports

Although the use of UCO is widely supported within the EU, particularly that produced by member states, there is a growing demand for it as a resource. This has resulted in the establishment of global UCO markets, although there are concerns about the quality, traceability and sustainability of imported UCO. The EU has a well-regulated market for the use of the waste oil produced by member states; reputable companies collect UCO from industrial and commercial food producers, delivering the waste feedstock to biodiesel producers. As a result, 2016 estimates of the UCO market indicated that there was only a small amount of additional supply remaining within the EU. To meet the growing feedstock demand, global imports from outside the EU are the only legitimate option for increasing UCO supply. Net imports of UCO and UCOME into the EU have increased significantly since 2014 (see Figure 1, above), with a large proportion of the imports originating from China, Indonesia and Malaysia. In 2018, EU UCO imports totalled more than 500,000 tonnes. Nearly 100,000 tonnes of this was sourced from u 

www.ofimagazine.com

04/09/2019 10:36:31


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Figure 2: Price changes of UCO and CPO, 2017-2018 (US$/tonne) u Malaysia. However, these bulk shipments were blends of both Malaysian and UCO originating from China. In the UK, the most common feedstock source of the biodiesel supplied in 2018 – between April and December – was Chinese UCO, totalling 93M litres, representing 15% of certified biodiesel and 9% of the total certified renewable fuel. Furthermore, Malaysian UCO – which partially consists of blended Chinese UCO – accounted for an additional 36M litres of the UK’s supplied biodiesel. Comparatively, during this same period, the UK’s UCO feedstocks were used to produce 76M litres. In addition to the increased deliveries of UCO, the EU imported nearly 200,000 tonnes of UCOME in 2018 sourced predominantly from Indonesia. Although biodiesel production from UCO is currently in its infancy in China, the country’s hydrotreated vegetable oil (HVO) biodiesel capacity is increasing. For example, the ISCC EU certified Yangzhou Jianyuan HVO plant has a capacity of 100,000 tonnes/year, utilising UCO as its main feedstock. If China establishes a significant supply of EU certified biodiesel – using a double counting feedstock – then EU imports of Chinese HVO may increase significantly. Trade data indicates that the EU is replacing its consumption of palm oil with global imports of UCO and, to a lesser extent, UCOME. This is due to the associated high indirect land use change (ILUC) impact of palm oil cultivation and the well-publicised issues with biodiversity. 22 OFI – SEPTEMBER/OCTOBER 2019

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Quality issues

The consumption of edible vegetable oils in China has grown significantly over the last decade. This has coincided with increased demand for fried food, with fast food restaurants – such as McDonald’s and KFC – establishing themselves within the country. Domestic consumption of edible oils in China is met mainly by soyabean, rapeseed and peanut oils. However in large-scale, commercial food production – frying chips and other snack foods – palm is the preferred cooking oil. As a result, it is estimated that more than 40% of the palm oil consumed in China is used for food production, particularly in catering frying. In addition, most of the edible oil consumed in Indonesia and Malaysia is sourced from domestic palm oil, particularly in Indonesia, where the use of palm oil in cooking has continued to increase, currently at a rate of ~5%/year. This equated to more than 2M tonnes of palm oil in 2016 alone. Palm oil is high in saturated fatty acids, with a pour point of ~23.5°C. Therefore, any UCO originating from palm would have comparable fatty acid contents and chemical properties. Due to the reliance on palm oil within their food industries, the UCO sourced from China, Indonesia and Malaysia is likely to fundamentally differ to that generated in the EU as a result of the differing original feedstocks. This could have repercussions, impacting the performance of the produced UCOME. Without the addition of cold flow improvers (CFIs), any

Source: NNFCC

USED COOKING OIL biodiesel produced from UCO that originates from palm is likely to gel in colder temperatures, causing engines to fail. Although routine quality testing is currently undertaken in Europe, this is by no means definitive. High-profile usability issues with biodiesel fuels could severely impact the public’s perception and confidence in them, negatively affecting the broader biofuel sector in general. An additional quality issue is the rancidification of UCO feedstocks. During the last decade, there have been several food safety scandals in China, with the most prominent relating to the supply and use of illegal cooking oil, often referred to as ‘gutter oil’. The crudely processed waste oil – sourced predominantly from catering and sewage wastes – is sold for human consumption as a cheap alternative cooking oil. As part of a bid to improve food safety, the Chinese State Council has begun to tackle the mass production of illegal cooking oil, resulting in an increased supply of UCO. There are currently no globally agreed quality standards for UCO, with the supplied feedstock merely required to meet the operators’ desired specifications – this is normally <1% contaminants and <4% FFAs. UCO that is composed predominantly of gutter oil will contain much higher concentrations of FFAs and contaminants, causing issues in the production of biodiesel. The resulting higher processing costs and reduced yields associated with Chinese UCO may therefore result in an uneconomic process.

Sustainability issues

The key driver for biodiesel uptake has been its ability to markedly reduce the GHG emissions associated with the transport sector, particularly in helping the transition towards a decarbonised system. Biofuels that are produced in facilities which began operations after October 2015 are required to comply with a 60% GHG saving threshold, an increase from the previously mandated 50%. Ensuring the sustainability of UCO feedstocks – correctly quantifying their potential for combatting climate change – is therefore imperative, particularly in relation to the obligations of fuel suppliers to reduce GHG emissions as part of the EU Fuel Quality Directive. As a waste, UCO is considered a low risk ILUC biofuel feedstock. This differs to those produced from crops grown on arable land, such as palm oil, which is deemed high risk due to its increased ILUC implications. In the case of gutter oil – and other low-grade waste oil sources u that are linked to animal by-products www.ofimagazine.com

04/09/2019 10:36:36


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USED COOKING OIL u – their validity as wastes is undeniable, falling in line with current EU policy and legislation, while their removal from human consumption supply chains will also help improve food safety in China. However, the inclusion of better quality, filtered oils that are not legally mandated as a waste is a more contentious issue. In China, UCO has historically been an important component of animal feed, acting as a cheap and high energy additive, improving both the energy density and the binding of feed pellets. It has also been used as a supplement in creep feed, helping to support the increased growth and weight of young livestock. This is particularly important within China’s growing pork industry; the growth demand for meat protein has resulted in increased demand for cheap animal feed sources. Current Chinese State Council policy forbids the use of UCO – sourced from catering and meat processing facilities – as a supplement for animal feed. Though this policy does not include high-grade used vegetable oils, uncontaminated by meat products, these are also beginning to be included as a UCO source. Their inclusion will result in a better quality UCO biodiesel feedstock – containing lower levels of contamination and FFAs – but its removal from the animal feed supply chain will need to be replaced. Since 2015, there has been a sustained increase in the amount of UCO exported from China to the EU. This has coincided with increased imports of edible oils during the same time period. Both soyabean and rapeseed oil imports have shown increases. However these are small when compared to palm oil; between 2016 and 2018, palm imports to China grew by 1M tonnes, representing an increase of more than 20%. There are complexities relating to Chinese edible oil imports – such as their recent trade dispute with the USA, prompting the need to find alternative sources of soyabeans. However, the available trade data clearly shows China’s increased consumption of palm oil. Although correlation does not constitute causation, this increase should not be ignored; there are clear parallels between increased exports of Chinese UCO and their imports of palm oil, with the growth of both expected to continue throughout 2019. Consequently, there are concerns over the carbon intensity of UCO sourced from China, Indonesia and Malaysia, due to the potential inclusion of non-wastes within the waste feedstock stream. If their utilisation in EU biofuel production is leading to an increased use of palm oil within animal feed, replacing high grade uncontaminated 24 OFI – SEPTEMBER/OCTOBER 2019

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‘Between 2011 and 2016, there was a 360% increase in the use of UCO as a biodiesel feedstock in the EU, driven by renewable fuel policies’ used oil, then the subsequent ILUC emissions of palm oil should be included in the UCO assessment – or at least be flagged as a potential high ILUC-risk fuel.

Traceability issues

The final, and perhaps most controversial, issue relates to the traceability of the UCO sourced from China. To access the European market, the supplied UCO must meet EU sustainability standards. UCO collection points (CPs) – which source the waste directly from the places of origin – are audited on the documentation of the supplied materials. Each point of origin must be certified; however, the audit process requires only signed self-declarations as proof. Additionally, only large waste producers – generating more than 120 tonnes/year – are required to provide samples within the CP auditing framework. These are relatively soft anti-fraud mechanisms that require a certain level of trust, making them susceptible to exploitation. The motive for this strengthens further when considering the market price of UCO. Figure 2 (p22) demonstrates the prices of UCO and crude palm oil are closely related – likely a result of their suitability as cheap biodiesel feedstocks. As evidenced, during the last six months of 2018, the value of UCO was greater than CPO, resulting in increased exports of the commodity from China to the EU. This has continued into 2019, with Chinese UCO accounting for US$55.8M worth of imports in the first quarter alone. The higher value of UCO, and a lack of stringent traceability controls on the collecting points and points of origin in China, could give rise to fraudulent activity. This potential for fraudulent activities – relating directly to biodiesel production from UCO – has been demonstrated re-

cently within the Netherlands. Significant volumes of biodiesel sold there in 2015 and 2016 were wrongly designated as sustainable, with double-counting credits claimed as a result. Not only do instances like this raise doubt over the sustainability of certain imported feedstocks, they also undermine confidence in the entire biofuel sector, which could have much greater repercussions.

Conclusions

Utilising wastes which, without the existence of a biofuel market, would end up in landfill is seen as a preferable pathway option ahead of fuel crops. The EU’s well-defined legislative framework for wastes has established UCO as a key biodiesel feedstock. This demand is currently being met by a growing reliance on Chinese UCO imports. However, the feedstock quality, traceability and robustness of the supply chain’s sustainability may not be as comparable to EU-sourced UCO. Unlike the EU, estimations of UCO capacity and availability within China, Indonesia and Malaysia are inherently difficult to validate. Indeed, without a proper understanding of the current volumes of waste oil generated, it is almost impossible to substantiate the GHG savings associated with the feedstock or if additional wastes are being produced as a result of the EU’s policy support for biodiesel production from imported UCO. This is further exacerbated by the inclusion of possible non-wastes within the UCO waste stream – the redirection of high-grade waste vegetable oils, safe for consumption within animal feed, to biofuel production may result in their replacement with cheaper virgin edible oils, such as palm. The available evidence indicates that China’s palm oil imports are increasing, in line with the country’s increased exports of UCO. If these are indeed connected, then the ILUC implications of using imported UCO as a feedstock for biodiesel could be significant and must be investigated. Furthermore, if imported UCO is to continue as a double counting feedstock, then confidence in its supply chain should be paramount. The certification process of UCO – sourced from outside the EU – should be more robust, helping to ensure that the feedstock meets comparable levels of traceability and sustainability.  Dr Douglas Phillips is a consultant for the international consultancy, NNFCC, UK This article is based on his report, ‘Implications of Used Cooking Oil as a Biodiesel Feedstock’, published in May 2019  www.ofimagazine.com

04/09/2019 10:36:36


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PLANT & TECHNOLOGY

Global round-up of projects Bunge opens new edible oils processing facility in China

Oils & Fats International reports on some of the latest projects, technology and process news and developments around the world IN BRIEF

Bunge’s edible oil business Bunge Loders Croklaan (BLC) has announced the opening of a new edible oils processing facility in Xiamen, China (pictured). The US food company said on 18 July that the new facility in the Fujian region expanded BLC’s ability to deliver plant-based speciality oils and fats ingredients for the food and food service industry to meet growing demand in China, while also serving customers around the world. The oils operations in the Xiamen facility encompassed production processes, ranging from oil refining and fraction modification to packaging. The facility

Perdue AgriBusiness acquires oilseed crushing facilities

2 OFI 26 OFI––MONTH SEPTEMBER/OCTOBER 2018 2019

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also included a creative studio, designed to develop innnovative ingredients and food solutions for the Chinese market. In addition, it also held a pilot plant and quality control lab equipped with technology to ensure strict compliance with regulatory requirements. China is an extremely dynamic and growing food market, according to BLC vice president, Manuel Laborde. Fujian had a history as a confectionery and bakery region, and was home to the largest and most well known domestic brands, Bunge added.

US-based Perdue AgriBusiness has acquired two oilseed expeller crushing facilities and an organic speciality oil refinery from plant designer and operator Hart AgStrong. The deal closed on 5 August. The crushing facilities in Georgia and Kentucky produced organic and non-GMO oils sold to food and industrial

product manufacturers and meal for organic and non-GMO animal feeding operations. Perdue said the acquisition would allow the company to fully supply its cooking plants in Georgia (pictured) and Virginia. The AgStrong assets would be incorporated into the existing Perdue AgriBusiness Specialty Crops and Oils business.

Source: Perdue Farms

GERMANY: Engineering firm GEA has showcased its new cloud-based platform to provide customers with digital service solutions such as data analysis, remote maintenance, and comprehensive e-commerce, enabling users to integrate their supplier interactions with one common platform. GEA said on 6 May that the platform included a documentation section which provided customers with certificates, operating manuals and training documents, for example. The portal was due to be launched in July 2019 for the first German customers and additional services would be implemented until the end of 2020, such as condition monitoring, programmable logic controller (PLC) connections and video support.

Source: BLC

USA: Glacial Lakes Energy (GLC) will be purchasing two South Dakota ethanol plants from Advanced BioEnergy (ABE) for US$47.5M. Biofuels Digest reported on 6 August that the transaction’s closing was subject to the approval of the ABE unit holders and other customary conditions. GLC expected the transaction to close in the 2019 third calendar quarter. ABE would continue to operate the plants until the transaction closed.

AgStrong’s management team and associates at all locations would transition to Perdue. Perdue AgriBusiness Specialty Crops and Oils procures and sells organic and non-GMO grains and oilseeds, both domestically and internationally. It is an independent operating company of Perdue Farms Inc and a merchandiser, processor and exporter of agricultural products. “The AgStrong facilities offer an ideal complement to Perdue AgriBusiness’ existing speciality crops and oils capabilities,” said Dick Willey, president of Perdue AgriBusiness. www.ofimagazine.com www.ofimagazine.com

02/09/2019 15:22:43


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PLANT & TECHNOLOGY New soyabean processing plant being built in New York state Soyabean company St Lawrence Soyway is planning to build a US$54M soyabean processing plant in Massena, New York state. The plant would process soyabeans into livestock feed and produce soya oil, WWNY-TV reported on 2 July. It would employ about 38 people and could be in operation by next harvest season if all went well. Local farmers said that having a nearby market should cut expenses, the news agency said. The plant would be located at the aluminum company Alcoa East’s former site, near the bridge to Canada. The Massena Town Planning Board had already granted the project conditional approval. “It’s very positive, It’s really a clean industry and perfect utilisation of this property.” WWNY-TV quoted Vance Fleury, chair of Massena Town Planning Board, as saying.

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Ohio soyabean project receives US$2M federal loan US soyabean company Coshocton Grain will be receiving a US$2M federal no interest loan for its Ohio soyabean processing plant. The Coshocton Tribune wrote that the US Department of Agriculture (USDA) announced on 9 July that it had awarded the grain company funds to construct the facility that would sell products to the area’s livestock and biodiesel producers. The project included US$8M in applicant contributions, bringing the total project to around US$10M. The facility expected to purchase grain from 900 local farmers in 22 Ohio counties, the Coshocton Tribune wrote. The plant was expected to use 3.36M bushels/year of soyabeans to produce 81,000 tonnes of soyabean meal and

12,600 tonnes of soyabean oil. Coshocton Grain CEO Rhonda Crown said the plant construction and equipment installation was on schedule and due to start by the end of July. Coshocton Grain said the plant would be commissioned in mid-August and was expected to have soyabean meal and oil for sale by 28 August. This was the second loan Coshocton Grain had received through the USDA’s Rural Development Programme, the first being in 2013 for a grain elevator in Illinois. Ohio senator Sherrod Brown said in a press release: “This federal investment is good for farmers and will support Coshocton county as it works to expand the local economy and provide opportunities for workers.”

www.ofimagazine.com

OFI – SEPTEMBER/OCTOBER 2019

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PLANT & TECHNOLOGY USA: Chemicals company DuPont Nutrition & Biosciences has announced the launch of its patent-pending thermostable protease Optimash DCO+. The product was for increased recovery of corn oil in dry grind ethanol plants. The company said on 10 June that Optimash DCO+ was a standalone product which meant ethanol producers could precisely dose it without having to change their alpha amylase. USA: Oilseed technology supplier Crown has introduced a patented solution to simplify seed conditioner cleaning, maintenance and repair. The company said on 1 May that the Modular Vertical Seed Conditioner Heating Section was developed in response to customer needs. “It features 16 removable tube modules in the heating section, allowing oilseed crush and preparation operators to identify, isolate and mitigate issues without unstacking, major shutdowns, permits or cranes,” Crown said. Field tests had shown that the heating section had led to a significant reduction in maintenance shutdowns, from 10 days to 24 hours. The heating section was capable of running at higher operating pressures, up to 45 pounds/square inch, Crown added.

Gamalux Oils projecting 30% growth in export sales Usman said that with the manufacturing plants were Malaysian palm oil refinery located in Lahad Datu, Sabah, current 70% utilisation rate, Gamalux Oils has projected a production could be further one of the biggest crude 30% annual growth in export increased to meet rising palm oil producing states in sales for this year, topping demand, Bernama wrote. Malaysia. RM100M (US$24M). The company also allocated Bernama reported that Malaysian newspaper RM16M (US$3.8M) in capital this enabled the company to Benama wrote on 16 June expenditure this year for the source sufficient materials that Gamalux’s chief execuphysical refinery’s capacity from palm oil refineries and tive Usman Ahmed said 80% expansion. mills to produce its sustainof the company’s output It saw opportunities in able feedstock. was exported to European exporting to the USA, and The solvent extraction countries such as Italy, the Japan, which were opening plant and the specialised Netherlands, Scandinavia, up to using sustainable refinery had 400 tonnes/day Spain, Switzerland, and the raw materials for its power and 300 tonnes/day capacity, UK. The remainder went to plants. respectively. China and South Korea. “The company recorded RM80M (US$19M) in sales last year and is on track to achieve this year’s higher target based on the demand shown by its existing clients, particularly those in the European sector,” Usman told Bernama. He said that Gamalux’s products – all from waste vegetable oils – had become sought after in the sustainable market. Gamalux’s two Gamalux has two manufacturing plants in Lahad Datu, Sabah

Source: Gamalux Oils

IN BRIEF

Sao Martinho to invest in new ethanol plant Brazilian ethanol and sugar producer Sao Martinho plans to invest over R$350M (US$86.4M) in a new corn-based ethanol plant in Goiás, Brazil. It would be co-located with its Boa Vista mill. The company said it would have the capacity to produce 200M litres of hydrous ethanol and 140,000 tonnes of distiller’s dried grains with solubles (DDGS) per year, Reuters reported on 19 June.

Quirinópolis, Goiás was an important grain producing region in Brazil’s centre-west grain belt. Brazilian corn production had risen sharply in the last five years as farmers had consolidated a rotation system of planting soyabeans in the summer and corn in the winter. Sao Martinho did not disclose an expected timeline for the plant’s construction, Reuters wrote.

Quantum Energy enters MOU with target biofuels company US-based Quantum Energy has entered a non-binding memorandum of understanding (MOU) with a biofuels target company that designs, manufactures, operates and sells modular biorefineries. The firm said on 10 May that if certain conditions were met, Quantum’s parent company FTPM Resources would enter a joint venture with the target com28 OFI – SEPTEMBER/OCTOBER 2019

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pany to develop a range of value-added food, feed and potentially medical grade products. It would also have the option to merge with the target company, which would be offered the right to acquire shares of Quantum’s preferred stock and appoint members to its board of directors. The target company’s patented

biorefineries had annual production capacities of 4.5M, 9M and 22.5M litres and could also produce alternative liquid biofuels from organic waste streams. No assurances could be given that Quantum would obtain sufficient capital to complete the transaction, the company said. www.ofimagazine.com

02/09/2019 15:22:46


PLANT & TECHNOLOGY Verbio Diesel Canada Corporation has purchased a biodiesel plant (pictured) from Atlantic Biodiesel Corporation in Dain City, Ontario. The contract was signed on 2 May. The plant had an annual production capacity of about 150,000 tonnes of biodiesel and 18,000 tonnes of raw glycerin. Pending resolutions of certain conditions was expected to close by mid-2019. German parent company Verbio had approximately 470,000 tonnes of annual biodiesel production capacity, Biodiesel Magazine wrote. “The North American biodiesel market has an annual demand of approximately 9M tonnes of biodiesel based on soya and canola oils,” the company said.

Source: Verbio

Verbio to purchase biodiesel plant in Canada

Source: Grupo Infiniti Holdings

Katzen to design new corn ethanol plant

US technology provider Katzen International has announced it will design a new corn ethanol plant in Mato Grosso, Brazil. The plant, called Ethanol SA Bioenergia, was expected to produce 800,000 litres/day of ethanol. It was a joint venture between Grupo O+ Participações and Grupo Infiniti Holdings, Katzen said on 29 April. “We’ve already started the design and we will deliver our full part of the design by the end of this year,” Ethanol Producer quoted president of Katzen, Tara Vigil as saying. Vigil said Brazil’s interest in corn ethanol was growing, whereas traditionally, ethanol in the country was made from sugarcane. The company’s ethanol production process included low-temperature cooking, high-yield solid state fermentation, pressure cascade distillation and energy-integrated waste-heat evaporation. Katzen was also involved with one of the two other ethanol projects in the region which were due to start up this summer. Vigil said Ethanol S.A. Bioenergia’s start-up was expected in summer 2020. www.ofimagazine.com 

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02/09/2019 15:22:48


INDUSTRY 4.0

Revolution in palm oil The palm oil industry has gone through different stages of industrial revolution. What is the next step to ensure sustainability and efficiency and how can it utilise Industry 4.0 in this journey? Qua Kiat Seng Digital technology is driving exponential changes which are impacting every facet of society. Within a single generation, the world has gone from slide rules and log tables to personal computers and, more recently, cloud-based cognitive systems. Cognitive computing involves selflearning systems that use data mining, pattern recognition and natural language processing to mimic the way the human brain works. So how does this new industrial revolution impact the palm oil industry?

Industry development

The Industrial Revolution, now also known as the First Industrial Revolution (Industry 1.0) between around 1760 to 1820-1840, saw the adoption of steam and water power and mechanisation. Industrial technologies that improved farming included the seed drill, the iron plough and the threshing machine. Machines and metal working techniques developed in the late 19th century which 30 OFI â&#x20AC;&#x201C; SEPTEMBER/OCTOBER 2019

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eventually resulted in the mass production of agricultural equipment such as reapers, binders and combine harvesters. Industry 2.0 came in the late 1800s, with the advent of assembly lines, mass production and electricity. In the cattle industry, for example, meat packing assembly plants were developed and tallow became more easily available for the oils and fats industry. In the 1980s, Industry 3.0 introduced computers and automation such as the Programmable Logic Controller (PLC), which revolutionised the automation industry. And in more recent years, Industry 4.0 has introduced manufacturing to concepts such as cyber technologies, communication through the Internet of Things (IoT), and cloud and cognitive computing (see Figure 1, p33).

What is Industry 4.0?

Industry 4.0 is the marriage of advanced manufacturing techniques with information technology (IT), data and analytics. IT and operations technology (OT) are combined to create value in new and different ways. Underlying this is the availability of advanced manufacturing techniques. For business operations, the benefits of Industry 4.0 are improvements in productivity and reduction of risks. These risks may be in stocks, process safety, quality and contamination. This may manifest itself in smart manufacturing and robust supply chain planning. It can also remove workers from

dangerous or tedious jobs, and upskill them with the use of modern tools such as tablets, Google Glass and applying advanced analytics to make predictive and proactive actions.

Applications in palm oil

The palm oil industry is at various stages when it comes to Industry 4.0. To break it down, a palm oil plantation would be at the Industry 1.0 stage, the mill in Industry 2.0 and refinery and oleochemical operations in Industry 3.0, with oleochemicals closest to being at Industry 4.0. But within each sector, you can still find the entire spectrum. In 1956, oil palm plantations were encouraged under the 1st Malaysian Plan to reduce dependence on natural rubber. In the 1960s, milling and crushing were the gateway to palm oil processing, first with refining in the 1970s and then with oleochemicals in the 1980s. Oil palm trees are planted in neat rows, similar to rubber trees, conducive to manual tapping or harvesting. However, a shortage of labour is now a problem for plantations. Regular harvesting is a key factor in ensuring quality, including minimising the levels of the process contaminants, 3-MCPDs and GEs. In response, the Malaysian Palm Oil Board offered a US$1M prize in 2015 for a mechanised harvesting solution. There was no winner and the competition has been closed since 2017. This will remain one of the bigger challenges for the oil palm industry that may need government support and sovereign funds. www.ofimagazine.com

04/09/2019 10:40:03


FEATURE In plantations, drones are now increasingly utilised. One application is for applying fertilisers and pesticides. As this is a machine operating a machine, data can be collected and used as an example for the next application. It also removes a health hazard for human workers. The application of fertilisers and pesticides may increase chlorine levels in palm oil, which can then lead to increased levels of 3-MCPD. The application and use of analytical data in this way is an example of Industry 4.0 in action.

Milling

In milling, it is interesting to note that the 1953 Mongana Report remains an important reference for mill engineers. It highlights how young the sector is. Examples of changes are the different techniques for sterilisation, from hydraulic to screw pressing. There is also the new Maceration Induced Cell Rupturing Oil Nut Extraction Synthesis (MICRONES) technology, which is a more efficient palm oil extraction method, where the kernel nuts are separated from the palm fruit mesocarp before they enter the press. A large plantation company has commissioned an upscaled MICRONES plant to be built at one of its mills. This plant incorporates supervisory control and data acquisition​(SCADA) technology – which is not widely​used in the sector – and will bring the​mill up to Industry 3.0, and potentially​Industry 4.0, level. Many milling processes are generally not automated due to the difficulty in measuring multiple phase systems as well as variations in the fresh fruit bunch. Here, soft sensors could be employed. Soft sensors are inferential models that use easily measured variables to estimate process variables that are hard to measure due to technological limitations.

INDUSTRY 4.0 temperature deodorisation. Much of palm oil refining is associated with fractionation and crystallisation conditions which can give rise to a wide range of products. Data analytics can fine-tune this to ensure consistency. The oleochemical industry began in 1903 with the catalytic conversion of fatty acid esters into fatty alcohol. Fat splitting in autoclaves took place in 1905. The first oleochemical plant in Malaysia in 1980 had a production capacity of 30,000 tonnes/year but this has increased to around 250,000 tonnes/year. Just as with refining, there were efficiency gains, which made process control critical. Oleochemical producers have said that

some benefits of Industry 4.0 are: • Greater control over quality • Predictive asset management • Soft sensors help improve energy usage and plant efficiency • Convenience of online sales • 3D visualisation and virtual reality training

Industry 4.0 is not factory limited

Industry 4.0 also affects a company’s suppliers and customers. Modern information and communication technologies being used down the supply chain will allow distributors to detect defects and production failures. This will minimise overproduction

u

Refining

Refining began in the 1900s with the vacuum deodorisation of alkali-refined cottonseed oil. The palm oil refining sector has built very rapidly on this. The first physical refinery in Malaysia in 1974 had a capacity of just 100 tonnes/ day. Today, a single fully automated train can process 2,500 tonnes/day. While a heavy throughput leads to efficiency gains, it also means process control is critical. Physical refining is a compromise between colour, free fatty acid levels and optimised stability. This will lend itself to data analytics and the attempt to solve the 3-MCPD and GE issue with short time/high temperature bleaching, and longer residence/low 2 OFI – MONTH 2018 www.ofimagazine.com

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INDUSTRY 4.0 In its 2019 budget, the Malaysian government has allocated RM5bn (US$1.2bn) to propel Malaysian industries in the wake of Industry 4.0.

u

Figure 1: Journey from Industry 1.0 to Industry X.0 u so there is less waste.

An example of where this is happening is with Roundtable on Sustainable Palm Oil (RSPO) supply chain certification, that tracks and traces the product to ensure it has been sourced from certified plantations. This can be an enormous task and companies use enterprise resource planning (ERP) to manage this. Such tracking and tracing may soon be demanded in the supply chain for assurance on 3-MCPD and GE contaminants. Blockchain technology could be used to speed up the process, strengthen

www.ofimagazine.com 

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traceability and reduce costs. But it is not yet proven. It is an online cloud system designed for transparency and efficiency in purchasing a product. It has already begun to take off in parts of the agricultural sector since it appeals to consumer desire for traceability . There is a vast disparity in the upstream and downstream sectors of the palm oil industry when it comes to technology that allows automation and ultimately Industry 4.0. This is quite different from the oil and gas industry where upstream and downstream are operations are comparable in technology.

Source: IChemE

The uncertain future

Industry 4.0 has prompted concerns over job losses. However, Simutech wrote that in Germany, Industry 4.0 has resulted in more jobs being created than lost, with these new jobs requring different skills. This means companies will need to retrain their workforce to implement Industry 4.0. Another issue lies with production-line downtime. Figures from Rutgers University estimates that downtime costs for the food processing industry is US$30,000/ hour. Comparatively, the figure for the petrochemical industry is US$87,000/hour. As more complex machines are intergrated into the supply chain, manufacturing will speed up, meaning every minute of production line activity will become more valuable and downtime becomes exponentially more costly. ď Ź Qua Kiat Seng is a chartered chemical engineer with a 32 year career in operations in the palm oil industry

OFI â&#x20AC;&#x201C; SEPTEMBER/OCTOBER 2019 33

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SHOW PREVIEW

Countdown to PIPOC 2019 begins The biennial Malaysian Palm Oil Board (MPOB) International Palm Oil Congress and Exhibition (PIPOC) will be held at the Kuala Lumpur Convention Centre on 19-21 November 2019. This year, Prime Minister YAB Tun Dr Mahathir Mohamad will be officiating the congress, which is set to attract thousands of delegates and visitors. “PIPOC 2019 caters for those involved in the oil palm, palm oil and other oils and fats industry including R&D personnel, scientists, planters, millers, traders, processors, manufacturers, economists, policy makers and academicians,” says the MPOB. The congress will feature five concurrent conferences, a trade exhibition, technical tours and a congress dinner. The five concurrent conferences will focus on: Agriculture, Biotechnology & Sustainability Session 1: Agriculture Session 2: Biotechnology Session 3: Sustainability Chemistry, Processing Technology & Bioenergy Session 1: Milling, Processing and Refining Technology Session 2: Science and Emerging Technology, Analytical and Quality Session 3: Biomass and Bioenergy Session 4: Biofuels Session 5: Environment and Sustainability Oleo & Speciality Chemicals Session 1: Sustainable Oleochemical

Development Session 2: Greener Processes and Materials Session 3: Oleochemicals for Sustainable Consumer Products Session 4: Cutting Edge Technology for Sustainable Development Session 5: Forum – Balancing Sustainability Pillars for Palm Oleochemicals Food, Health & Nutrition Session 1: Food and Feed Innovation Session 2: Food Safety and Quality Session 3: Nutrition and Metabolism Session 4: Clinical and Translational Evidence Session 5: Forum – Nutrition and Lifestyle: Are We Ready for the Ageing Society Global Economics & Marketing Session 1: Enhancing Sustainable Social Standard Session 2: Sustainable Palm Oil for Preserving the Planet

Session 3: Sustaining Palm Oil Economic Competitiveness Session 4: Enhancing Sustainable Global Parntership

Technical tours

On Monday 18 November, technical tours to selected destinations will be arranged for delegates to experience and gain new knowledge in various aspects of the palm oil industry in Malaysia. There are five tour options to visit a plantation and mill; biogas plant; MPOB research station; a smallholder plantation; and an oleochemicals operation.  

Contact

Malaysian Palm Oil Board Tel: +603 87694415 E-mail: pipoc@mpob.gov.my Website: pipoc.mpob.gov.my

OFI is the official publication of PIPOC 2019

2 OFI – MONTH 2018 www.ofimagazine.com OFI – SEPTEMBER/OCTOBER www.ofimagazine.com 2019 35 

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INSTRUMENTATION

Global round-up Oils & Fats International reports on some of the latest instrumentation news and developments around the world

Endress+Hauser reports strong growth and sales Swiss instrumentation supplier Endress+Hauser has reported strong growth across all regions, sectors and product areas in 2018, with sales reaching nearly €2.5bn (US$2.77bn). “The ongoing digitalisation of the industry and positive development on the international markets provided impetus,” the group said in May. Net sales grew by 9.5% to €2.455bn (US$2.72bn) with the strongest growth seen in the Americas. Endress+Hauser said 2019 had got off to a good start with incoming orders and net sales for the group tracking well above levels in previous years. The company provides sensors, instruments, systems and services for level, flow, pressure and temperature measurement as well as analytics and data acquisition. It works in a wide variety of industries including edible oils; chemicals; petrochemicals; food and beverages; oil and gas; water and wastewater; power and energy; life sciences; primaries and metal; renewable energies; pulp and paper; and shipbuilding. “Edible oil manufacturers must address the challenges of ensuring high output, keeping operations costs constant and conserving resources on a daily basis, all without sacrificing product quality,” the company said. “Modern, innovative 36 OFI – SEPTEMBER/OCTOBER 2019

Instrumentation.indd 2

production processes, as well as reliable instruments for measuring critical process parameters, make a significant contribution towards managing these challenges.” One of the company’s customers was Germany’s C Thywissen, a familyowned company that produces vegetable oils, animal feed, lecithin and biodiesel. Headquartered in Neuss, the firm processes 2,000 tonnes/day of oilseeds. “One of the essential prerequisites is the reliable monitoring, regulation and control of each individual step in the process that leads to edible vegetable oil,” Endress+Hauser said. “Refining is an important process as well, with temperature, flow and pressure playing a key role in product quality and safety. “Our measurement instruments guarantee smooth-running production and the conservation of all types of resources.” Instruments included the Cerabar PMC7 (pictured above), featuring a ceramic measurement cell for pressure monitoring; flow meters to ensure precise dosing of process enhancers, additives and operating materials; instruments to measure the hexane temperature (CT) in extractors; and temperature, pressure and flow measurement technology from a single source for the steam generation and distribution processes.

New method to categorise olive oil by aromatic fraction Scientists at the University of Cordoba, Spain, have developed a new analytical methodology to catorgorise olive oil based on the product’s aromatic fraction as if it were the nose of a human expert taster. Tech Explorist reported on 16 May that this was done by using gas chromatography and ion mobility spectrometry, a technique that separated ions when in the gas state. The method generated 3D graphics of each volatile chemical compound in each sample of olive oil, resulting in a large amount of data to process. The group studied two strategies for dealing with the data; the first using spectral fingerprints containing all the chemical data of an olive oil and the other utilising a series of 113 specific signals that make up a spectral fingerprint. The researchers analysed 701 heterogeneous olive oil samples from different kinds of olives at different degrees of ripeness, from different geographical areas and that had been processed and stored in different ways. The scientists found that their second technique was efficiently predicting the classification of olive oil samples, in addition to being easier to implement within the industry than the strategy of using the whole spectral fingerprint. “Currently, olive oil classification is very costly and slow,” said Tech Explorist. “Categorising oil into extra virgin, virgin and lampante olive oil requires an official method, which involves a physicochemical analysis and a sensory analysis by expert tasters at the end. “There are very few expert olive oil tasters in other countries, hence the urgency to find another way to categorise olive oil that does not involve sensory analysis.”

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04/09/2019 10:45:47


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INSTRUMENTATION u

Evonik launches new test for corn DDGS used in feed German speciality chemicals firm Evonik has launched a new testing service for distiller’s dried grains with solubles (DDGS). “The new Aminored 2.0 test allows users to rapidly evaluate the nutritional value of corn DDGS used in feed production, detecting the impact of processing,” the company said in March. “Crucially, it distinguishes over-processed batches and reveals the degree of over-processing, a major concern in corn DDGS.” DDGS is a co-product of dry-milled ethanol production and is used as a feed ingredient to provide supplementary energy and protein. “Without the test, nutritionists usually apply high safety margins to corn DDGS and use low digestibility coefficients to minimise risk, as quality is variable between different plants and even within

Sonar used to detect olive oil adulteration Once a method using sound propagation to navigate or detect submarines under water, sonar has been used by scientists at the University of Missouri, USA, to detect olive oil adulteration. Laser-induced pinging (LISP) was a process where an optic cable delivered a ‘YAG’ laserlight flash into a sample, Olive Oil Times wrote in July. Researchers could then see how much light was absorbed in the sample. “LISP offers a simple, inexpensive, easy-to-use method for measuring the speed of sound in arbitrary or unknown fluids and solutions, fostering development of rapid and reliable analytical approaches to screen for food adulteration (fradulent olive oils) or intentional product contamination,” the scientists said. While the bulk of the research focused on the purity of salt water, milk and ionic liquids, the commercial use of the technique for consumable oil verification was the next obvious step in their research, Olive Oil Times said. www.ofimagazine.com 

Instrumentation.indd 3

them,” Evonik said. Up to 20 percetange points difference had been reported in digestibility levels. For example, digestibility of lysine (Lys) in pigs ranged from 44% to 63%. “Deeper understanding of DDGS and a precise evaluation of its quality allows a

more accurate feed formulation and thus a more consistent livestock performance over time,” said Ingolf Reimann, head of analytical services for animal nutrition. “Over-processing has a negative impact on the nutritional value of DDGS as the amino acids are destroyed and amino acid digestibility is lowered. If this is not considered in feed formulation, then animal performance and producer profit levels will suffer,” he added. Evonik said that Aminored 2.0 allowed separate calibrations for ground and unground material including calibrations for unground material when immediate results were needed, such as for incoming material on a weigh-bridge. When producers required a more precise analysis, such as for feed formulation, calibrations for ground material could be chosen.

Researchers identify mycotoxins in oils Researchers from Spain’s University of Almería have developed an analytical method to help detect mycotoxins in edible oils. Mycotoxins were natural substances produced by some fungi species and were found in crops, including oilseeds and olives, Olive Oil Times wrote on 4 June. They could have negative effects on human health, such as weakening immune systems, and could also be fatal. The Olive Oil Times report said the researchers used ultra-high-performance liquid chromatography-tandem mass spectrometry to identify mycotoxins in edible oils, based on a QuEChERS (quick, easy, cheap, effective, rugged and safe) procedure.

“As a result of the study, which analysed olive oil for the first time, food organisations now have data that helps to determine the maximum amount of toxins and microorganisms that can safely be consumed in olive oil,” Olive Oil Times wrote. The researchers tested for

α-zearalenol, zearalenone and aflatoxins B1, B2, G1 and G2 in 194 samples of olive, sunflower, soyabean and corn oils, according to Food Chemistry. Zearalenone was detected in 25% of the analysed samples, and G1 and G2 in 3% and 14% of the samples respectively.

Proposed ASTM standard to determine biodiesel content A proposed standard by international standards organisation ASTM International aims to offer a new way to determine biodiesel content in diesel fuel oil. The WK55232 standard focused on the use of portable, rapid, mid-infrared analysers and is being developed by ASTM’s committee on petroleum products, liquid fuels and lubricants D02l, the organisation said on 11 March. ASTM member and research and development

manager at Stanhope-Seta, Ian Mylrea, said the new standard aimed to bring a chemistry laboratory to fieldwork. “The proposed standard could support the use of a handheld, battery-powered device in what is typically a laboratory-based analyser marketplace,” said Mylrea. “This means that measurements on biodiesel content can be done close to the point-of-use, quickly and easily.” OFI – SEPTEMBER/OCTOBER 2019

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04/09/2019 10:45:56


RENDERING

Demand for US fats growing The growth of the livestock sector in the USA has led to the increased production of rendered products in the country. Over the next decade, the USA is expected to add more than 902,000 tonnes of animal fats and 937,000 tonnes of animal protein meals into the international supply chain. The global biodiesel and renewable diesel sector will utilise the larger supply of animal fats as feedstock. However, the international protein meal market is awash with an oversupply of soyabean meal. Declining US demand for meal due to a vegetarian trend in poultry feed and the US trade war with China has depressed US protein meal prices.

More fat, less protein

Last year, the US cattle slaughter figure totalled 33M head, showing a strong upswing in the cattle cycle that started in 2016. The figure represented a 2.5% increase compared to 2017 and was the largest cattle slaughter since 2011. The swine and poultry industries continued to grow as well, with hog slaughter at 124.4M head, up 2.6% from 2017. Broiler and mature chicken production was up 1.2% in 2018, resulting in nearly 9.16bn birds slaughtered, with a continuing upward trend towards heavier birds. Turkey slaughter fell 2% from 241.7M birds in 2017 to 236.9M last year, although the average annual live weight per bird also increased. In 2018, production of rendered products totalled 10.2M tonnes in the USA, down more than 2% from 2017. This is in contrast to the increase in cattle, pig and chicken slaughter. The decrease in rendering production can be partially explained by raw material being diverted to other uses, such as fresh pet food, gel bone and edible offal, along with the decrease in turkey slaughter. Total animal fats produced last year 40 OFI – SEPTEMBER/OCTOBER 2019 

USA render NEW2.indd 2

Global demand for fat as a biodiesel and renewable diesel feedstock is utilising the growing supply of rendered products from the USA. However, a surplus of animal protein meal means new markets must be found for them  Kent Swisher was 5.7M tonnes, up slightly from 2017, with tallow production up 3% from the previous year at nearly 2.7M tonnes. This increase was led by strong growth in both technical and edible tallow production. Technical tallow was up 8.6% compared to 2017 and edible tallow increased 9% during the same period (see Figure 1, p42). Inedible tallow production dropped less than one-tenth of a percent to more than 1.6M tonnes in 2018. Even though hog slaughter was up in 2018, white grease production was down 1.8% to 737,000 tonnes, lard declined 5.6% to 149,400 tonnes, and choice white grease dropped less than 1% to 587,400 tonnes, compared with 2017.

Yellow grease/used cooking oil production was more than 990,000 tonnes, up 8.5% from 2017. ‘Other’ greases were down 22% in 2018 at 285,300 tonnes. Animal protein meal production in 2018 dropped 5.5% from 2017 levels to reach 4.5M tonnes, with meat and bone meal production down 4.8% to 2.6M tonnes, poultry by-product meal down 4.9% to just over 1.3M tonnes, and feather meal down a significant 11% to 464,300 tonnes.

Imports jump

While imports of rendered products are not uncommon due to intra-North 

u

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04/09/2019 10:48:09


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RENDERING 2016

2017

Tallow

2,385.7

2,559.5

2,594.9

2,675.5

3.1

Inedible tallow

1,502.9

1,587.4

1,663.8

1,662.4

–0.1

Technical tallow

501.1

562.5

521.5

566.5

8.6

Edible tallow

381.7

409.6

409.6

446.5

9.0

1,088.8

1,113.3

1,095.3

1,054.0

–3.8

Used cooking oil

926.4

916.4

913.0

990.7

8.5

White grease

758.7

787.6

750.5

736.8

–1.8

Choice white grease

599.8

620.3

592.3

587.4

–0.8

Lard

158.9

167.3

158.2

149.4

–5.6

Other greases

341.7

336.0

369.2

285.3

–22.7

10,333.6 10,473.9

10,232.1

–2.3

Total

10,059.2

Figure 1: US production of rendered products, 2015-2018 (‘000 tonnes) Consumption

2015

2016

2017

2018

% change, 17/18

Feed, food fatty acid carryover, other

3,462.9

3,641.7

3,608.3

3,604.4

–0.1

Tallow

1,846.8

2,084.4

2,115.9

2,150.0

1.6

Poultry fat

983.7

999.4

1,000.9

979.4

–2.1

White grease

505.9

534.8

491.4

475.0

–3.3

Yellow grease

126.5

23.1

0.0

0.0

n/a

1,201.1

1,142.6

1,192.1

1,417.0

18.9

Animal fats

576.5

512.6

524.9

584.2

11.3

Tallow

195.0

150.6

176.5

219.5

24.4

89.4

99.8

80.3

60.3

–24.9

267.2

262.2

268.1

280.3

4.6

24.9

n/a

n/a

24.0

n/a

Recycled oils

624.6

630.0

667.2

832.8

24.8

Used cooking oil

569.3

630.0

667.2

756.6

13.4

Other

55.3

n/a

n/a

76.2

n/a

Total*

8,513.2

8,513.3

8,589.7

8,476.6

–1.3

Biodiesel and renewable fuel

Poultry fat White grease Other

Domestic fat use grows

Figure 2: US consumption of rendered products, 2015-2018 (‘000 tonnes) Export

2015

2016

2017

2018

% change, 17/18

Inedible tallow/ technical tallow

343.1

283.3

324.6

327.5

0.9

Yellow grease

253.0

286.2

300.2

356.6

18.8

Edible tallow

64.8

120.1

77.7

117.9

51.8

Lard

19.8

19.1

17.2

16.8

–2.1

0.4

0.8

0.4

–47.2

16.4

14.7

16.1

14.8

–7.5

1,406.1

1,615.6

1,698.8

1,869.1

10.0

Choice white grease Poultry fat Total*

0.2

Figure 3: US exports of rendered products, 2015-2018 (‘000 tonnes) *Figures for meat & bone/poultry/porcine and feather meal not included Sources: Global Trade Atlast for exports, EIA for biodiesel inputs and NASS Fats and Oils 2018 Summary 42 OFI – SEPTEMBER/OCTOBER 2019

USA render NEW2.indd 4

u American trade, recent increases in US imports of animal fats and greases is due to biodiesel and renewable diesel demand. In 2018, the overall import of fat totalled 238,700 tonnes, up close to 43% from 2017. Over the past five years, US imports of animal fats and used cooking oil have grown 133%. On the animal protein meal side, imports were 108,900 tonnes in 2018, up 30% from 2017 and close to 50% over the last five years. More than 70% of the animal protein meal imported was lamb meal from Australia and New Zealand that is used in US pet food. Additionally, 13% of imports were from EU countries, followed by 8% from Canada and 4% from Brazil. The USA also imported 420,000 tonnes of feather meal in 2018, down 35% from 2017.

Source: NRA

Poultry fat

2018 % change, 17/18

Source: NRA

2015

Source: NRA

Production

Despite domestic consumption of rendered products being steady over the last five years, increasing an average of 1%, consumption in 2018 was down 1.3% to almost 8.5M tonnes (see Figure 2, left). Last year, total animal fats used in the USA for biodiesel/renewable fuel production was 1.4M tonnes, up 19% from 2017. However, two “other” categories were not available in 2017. If animal fats use is adjusted for those two categories, which account for around 100,200 tonnes, the increase was 10.5% from 2017. At the same time, other domestic use of animal fats and used cooking oil was up 1.6% in 2018 to reach approximately 2.2M tonnes. Over the last five years, domestic use of animal fats and greases has increased 8%. The increased demand for animal fats and used cooking oil in biodiesel and renewable diesel is being driven by the California Low Carbon Fuel Standard. Under this standard, these products are preferred due to their low carbon intensity (CI) scores over other feedstocks. Used cooking oil has some of the lowest CI scores, followed by distillers corn oil, animal fats and vegetable oils. To achieve California Air Resources Board reduction mandates for CI, biodiesel production is predicted to rise 150% and renewable diesel production 230% by 2030.

Meal consumption falls

Domestic consumption of animal protein meals was a different story in 2018. Protein meal use was just under 3.5M tonnes, down almost 9% from 2017. Over www.ofimagazine.com

04/09/2019 10:48:10


RENDERING of US animal protein meals in 2018, importing 347,000 tonnes, a decline of 5% from 2017. China imported 199,000 tonnes of non-ruminant animal protein meals in 2018, up 21% from 2017 and 265% in the last five years. US exports of non-ruminant meals to Mexico dropped 13% when compared to 2017, to 112,400 tonnes.

the last five years, domestic consumption has decreased 8% while production has remained relatively unchanged. This drop in domestic consumption was mainly due to the all-vegetarian diet trend in the broiler (chickens reared for meat) industry. It is estimated that between 25-30% of US broiler operations now use all-vegetarian diets, hence the supply/ demand scenario for protein meals in the USA is critically off balance and shows the need to grow new markets for animal protein meals. Overall, exports of rendered products in 2018 totalled almost 1.9M tonnes, up 10% from 2017 and up 16% over the last five years (see Figure 3, p42). Of the total, 1M tonnes comprised protein meals and 834,000 tonnes were fats. This export growth was carried by a dramatic increase in protein meals while offset by a decrease in fat exports. Over the last five years, animal protein meal exports grew 36% while fat exports dropped 3%.

Outlook up for fats

As the cattle cycle rebounds and poultry and pork production continues to increase, there will be a greater supply of rendered products on the market. According to the US Department of Agriculture (USDA) ‘Agricultural Projections to 2028’ report, beef and poultry production is forecast to grow 10% and pork production 15% in the next 10 years. Using these forecasts, animal protein and fat production can be estimated. During the next 10 years, an increase of animal protein meals of approximately 937,000 tonnes and additional animal fats of 902,000 tonnes is projected. US demand for animal protein meals will continue to be influenced by the all-vegetarian diet trend. If this does not change, domestic demand for animal protein meals and fats for livestock feed will either stabilise or continue to decline, hence the critical need for new markets for animal protein meals. Regarding animal fats and used cooking oil, estimated demand from the biodiesel and renewable diesel industry is predicted to increase in the coming years. For instance, Diamond Green Diesel nearly doubled production in 2018 at its renewable diesel facility in Louisiana from 150M gallons (682M litres) to 275M gallons (1,257M litres) gallons, with plans to expand to 550M gallons (2,500M litres), increasing its need for feedstock to more than 2M tonnes. Therefore, the 10-year projected increase in animal fats production should be offset by added demand from the www.ofimagazine.com  

USA render NEW2.indd 5

Fat exports rebound

renewable diesel and biodiesel sectors. The projected increase in animal protein meal production, however, will need to be offset by expanding existing markets and finding new outlets for these products.

Total US fat exports were 834,100 tonnes in 2018, up 13% from 2017. Exports of all rendered fats hit a historic low of 697,000 tonnes in 2015, but have since rebounded mostly due to overseas demand from biodiesel and renewable diesel producers. In 2018, exports of used cooking oil to Europe for biofuel use totalled 169,000 tonnes, up 15% over the previous five years. In addition, exports of yellow grease to Singapore for renewable fuel production in 2018 reached 70,000 tonnes, up from 8,000 tonnes in 2017. Finally, tallow exports to Singapore for renewable diesel production, although down, totalled more than 88,000 tonnes. Inedible tallow exports to traditional markets grew in 2018. Mexico, the largest importer, increased imports by almost 8% last year, reaching 136,500 tonnes. Exports of tallow for soap production to traditional markets such as Morocco, Turkey and Nigeria grew 113%, 56% and 39%, respectively.

Proteins find home in exports

Conclusion

The pet food sector, along with livestock and aquatic feed, is pushing up demand for animal protein meals

Global demand for protein meals continued to grow dramatically in 2018, coming from the livestock feed, aquatic feed, and pet food sectors. According to the 2019 Alltech Global Feed Survey, global feed production set a new record in 2018 by increasing 3% to more than 1.1bn tonnes. The largest global feed producer is China, followed by the USA and Brazil. China is also the world’s largest importer of feed ingredients. In 2018, China produced 187.9M tonnes of feed, up half a percent from 2017. Total US meat and bone meal/poultry/ porcine meal exports were up 4.9% in 2018 from the previous year. In the last five years, exports in this category have grown 60% and are approaching 1M tonnes. The global expansion of poultry, pet and aquatic feeds has led the demand surge. As fish meal production declines, terrestrial animal protein meals are essential for diets that require animal protein. Indonesia was the largest importer

The supply of US rendered products will continue to grow as the livestock industry expands. Increasing global demand for fat as a biodiesel and renewable diesel feedstock will take up the added supply. However, additional international demand will be needed for the increased supply of animal protein meals, due to declining demand in the USA from the allvegetarian diet trend in poultry. Aside from that, the global protein meal market is awash with an oversupply of soyabean meal with carryover stocks and stock-to-use ratios at record highs. In addition, the US trade war with China has depressed US protein meal prices and distorted the world marketplace. The key for animal protein meals will be to find a niche in markets that demand these products, such as the aquaculture and pet food industries.   Kent Swisher is the vice president of international programmes at the US National Renderers Assocation. This report was published in the April 2019 issue of Render magazine OFI – SEPTEMBER/OCTOBER 2019

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04/09/2019 10:48:18


STATISTICS STATISTICAL NEWS FROM UFOP Vegetable oil prices

Following a slight rise in the first half year of 2019, the vegetable oil price index of the Food and Agriculture Organization (FAO) of the United Nations declined six points to 126 in June, due to a slide in palm and soyabean oil prices. Prices for palm oil on the Bursa Malaysia exchange fell by almost 10% over the past six months due to sluggish demand on the global market and seasonal growth in output. Prices of soyabean oil also flagged due to low export prospects and forecasts of adequate global supply. In contrast, prices of sunflower and rapeseed oil rose due to continued buoyant demand based on expectations of smaller harvests in key origin countries. The FAO index shows the changes in international prices for 10 different vegetable oils.

FAO global vegetable oil price index

EU oilseed crop

The European Commission estimates that EU oilseed production for 2019 will be 31.7M tonnes, down 4% from 2018 and 5% below the long-standing average. The decline in rapeseed is especially severe due to a drought-related 15% reduction in EU rapeseed area and poor yields provisionally estimated at 3 tonnes/ha. The EU rapeseed harvest is forecast at just less than 18M tonnes, down 10% from 2018. EU soyabean production is projected to remain stable at 2.9M tonnes. Sunflowerseed output is projected at 10.7M tonnes.

EU oilseed crop (million tonnes)

Rapeseed

The International Grain Council (IGC) has projected global rapeseed production at 69.8M tonnes for 2019, a fall of 3% from the previous year due to inadequate rainfall and distribution of rain over the growth period. The EU will produe approximately 17.9M tonnes and Canada is projected to see a significantly smaller harvest of 18.9M tonnes. However, Ukraine is expected to produce 3.7M tonnes, up approximately 1M tonnes from the previous year, due to an expanded rapeseed area. The IGC expects rapeseed stocks to reach 7.1M tonnes in 2019, the highest level in 10 years, due to rising Canadian stocks and the country’s ongoing shipment problems to China. World rapeseed supply and demand (million tonnes)

Prices of selected oils (US$/tonne)

Mintec

Feb 19

Mar 19

Apr 19

May 19

Jun 19

Soyabean

736.8

720.7

711.2

703.8

714.0

722.2

Crude palm

588.4

557.9

564.7

534.5

514.6

531.8

Palm olein

581.5

549.3

554.1

522.5

515.0

526.1

Coconut

747.8

721.7

688.1

660.0

664.0

688.8

Rapeseed

810.5

795.4

800.0

809.9

827.5

828.2

Sunflower

707.5

699.5

710.5

717.0

735.1

738.7

Palm kernel

740.8

685.6

647.1

621.0

566.9

580.2

Average

702.0

676.0

668.0

653.0

647.0

659.0

Index

166.0

160.0

158.0

155.0

153.0

156.0

44 OFI – SEPTEMBER/OCTOBER 2019

Stats Sept.Oct.indd 1

Jul 19

Mintec provides independent insight and trusted data to help the world's most prestigious brands to make informed commercial decisions. Tel: +44 (0)1628 851313. E-mail: sales@mintecglobal.com Web: www.mintecglobal.com The Union for the Promotion of Oil and Protein Plants (UFOP) represents the political interests of companies, associations and institutions involved in the production, processing and marketing of oil and protein plants in Germany

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Innovations for a better world.

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OFI September/October 2019  

OFI September/October 2019