Biofuel – Fact or Farce HINNER KÖSTER (Ph.D.). Fiber to cellulosic ethanol?? Cellulosic...

Biofuel – Fact or Farce

HINNER KÖSTER (Ph.D.)

• Fiber to cellulosic ethanol??

Cellulosic Conversion ??

More worries about food versus fuel

“Boosting U.S. ethanol production would mean higher food prices, both domestically and across the globe”

Dick Bond, Tyson CEO

0

2

4

6

8

10

12

14

Year

Eth

an

ol,

bil

lio

n g

all

on

sUSA Ethanol outlook

(25% in 2007/08)

(Reach level in 2009/10)

New projections – baseline increase

CBOT MARCH MAIZE PRICE

USA DDGS Production Outlook

U.S. DDGS Production from Ethanol?

14

9.0

3.531.8

0.320.9

0

5

10

15

20

25

(MM

T)

USA potential DDGS exports

1.51.9

2.32.9

3.7

4.6

5.7

7.2

8.9

11.2

1.2

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Year

MM

T

Source: The ProExporter Network®

Relationship between US Maize and DDGS pricesSource: CARD, Iowa State University

DDGS Usage ─ All used by livestock (nothing wasted) Swine ─ 8.7 million tons

Poultry ─ 6.9 million tons

Dairy ─ 16 million tons

Beef ─ 39 million tons

Total ─ 70.6 million tons

“Biofuels provide us with a historic chance to fast-forward growth in many of the world’s poorest countries, to bring about an agricultural renaissance and to supply modern energy to a third of the world’s population”

Jacques Diouf, Director General: UN Food and Agricultural Organisation

BIOFUELS SA

BIOFUELS SA

• LEGISLATION IS THE KEY TO BIOFUEL PRODUCTION IN SOUTH AFRICA

• NO LIKELY DIRECTION IN THE SHORT TERM• COMPETITION WITH FOOD?• ECONOMIC VIABILITY?• HEALTH/ENVIRONMENTAL/ECOLOGICAL

AFFECT?• JOB CREATION, SMALL SCALE BUSINESS

DEVELOPMENT, 2ND ECONOMY, POVERTY ALLEVIATION?

• CONTRIBUTING TO NATIONAL FUEL SECURITY?– PRICE, VOLUMES

Maize-to-Ethanol: Total Supply Chain Cost Comparison (Source: Absa Agribusiness / Agrista)

R 520,000,000

R 540,000,000

R 560,000,000

R 580,000,000

R 600,000,000

R 620,000,000

R 640,000,000

R 660,000,000

R 680,000,000

Bergville Bethlehem Bothaville Ermelo Sasolburg Secunda

Location

Total Supply Chain Cost Comparison

Total Maize Procurement Cost Total Ethanol Transport Cost Total DDGS Transport Cost

0

1

2

3

4

5

6

7

8

2002/3 2003/4 2004/5 2005/6 2006/7

YEAR

YELLOW WHITE

SOUTH AFRICAN MAIZE CONSUMPTION

Impact of Maize Price on Planting BehaviourSource: Safex, Crop Estimates Committee

Maize Price and Ha

-

500,000.00

1,000,000.00

1,500,000.00

2,000,000.00

2,500,000.00

3,000,000.00

3,500,000.00

4,000,000.00

1998/1999 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007

Year

Ha

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

1,600.00

1,800.00

Pri

ce

Maize ha Maize price

GRAIN PRICES / GRAANPRYSE

50100150200250300350400450500

2006

/01/

0320

06/0

2/06

2006

/03/

1320

06/0

4/17

2006

/05/

1920

06/0

6/22

2006

/07/

2620

06/0

8/29

2006

/10/

0220

06/1

1/03

2006

/12/

0720

07/0

1/12

2007

/02/

1520

07/0

3/21

2007

/04/

2520

07/0

5/29

2007

/07/

0220

07/0

8/03

2007

/09/

0620

07/1

0/10

2007

/11/

1320

08/0

1/02

2008

/02/

0520

08/0

3/31

2008

/07/

3120

08/0

9/31

$/t

USA Yellow Maize / VSA GeelmieliesUS HRW Wheat / VSA HRW Koring

A - Actual prices / Werklike pryseB - Futures prices/Termynpryse

A B

MAIZE / MIELIES

400

900

1400

1900

2400

2900

2000

/01/

04

2001

/01/

04

2002

/01/

04

2003

/01/

04

2004

/01/

04

2005

/01/

04

2006

/01/

04

2007

/01/

04

2008

/01/

04

R/t

on

Import parity prices / InvoerpariteitspryseExport parity prices / Uitvoerpariteitspryse

WORLD MAIZE POSITION WêRELD MIELIE POSISIE

600620640660680700720740760780800

2003/04 2004/05 2005/06 2006/07 2007/08

Mil

Ton

Maize production / Mielie produksie

Maize consumption / Mielie v erbruik

Source/Bron: USDA

US No3Y MAIZE PRICE /

VSA No3Y MIELIEPRYS

400

800

1200

1600

2000

2400

2800

320006

-Nov

-97

01-N

ov-9

8

05-N

ov-9

9

03-N

ov-0

0

05-O

ct-0

1

04-O

ct-0

2

07-N

ov-0

3

05-N

ov-0

4

04-N

ov-0

5

03-N

ov-0

6

15-J

un-0

7

07-S

ep-0

7

30-N

ov-0

7

R/t

Against the actual exchange rate/ Teenoor die werklike wisselkoers

Against a fixed exchange rate of R4.82 as on 06/11/97 / Teenoor 'n vasgestelde wisselkoers van R4.82 soos op 06/11/97.

YELLOW MAIZE PRICES RANDFONTEINPRYSE VAN GEELMIELIES GELEWER IN RANDFONTEIN

PRICES OF YELLOW MAIZE DELIVERED IN RANDFONTEINMei/May 2005 - Februarie/February 2008

300.00

500.00

700.00

900.00

1,100.00

1,300.00

1,500.00

1,700.00

1,900.00

2,100.00

2,300.00

2,500.00

2,700.00

2-M

ay-0

52-

Jun-

052-

Jul-0

52-

Aug-

052-

Sep-

052-

Oct

-05

2-No

v-05

2-De

c-05

2-Ja

n-06

2-Fe

b-06

2-M

ar-0

62-

Apr-0

62-

May

-06

2-Ju

n-06

2-Ju

l-06

2-Au

g-06

2-Se

p-06

2-O

ct-0

62-

Nov-

062-

Dec-

062-

Jan-

072-

Feb-

072-

Mar

-07

2-Ap

r-07

2-M

ay-0

72-

Jun-

072-

Jul-0

72-

Aug-

072-

Sep-

072-

Oct

-07

2-No

v-07

2-De

c-07

2-Ja

n-08

2-Fe

b-08

Datum/Date

R/to

n

Invoerpariteit ARG YM

Invoerpariteit VSA YM

SAFEX YM

Uitvoerpariteit VSA YM

01/05/05 - 30/04/06 01/05/06 - 30/04/07

Source: Grain SA

1. DOMESTIC PRICES PER SAFEX (R/t) (a)

1. PLAASLIKE PRYSE VOLGENS SAFEX (R/t) (a)

Futures prices/Termynpryse (2008/02/15)

Commodity 2008/03 2008/05 2008/07 2008/09 2008/12

White maize R1736.00/t R1655.00/t R1598.00/t R1630.00/t R1679.00/t

Yellow maize R1803.00/t R1706.00/t R1673.00/t R1717.00/t R1728.00/t

Ethanol to DDGS

Starch 72.6 % Maize Oil 4.3 % Protein 9.8 % NDF 9.0 % Minerals 1.6 %

Nutritional Components of Yellow Maize (DM base)

Average Yield of Maize in Dry-Milling Ethanol Production

• Ethanol (40%)• DDGS (30%)• CO2 (30%)

Ethanol Production(Fermentation process)

Slurry Mash"cooking"

GrindingLiquefaction

TanksFermentation

Ethanol

Distillation

Beer Well

Dryer DrumDDGS

SyrupEvaporator Centrifuge

Wet Cake

H2O

Alpha-amylase

SteamGluco-amylase

CO2

WDG

CDS

• Low in starch

• Moderate in fat

• Moderate in protein

• High in fiber

• High in phosphorous

Nutritional Characteristics of Distillers Grains

Maize 85-908-10 7-10 3.5-4.0DDGS 85-90 28-35 35-43 10-12WDGS 30-35 28-35 35-43 10-12ModDG 42-50 28-35 35-43 10-12CDS 25-35 20-25 >5 20-25

Fat level variable: 8-14%• dependent on solubles amountS level important to watchP in DGS: 0.75-1.0% P

DM CP NDF Fat

Byproduct composition (%DM)

Problem 1Lysine and Methionine content of DGS

vs other protein ingredients

Problem 2 – Nutrient Variation-Statistics for range of DDGS samples

analysed by NIR-

Parameter Range Samples R2 SECVMoisture 2.8 – 16.9 303 0.981 0.57

Protein 23.4 – 38.5 311 0.987 0.53

Fat 6.6 – 12.6 124 0.913 0.40

Ash 3.0 – 6.7 126 0.828 0.39

ADF 9.9 – 13.9 34 N/A 0.65

NDF 28.3 – 32.3 34 N/A 0.81

Crude Fiber 5.4 – 8.2 34 N/A 0.54

Starch 6.5 – 9.5 104 0.653 0.46

Comparison of the Nutrient Content of Maize Distiller’s Grains and Maize Condensed

Distiller’s Solubles

0

5

10

15

20

25

30

35

Grains Solubles

DM, %CP, %Fat, %CF, %Ash, %Ca, %P, %

Nutrient composition and protein digestibility of DDGS based on solubles level

Solubles levela, % of DDGS mix (DM)

Item 0 5.4 14.5 19.1 22.1DM, % 95.5 92.1 90.8 89.3 89.6CP, % 32.1 31.9 31.5 30.7 30.9Fat, % 6.9 8.9 10.4 12.7 13.3NDF, % 36.8 34.9 31.9 30.3 29.3CP Digestibilityb 97.2 97.4 97.9 97.9 97.9a Solubles level calculated using % NDF of solubles (2.3%) and 0%

solubles DDGb In situ total-tract protein digestibility

Nutrient Composition of DDGS8 Ethanol plants sampled (5MN, 2SD, 1NE)

Item NRC Mean Range

Crude Prot. % 27 - 33 30.1 26 - 36

EE % 7 – 13 10.5 4 - 19

NDF % 31 – 47 48.8 39 – 62

S.R. Harty, J-M Akayezu, J>G> Linn and J.M. Cassady 1998

Which DDGS has the best Quality?

Not all DDGS are created equal

A B C

NutritionColor

Particle size Flowability

DDGS Varies in Nutrient Content and Digestibility, Color, and Particle Size Among USA Sources

Protein Characteristics of DDGS8 Ethanol plants sampled (5 MN, 2 SD, 1 NE)

Item NRC Mean RangeCrude Prot. % 27 – 33 30.1 26 – 36 --------% of CP-------Soluble CP ---- 9.7 1 – 22 ADICP 10 – 23 8.0 1 – 19 RUP 42 – 51 53.4 41 – 68 -------% of RUP-------RUP Dig. 80 82.2 72 – 94

S.R. Harty, J-M Akayezn, J.G. Linn and J.M. Cassady, 1998

Total and digestible Lysine composition (%) and the color of 8 DDGS samples (as-fed basis) (JAPR: Research report)

Color1 Digestible Lys

Sample L* b* a* (%)

1 62.9 28.4 7.6 0.66 2 61.5 26.6 6.1 0.643 57.4 21.3 5.8 0.614 57.5 20.5 6.9 0.595 51.2 13.9 5.7 0.526 49.5 11.2 4.1 0.477 48.0 8.82 4.3 0.378 47.9 9.3 4.4 0.18

Color [lightness (L*), redness (a*), and yellowness (b*)] measured with Minolta Chroma Meter CR-300

DDGS LOWDDGS AVEDDGS HIGH

3017 9

454239

357

ADIN NDF Starch %CP %DM %DM

DDGS LOWDDGS AVEDDGS HIGH

3017 9

454239

357

ADIN NDF Starch %CP %DM %DM

DDGS LOWDDGS AVEDDGS HIGH

3017 9

454239

357

ADIN NDF Starch %CP %DM %DM

DDGS LOWDDGS AVEDDGS HIGH

3017 9

454239

357

ADIN NDF Starch %CP %DM %DM

DDGS LOWDDGS AVEDDGS HIGH

3017 9

454239

357

ADIN NDF Starch %CP %DM %DM

DDGS LOWDDGS AVEDDGS HIGH

3017 9

454239

357

ADIN NDF Starch %CP %DM %DM

Wheat Bran = R1500/tonDDGS/Chop = R1700/ton

DDGS LOWDDGS AVEDDGS HIGH

3017 9

454239

357

ADIN NDF Starch %CP %DM %DM

Wheat Bran = R1500/tonDDGS/Chop = R1700/ton

DDGS LOWDDGS AVEDDGS HIGH

3017 9

454239

357

ADIN NDF Starch %CP %DM %DM

Wheat Bran = R1500/tonDDGS/Chop = R1700/ton

DDGS LOWDDGS AVEDDGS HIGH

3017 9

454239

357

ADIN NDF Starch %CP %DM %DM

Wheat Bran = R1500/tonDDGS/Chop = R1700/ton

DDGS LOWDDGS AVEDDGS HIGH

3017 9

454239

357

ADIN NDF Starch %CP %DM %DM

Wheat Bran = R1500/tonDDGS/Chop = R1700/ton

DGS in Feedlots

INTEGRATED TECHNOLOGYSelf sustaining closed loop system – environmentally friendly

Waste Management

Ethanol and DGS Production

Beef and Manure production

DGS use in feedlots

• Inclusion < 15% (0.9-1.4 kg): protein

• Inclusion > 15% (1.8+ kg): energy

Studies Used - WDGS

Experiment Year Diet DM % WDGS Hd/TxSindt et al. 1990 0, 5.2, 12.6, 40 40Larson et al. 1991 0, 5.2, 12.6, 40 40Ham et al. 1992 0, 40 32Fanning et al. 1997 0, 30 20Vander Pol et al. 2002 0, 20, 40 10Vander Pol et al. 2004 0, 10, 20, 30, 40, 50 48Buckner et al. 2005 0, 30 50Corrigan et al. 2005 0, 15, 27.5, 40 40Luebbe et al. 2005 0, 15, 30 32

Linear P < 0.01

Average Daily Gain

y = -0.0005x2 + 0.0279x + 3.4669

0

1

2

3

4

5

0 10 20 30 40 50 60

AD

G, l

b

Quadratic P < 0.01% WDGS (DM basis)

WDGS Level ADG (lb)0 3.4710 3.7020 3.8330 3.8740 3.8150 3.66

Predicted Values

Feed Conversion

y = 0.0003x2 - 0.0309x + 6.4367

012345678

0 10 20 30 40 50 60

F:G

WDGS Level F:G 0 6.4410 6.1620 5.9530 5.8140 5.7450 5.73

Predicted Values

Linear P < 0.01Quadratic P = 0.09

% WDGS (DM basis)

Feeding Value of WDGS

y = -0.49x + 150.9

80

90

100

110

120

130

140

150

0 10 20 30 40 50 60

Fee

din

g V

alu

e (%

of

mai

ze)

WDGS Level FV % Corn

10 14520 14230 13740 13150 126

Predicted Values

% WDGS (DM basis)

Studies Used - DDGS

Experiment Year Diet DM % DDGS Hd/Tx

Benson et al. 2005 0, 15, 25, 35 48

Bremer et al. 2005 0, 30 60

Buckner et al. 2007 0, 10, 20, 30, 40 40

Ham et al. 1994 0, 40 32

May et al. 2007 0, 25 96

Linear P < 0.01

Average Daily Gain

y = -0.00048x2 + 0.02466x + 3.4325

0

1

2

3

4

5

0 10 20 30 40 50

AD

G, l

b

Quadratic P < 0.01% DDGS (DM basis)

DDGS Level ADG (lb)0 3.4310 3.6320 3.7330 3.7440 3.65

Predicted Values

Cubic P = 0.54

Feed Conversion

y = 0.000521x2 - 0.0259x + 6.6201

012345678

0 10 20 30 40 50

F:G

DDGS Level F:G 0 6.6210 6.4120 6.3130 6.3140 6.42

Predicted Values

Linear P = 0.07Quadratic P = 0.02

% DDGS (DM basis)Cubic P = 0.97

Feeding Value of DDGS

y = 0.0575x2 - 4.625x + 193.258090

100110120130140150160

0 10 20 30 40 50

Fee

din

g V

alu

e (%

of

mai

ze)

DDGS Level FV % Corn

10 15320 12330 10740 100

Predicted Values

% DDGS (DM basis)

Relationship between US Maize and DDGS pricesSource: CARD, Iowa State University

Feeding value of wet vs. dry distillers grains (Ham et al., 1995)

WDGS DDGS

Control Lowa Mediuma Higha

Daily feed, kg 11.0bc 10.7b 11.5c 11.3cd 11.8d

Daily gain, kg 1.47b 1.68c 1.66c 1.68c 1.71c

Feed/gain 7.69b 6.33c 6.94d 6.76d 6.90d

Improvement (vs Control), %

Diet -- 21.5 ………….11.9 (avg.)………..

Distillers vs. Maize -- 53.8 ………….29.8………………

aLevel of ADIN, 9.7, 17.5 and 28.8%.b,c,d Means in same row with different superscripts differ (P<0.05)

Wet Byproducts for Cattle Cost of transporting water

Superior Feeding ValueDry Byproducts for Cattle Storage

Transport over long distance

In Summary…

• Ethanol industry has major influence on overall global agricultural economy

• USA exports of DDGS are rapidly increasing as end users better understand the use of DDGS in their feeding operations

• Ethanol production process is not an exact science, there will be variability

• Variability can (should) be managed and evaluated• Quality control measures can be implemented to ensure a reliable

supply of quality DDGS• Need industry standardized and quick testing of DDGS• Match your needs with DDGS quality

In Summary…• DGS low in starch

– Reduces potential of acidosis

• Highly digestible fibre (40-45% NDF) and yeast cells (3-5%)– Stimulate rumen fibre digestion– Compliment high starch maize diets

• When fed at limited levels (<40%)– Energy content 120-130% of maize

• Reasonable source of undegradable protein (UDP) source – UDP quality and bioavailability could be a problem

• Feedlot cattle find DDGS very palatable

Thank You