According to a recent article by El Enfiteuta, soy biodiesel is alive and well in Argentina thanks to artificial hype derived from treating biodiesel and pure soy oil different fiscally. This conclusion appears in a report by the University of Buenos Aires's CESPA (an academic center focused on studies of the country's economy), which focused on the potentials of biofuels in Argentina.

We have already reported on how several Latin American countries are betting hard on biofuels as means of reducing their oil imports, which would surely help their economies. While we all know the story of ethanol in Brazil, Argentina is focusing on biodiesel because it's one of the world's largest soy producers. Argentina is currently producing about 750,000 m³ of biodiesel per year and is expected to reach 2.25 million m³ in the near future. CESPA's report showed that biodiesel might not be such a good business for Argentina; the profit margin is very low and the internal demand is not strong enough to sustain such high production figures.

Therefore, the article postulates that this industry is created for export. And this is where the taxman plays his role. Export tariffs in Argentina vary widely. In the case of pure soy oil, the tariff is 32 percent, whereas it's only 2.5 percent for biodiesel. The CESPA concludes that soy-based biodiesel would not be such a good business if it weren't for these tax exemptions that artificially alter its final potential.

Related:

• Biodiesel furor in Argentina
• Brazil & Argentina at war over biodiesel exports
• ABG POLL: Biodiesel Feedstock

[Source: CESPA via Agroinformacion]

After investing $1.8 million in a biodiesel plant (out of a planned investment of beween $35 and 50 million), Ormat Industries will be postponing further development in the facility. The idea had been to use "high-yield non-edible plants for biodiesel production" at the plant in the plant, but those plants aren't ready yet and soy prices haven't been kind to biodiesel producers. According to Globes Online, Ormat's statement said that the company will continue to focus on developing the the biological plants instead of the production facility. Ormat's stated reasons for the postponement are increased costs (e.g., soy went from $3-4 a bushel to $12 in the past year).

As IBI Investment House analyst Yuval Zehira told Globes Online, "Today, most biodiesel and ethanol companies in the world are losing money because of high commodities prices."

[Source: Globes Online]

I am going to get this out of the way right off the bat: I do not know if soy-based 2 stroke engine oils are actually cleaner burning than synthetic 2 stroke engine oil or the racing-style castor bean 2 stroke oils that are still available today. What I will say, though, is that being soy based, they are made from a renewable resource, which can't be said about petroleum-based engine oils, whether they are for 2 strokes or the more common 4 strokes. But, something recently caught my eye on a discussion board that I frequent, which was the subject of using biodiesel as a lubricant in 2 stroke engines. I got to thinking about it, and was thinking that standard vegetable oils would probably work just as well assuming the temperature was warm enough to keep them from thickening. So, I did some searching of 'teh internets', (ZOMG!) and found that there are in fact soy based oils that are designed for 2 stroke engines. I also found that before synthetic oils were developed, castor bean oils were considered the best oils to use in 2 strokes. In fact, many people still believe that they are the best. I am not going to get into that debate, because I have no idea which is better! But, I would definitely prefer to run a bio-oil if at all possible, and after doing the research, I have found that it is.

While we are on the subject, does anybody have any information on the effect that using vegetable-based 2 stroke engine oils might have on the emissions of said engine? Have there been any studies comparing synthetic 2 stroke oils versus castor oil versus vegetable based oils? Inquiring minds want to know.

[Source: United Soybean Board]

I plan on sharing some interesting bits of information that I got from some of the men behind the soy industry in general, the United Soybean Board, while I was at the SAE Congress in Detroit soon. But, one tidbit is that I was able to personally sample some automotive interior foam products made from soybean oil. There was foam destined for your seats and also some soybean oil based sound-deadening material. The products seemed fine to me, and they must be good enough for automotive use, as Ford will be using them in some of their newest models in the near future, according to Lear, the supplier which has done the most research into the technology. Here is an older press release from Lear on the subject.

FYI - they also had a soybean oil based foam football on display. That makes me wonder what the current foam footballs are made from. How many products do we currently purchase that have petroleum content in them which could be replaced by renewables? I'm betting more than you or I think.

[Source: Unites Soybean Board and Lear Corporation]

Argentina and Brazil both have large soy industries which have looked to biodiesel production in recent times to boost revenues and expand their markets. Argentina's government has enthusiastically embraced the market for soy oil based biodiesel by implementing tax and trade incentives that effectively undercut the production costs of Brazil's producers. Current estimates put Argentinean biodiesel production costs at $0.22 per litre compared to $0.50 to produce the same fuel in Brazil. The Brazilian Vegetable Oils Industry Association, are hitting back by sending a trade envoy to Argentina to convince the Argentineans to scale back their policies. Chances are the Brazilian contingent won't meet with much success though because Argentina has clearly made the decision to become a major net biodiesel exporter.

A national biofuel law comes into affect in February in Argentina to promote biofuel exports by imposing a low export tax of five percent on biofuels such as soy-based biodiesel compared to the much higher export tax of 24 percent on crude soy oil. Argentina has its eye on the large biodiesel export markets of Europe and the U.S. but domestic demand is also guaranteed to grow via the Argentinean Biofuels Act which mandates a minimum of five percent biofuels blended into the nation's petrol and diesel fuels by 2010. Brazil has similar legislation in place requiring a minimum of two percent biofuels in domestic diesel fuel by 2008.

Analysis: Biofuels exports are allowing nations with large agricultural sectors to gain a share of the global energy market and the stakes are huge. Expect Brazil to eventually match the Argentinean tax breaks to ensure their farmers share the same opportunity to export biofuels to Europe and the U.S.

Related:

• Remarks by President Bush and President Lula of Brazil on Biofuel Technology
• Bush ready to sign biofuels deal with Brazil, world's largest ethanol producer
• Africa to become the world's biodiesel supplier?

[Source: Cattle Network]

On the 17th January we posed the question "What will the majority of biodiesel be made from by 2010?", and asked you to vote for your favourite answer.

After receiving 172 votes, the results are in and it looks like algae was the big winner with 43 percent of the the votes, soundly beating out plug-in electrics and the other feedstocks listed.

Analysis: With the news that China is ramping up rapeseed (canola) biodiesel production, I think canola could be the winner in 2010 because it will take time for algae to really come on-line. By 2015 though, I think algae could clinch the title.

Be sure to vote in our next poll - Powertrain Technologies

Related:

• Chinese biodiesel industry unfazed by oil price falls
• India closing biofuels plants, Brazil opening them
• Animal fat biodiesel to top half billion gallons by 2012?

From soy we can produce about 50 gallons of biodiesel per acre whereas peanuts can yield as much as 123 gallons on the same amount of land. So why then does the U.S. generate the majority of its biodiesel from soy? The answer lies within the value of peanut oil on the global market. It's more valuable than soy which makes the conversion to biodiesel an unattractive option.

According to Farm Press, researchers at the University of Georgia are working to fix this problem. They see the answer in a peanut variety that would be grown specifically for biodiesel production. Their primary goals are that they be non-edible, high in oil and cheaper to grow than a conventional peanut. If they can meet these requirements, they would not have to compete with the world market and biodiesel will be one step closer to becoming what Phillip Badger, president of General Bioenergy, calls a part of the "silver buckshot" solution alongside ethanol.

[Source: Farm Press via Renewable Energy Access]

While most people will remember castor oil as something to use as medication, it is now being considered as a feedstock for biofuels. A number of different crops are currently used to make biodiesel, but are these crops really the optimal source? The various feedstocks for biodiesel have a widely varying biodiesel yield. Soybeans are usually the main source for biodiesel, because they are plentiful worldwide and because soybean growers have been promoting the use of soy oil in biodiesel. The cost of producing one gallon of 100 percent biodiesel is approximately $2.40 to $2.50, with 75% of the cost coming from the soy oil feedstock, which is about the same as what you would pay for off-road, on farm diesel. Clearly, it would make biodiesel more attractive if the feedstock cost could be reduced. Mississippi State is conducting research, funded by the federal government, on a number of alternative crops, both winter and summer annuals, and perennials. While one acre of soybeans yields about 50 to 60 gallons of soybean oil, castor can supply up to 141 gallons of castor oil per acre.

[Source: Delta Farm Press]