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What has the furfural price got in common with the bird flu?

The Chinese poultry industry is a major consumer of maize (corn) and reports on that industry provide an insight on the Chinese maize production[1], which is the sole source of the feedstock of that country's furfural production.

In August 2013, there were heavy floods in one of the major production territories. Although the total impact of this years floods[2] have not been fully understood, we know that some furfural companies have lost their stockpiles and others will struggle to procure sufficient cobs for the 2013/14 production.

The operating rate of furfural companies in China decreased sharply from 30 June to 20 July this year, due to the heavy rain in this period [1].

Previously there had been droughts, now these floods will cause a furfural shortage and a spike in the furfural prices. At the beginning of 4Q13, we have already observed a US$200/t increase since 2Q13. In the absence of any significant new furfural production outside China, domestic Chinese issues will therefore continue to 'rule the roost' of the global furfural industry.

For our clients, we updated our article on how the pricing of furfural works in China. For owners of biomass we offer technology and market access, creating investment opportunities in the cleantech space.

Reference:

[1] See attachment "Chinese Corn Market - Aug 2013"

[2] See attachment "Chinese Floods - Aug 2013"

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Renewable platform chemical and building block

 Also know as furan-2-carboxaldehyde, fural, furfuraldehyde, 2-furaldehyde, pyromucic aldehyde or furfural:

Molecular formula: C5H4O2

Molar mass: 96.08 g mol−1

Furfural is one of the oldest biorenewable chemicals (discovered in 1821 and commercial production started in 1922). It is an industrial chemical and a precursor for a variety of (polymer) chemistry and solvents.

Furfural has been identified as one of the Top 30 Biorenewable Chemicals[1].

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Mapping-out Sustainable Strategies

Between the 1920s and 1950s, many pathways to a variety of furfural derivatives[2] were well researched, recorded and (almost) forgotten. The hydrocarbon revolution of the 1940s/50s produced many cheaper alternatives (E.g. Nylon was going to be made from furfural). Over the last 90 years, only a few chemicals have been continuously made from furfural.

However, over the last five years, we have seen a growing demand for furfural and the market is growing. DalinYebo has identified a current supply gap and future growth opportunities[3].

Old technology is available and can easily be adapted to modern production practices. Furfural production is not 'rocket science', but was in need of modernisation. The technology that DalinYebo offers is is therefore an engineering renaissance and strives to provide viable and practical solutions.

DalinYebo makes its knowledge base[3] available in order to study and or implement furfural biorefinery projects and/or to rehabilitate old plants.

References

[1] Top Value Added Chemicals from Biomass (p.12 )

[2] See downloads as well as "Map to Furfural and its many By-products"

[3] Masterkey: Unlocking the Potential for Furfural

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Furfural production to benefit from proposed bill!

Washington DC (USA), September 2013: The proposed legislation[1] (introduce by Rep. Bill Pascrell, Jr. (D-NJ) and cosponsored by Rep. Steve Stockman, R-Texas) is described as a "bipartisan legislation which provides renewable chemical producers access to a production tax credit when they create American jobs and reduce our dependence on foreign oil."

Furfural was first commercially produced in the USA in 1922. Today the USA, one of the major and growing markets, imports 100% of its demand from China, Thailand, the Dominican Republic and South Africa. Furfural is one of the top 30 renewable chemicals[2] and a building block for a huge variety of chemicals, polymers and plastics. DalinYebo has undertaken several studies in North America and we see many reason why there will be a renaissance:

Abundant feedstock:

Biomass/Agricultural residue processing (GreenEnergyPark™)

Furfural production is complimentary (bolt-on biorefining) to e.g. pulp, cellulosic ethanol, corn-processing, etc.

Creation of green jobs in rural USA

(Shovel ready) projects with solid returns, that are attractive investments (for Venture Capital, Private Equity).

Technology that is more efficient (and has options for further improvements), compared to currently used processes.

The (proposed) Legislation

According to the text of the legislation, the measure would create a production tax credit equal to 15 cents per pound of eligible content contained in renewable chemicals. Eligible content is defined to mean the biobased content percentage of the total mass of organic carbon in a chemical, as determined by ASTM D6866. The ASTM D6866 standard is used to determine the biobased content of solid, liquid and gaseous samples using radiocarbon analysis. It is the same method used by the USDA’s BioPreferred program to measure biobased content.[3]

What this means in practice and for furfural

Furfural 100 lb
Organic Carbon 62 lb
Tax credit 15cents/lb
Production tax credit per lb of furfural 9cents

For a small, medium and large furfural factory, this would equate to tax credit between $125,000 to $200,000 to $425,000 per year, respectively. - Time will tell whether these incentives will bring furfural production back to the mother country and for the benefit of green job creation in rural America.

Contact

DalinYebo Trading and Development (Pty) Ltd 

References

[1] www.house.gov

[2] Furfural: Green Chemical Building Block

[3] Biomass Magazine

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  • Biorenewable Chemicals
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Bioplastics: 500% growth = 500% more green chemicals

As a platform chemical and building block for polymers, furfural's long-term market growth will also be determined by the growth of the bioplastic market (see Bioplastics are used in an increasing number of markets). Bioplastics are used in an increasing number of markets – from packaging, catering products, consumer electronics, automotive, agriculture/horticulture and toys to textiles and a number of other segments.1 The US biomass program identified furfural as one of the Top 30 value added chemicals2. It is a chemical that is entirely made from the non-food part of agricultural crops (e.g. corncobs, olive residues, oat hulls, rice husks, sunflower husks) or from by-products of biomass that is used in the pulp & paper or sugar industries.

Currently, the major industrial users of furfural are found in the following industries: steel/foundry, pharmaceutical, agricultural chemicals, plastics and wood treatment industries. Quite a few of the companies listed in en.european-bioplastics.org/market's "ANNEX List of bioplastics companies" make already use of furfural as a building block in their bioplastics chemistry or have expressed an interest in using furfural, provided there is supply and price security.

 

References:

1 en.european-bioplastics.org/market

2 Top Value Added Chemicals from Biomass (www.nrel.gov/docs/fy04osti/35523.pdf)

 

 

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Move beyond procrastination!

Setting the Scene

South Africa (August 2013): Reported unemployment rate is now over 25% and the figures for newly created jobs are so low (or none existing?), that they are expressed in the statistics as "saved and created" jobs. South Africa's economic growth prospects are dismal with the country ranked third last in Africa – ahead of only Swaziland and Equatorial Guinea[1].

What is done about it?

A lot is written and theorised: Reports, studies, policies, frameworks and plans:

Example: Integrated Growth and Development Plans (IGDP) and Medium Term Strategic Framework

"The IGDP describes the current realities and challenges of the Agriculture, Forestry and Fisheries Sector and outlines goals, objectives and the interventions that need to be made to achieve the vision of "an equitable, productive, competitive, and sustainable Agriculture, Forestry and Fisheries Sector, growing to the benefit of ALL South Africans". The IGDP takes its cue from the twelve outcomes identified in the Medium Term Strategic Framework to address the country's key challenges. Achieving these outcomes ...[2]   

Example: Report - Green Jobs

"The primary purpose of this report is to provide a segmented view of the net direct job creation anticipated to emerge in the formal economy across a wide range of technologies/activities that may be classified as green or contributing to the greening of the economy. Supplemented by related information, both international and domestic, it is hoped that it will also assist a broad spectrum of stakeholders in embracing a green economic revolution, contribute to the prioritisation debate and to the respective strategic planning. Furthermore, by highlighting implementation challenges that are deemed key to unlock the green economy's potential, the report also brings to the fore the importance of stakeholder interventions across the board. The success of such interventions would determine South Africa's ability to capture an earlier stage within a limited window of opportunity and develop competitive advantage in specific green areas .." [3]

Workshops are conducted, the market is studied and some practical advise is given:

How to go about it (Market Study: Bio Energy [4])

As part of their "Market Studies for Renewable Energy" in South Africa, the Netherlands Embassy in Pretoria, South Africa, discusses the opportunities, makes suggestions on how to enter this business-to-business market and how to find the proper entry with the Government? It gives directions on the relevant rules and regulations and advise on how a foreign company may go about a local partner.

The bottom line: This market study provides concrete answers and makes suggestions for companies interested in doing business in South Africa.

The bio-renewable chemical sector is closely aligned with the bio-energy business!

How do you eat an elephant?

One bite at a time. We all know the saying, but we often fail to apply this lesson in our lives. These lessons can equally be applied to the development of the green economy and the jobs it will create.

DalinYebo offers practical solutions to "jump-start" biomass based enterprises that benefit small scale growers and create new rural jobs. We offer some practical solutions on our Connecting-The-Dots™ pages.

Find out more ..

 

References:

[1] Downloaded 19 Aug 2013: http://www.dakzn.org.za/president-owes-south-africas-unemployed-an-explanation

[2] Downloaded 19 Aug 2013: http://www.info.gov.za/view/DownloadFileAction?id=172748

[3] Downloaded 19 Aug 2013: http://www.idc.co.za/projects/Greenjobs.pdf

[4] Downloaded 19 Aug 2013: http://southafrica.nlembassy.org/binaries/content/assets/postenweb/z/zuid_afrika/netherlands-embassy-in-pretoria/import/the_embassy/economic-affairs/bioenergy-intro.pdf

 

 

 

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