In our world today, and to an ever-increasing extent in the years to come, no product sold on the market can be developed without taking into considerations its impact on the environment.

This statement is particularly valid for a food product such as sugar, given the rising interest and expansion of markets for natural and organic products obtained through procedures, both in the agricultural and industrial stages, in which the use of chemicals and damage to the local and global environment are avoided or reduced to a minimum.

Amidst the tense, controversial discussions taking place at present within the so-called Millennium Round, its agricultural negotiations and the issue of whether to include environmental matters in these talks, cane sugar producers have many advantages to offer and arguments to show the superiority of cane as a raw material for food and energy production; as opposed to other raw materials for sugar or substitute sweetener production such as corn and sugar beets.

The aim of this paper is to attempt to present a brief summary of the potential of sugar cane as regards the environment as well as to discuss the current status of environmental legislation in effect in countries in the Latin American and Caribbean Region.

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Effects of global warming on Sugar Industry

Global Warming Facts

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TWEED’S sugar industry, which has just completed one of its shortest annual harvests, faces more bad news after the first case of a damaging fungal disease was found just outside Murwillumbah.

Experts from the Condong Mill have confirmed the presence of smut disease, which is easily spread by airborne spores, on a crop at Kynnumboon north of the Murwillumbah showgrounds.

Tweed Canegrowers Association chairman Robert Quirk said the discovery of the disease was bad news for the Tweed region’s cane industry, but affected crops could be harvested and most growers had planted smut-resistant stock.

He said Tweed growers were in a good position to eliminate the disease, which was spread by fungal spores and only slowly in cooler cane-growing regions.

“It has only been found on one farm, that’s at Kynnumboon, to date,” he said.

“We’ve had spore traps out because it’s an airborne spore that spreads the disease.

“We’ve been picking up spores on the Tweed for 12 months now but the disease hasn’t been identified before now.

“It came from the Ord (in northern Western Australia) across to the Queensland sugar industry, then spread south.

“We’ve had three years to prepare and have brought some resistant varieties down to the Tweed.

“About 50 per cent of the crop is planted with resistant varieties.

“It’s not good but we were one of the last industries in the world to get it.”

Mr Quirk said growers would need to keep a close eye on their crops but affected cane could still be harvested then replaced with resistant varieties.

Unfortunately, he said, the most resistant variety available could not stand flooding, which periodically affected crops on the Tweed.

However most growers had already planted some resistant varieties and were “in a position to take control of their own destiny next year” by planting more of that stock.

He said he could not see the infection costing growers on the Tweed much money.

NSW Sugar Milling Cooperative agricultural services manager Rick Beattie said the industry was well prepared.

“We knew it was coming,” he said. “The spores are wind blown, so it was something that we were always going to get. But we reckon we’re on top of it.”

The past two years have been tough for cane growers on the Northern Rivers.

Farmers have struggled through frosts, floods, and ongoing problems with controversial cogeneration electricity plants at the Condong and Broadwater mills.

Mr Beattie said it was hoped the disease’s effects would be minimal.

“We’ve made pretty good preparations. We don’t anticipate any production losses at this stage,” he said.

“Smut will spread to the other two mills. It’s only a matter of time.

“So we’re going to have to make hard decisions about whether to keep growing certain varieties.”

source: tweednews

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New facility in Koh Kong province will produce sugar for export to Europe from May, says manager at Thailand-based company

CAMBODIA’S first sugar plant will begin producing unrefined “brown” sugar for export to European markets early next year, an official of Thailand’s Khon Kaen Sugar Industry Public Company said Thursday.

“We plan to begin shipping sugar to European markets in May,” said Korn Posayanond, Khon Kaen’s research and business-development manager.

The firm grows sugarcane on 20,000 hectares in Sre Ambel district of Koh Kong province, and is wrapping up construction on a processing plant ahead of an official launch planned for January 25.

It will be several years before the plant is able to produce refined “white” sugar, said Korn, adding that “for now, about 25,000 tonnes of unrefined sugar will be produced annually for the EU”.

In three years the firm plans to be operating at a planned full capacity of 60,000 tonnes per year, he said.

At that time, Korn anticipates, it will supply between 10 and 20 percent of the total sugar sold in Cambodia's domestic market.

The 20,000 hectares under cultivation will yield up to 800,000 tonnes of unprocessed sugarcane per annum, he said.

The project has generated about 3,500 jobs to cut and process the crop, of which 90 percent went to Cambodians, and the remainder mostly to Thai nationals in middle and upper management, Korn said.

“People have the energy to work, but they don't have employment. Now we’ve helped them with jobs,” he said.

Construction of the US$90.6 million sugar plant began in 2007.

Thailand’s Khon Kaen Sugar Industry Public Company owns 70 percent of shares in the enterprise, and Taiwan’s Vewong Corporation holds the remaining 30 percent.

“This is the first sugar plant in the province. This investment will provide jobs to local people,” Koh Kong’s newly appointed Governor Bunlert Pramkerson said Thursday.

In June, Philip Securities assessed that Khon Kaen’s operations in Cambodia and Laos had run into “more difficulties than previously thought by … [Khon Kaen] management” due to scarcity of labour, particularly skilled workers, resulting in a lower yield at sugar plantations.

Such problems could lead the Thai firm to book losses of another 50 million baht (US$1.51 million) in 2010, Philip added, with production anticipated to remain below break even levels.

“In our view, these two overseas operations would remain at risk though KSL [Khon Kaen Sugar] has already solved the above problems, as production costs are expected to rise,” the Singapore-based securities firm said.

On August 19, Bangkok-based TRIS Rating held Khon Kaen at A- with a “stable” outlook, taking account the “regulatory and operational risks” of the company’s expansion plans into Cambodia and Laos, as well as the volatility of world sugar prices and supply.

The outlook was based on the firm’s maintaining its market position in Thailand. After 60 years in operation, Khon Kaen is the oldest and fourth-largest sugar producer in the Thai market.

source: phnompenhpost

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U.S. sugar beet growers can count on moral support from cane growers in the fight to keep Roundup Ready varieties.

The sugar cane industry has biotech aspirations of its own and is rooting for beet growers to prevail in their legal battle with environmental groups.

"We're for our brothers-in-arms in the domestic sugar industry. We want them to be successful," Ryan Weston, executive vice president of the Sugar Cane League, said in a telephone interview. The league represents cane growers in Florida, Hawaii and the Rio Grande Valley of Texas.

A federal judge in September ruled that USDA erred in deregulating Roundup Ready sugar beets in 2005 because the agency failed to adequately consider the potential environmental impacts. The judge ordered the agency to go back and conduct an environmental impact statement, putting the future of Roundup Ready beets in doubt.

About 95 percent of the U.S. sugar beet crop was planted to Roundup Ready varieties this year. The technology allows growers to spray their fields with Roundup, Monsanto's broad-spectrum glyphosate herbicide, with little or no damage to beet plants.

Beet growers have said it allows them to control weeds like never before, and most don't want to go back to conventional varieties.

The sugar cane industry isn't involved in the Roundup Ready case, but is lending moral support to beet growers -- and for good reason.

Genetically engineered sugar cane varieties are in the testing phase in the U.S., Brazil and Australia, industry officials said.

"People all over the world are looking at GE cane," Weston said.

Companies are working on genetically modified sugar cane seed that includes a variety of traits, including higher sucrose levels and improved nitrogen and water efficiency.

Earlier this year, German-based BASF and the Brazilian Sugar Cane Technology Center announced an agreement to develop new biotech cane varieties that are higher yielding and drought tolerant.

The goal is to bring sugar cane varieties with yield increases of 25 percent to market within the next decade, company officials said.

Monsanto is reportedly working on a Roundup Ready sugar cane variety that it hopes to market within the next five years.

Cane industry officials view the Roundup Ready sugar beet experience as a cautionary tale.

Weston said it's imperative that once a regulatory agency approves a biotech crop that the decision is final.

"We want to ensure that there's a good system in place ... so when you go through all the approval process we make sure that it stands," he said.

source: capitalexpress

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Once a staple issue in political campaigns, the ethanol issue has died out. At one time, both sides of the political aisle were jumping all over each other to expand subsidies to farmers in hopes of bringing down the price of gasoline and helping the environment.

While the 10% ethanol required in most gallons of gas has marginally contributed to a price reduction, study after study has shown that the negative effects are aplenty.

First, the smaller demand of corn has caused food prices to increase. And if you think it's bad here, imagine how it is overseas where families live on less than a dollar a day. A 2008 report prepared for the World Bank concluded that “the most important factor” in rising global food prices “was the large increase in biofuels production in the U.S. and the E.U.” These high food prices are tough for Americans, but downright deadly in poor African nations.

Second, the environmental changes have been a wash; after all, it takes tractors to plow corn, machines to turn it into ethanol, and trucks to ship it all.

These two main problems with the government pumping money into ethanol subsidies (besides the fact that we don't have the money) were easily predicted by free-market economists and (predictably) ignored by the political class. To sum: Economic predictions predictably ignored.

Russ Harding is a former director of the Michigan Department of Environmental Quality and the environmental policy analyst with the Mackinac Center for Public Policy (where I work). He explains,

"Ethanol prices trend higher and lower along with the price of gasoline, yet the cost of producing ethanol tends to rise with demand, since higher ethanol production exerts upward pressure on the price of corn. In a free market, corn prices might be expected to eventually fall as the market adjusts to increased demand. But because the government heavily promotes ethanol use through subsidies and regulation, the market is continually strained."

Not only that, but government subsidies mean ethanol producers have less incentive to innovate; farmers aren't making a profit on whether the product is actually worth the cost to consumers.

Still, the farm lobby (which represents mostly large factory farms) is calling for more: Recently a bill was introduced in Congress to up the ethanol requirement to 15%.

Government messing something up and pushing for more? How predictable.

source" examiner

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A northwest Iowa ethanol plant will be awarded the "outstanding business of the year" today by the Iowa Area Development Group.

Platinum Ethanol of Arthur, a privately held 110 million gallon plant, has expanded by producing corn oil extract and adding a 1.2 million bushel grain bin and a 1 million-plus bushel storage pad.

The plant, which started operations in September 2008, employs 50 people and uses more than 36 million bushels of corn.

The group also recognized Iowa Lakes Community College for distinguished leadership.

The Estherville school has developed a wind energy and turbine program to train workers for the growing wind industry. The college also has a wind turbine simulation center.

The Iowa Venture Award was also given to six other businesses:

- Allan Industrial Coatings, Allison.

- Bridges Bay Resort, Arnolds Park.

- Frontier Natural Products Co-op, Norway.

- Infrastructure Technology Solutions, Monticello.

- Majona Steel Corp., Osceola.

- NRP of Iowa, Steamboat Rock.

The Iowa Area Development Group is the economic development arm for rural electric cooperatives and member municipal electric systems.

Award nominations came from members.

The awards will be given today at the Iowa Association of Electric Cooperatives' annual meeting in West Des Moines.

source: desmoinesregister

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Local investors are putting plans together to increase at producing sugar in the country. The local investors includes Dangote Group and BUA .

Increased Sugar production is very key to the Nigeria manufacturing sector as well as in the well being of the average citizen.

This is specifically due to its usefulness as a vital raw material for the food and beverages sub-sectors, pharmaceutical and breweries. On the average, sugar constitutes about 15 per cent of the raw material utilised by these sub-sectors.

Over the years, imported sugar had been the major source of sugar in Nigeria accounting for about 95 per cent of total consumption.

In 2001, the total quantity of sugar imported into the country was 1 million tons at a total cost of N45billion (Forty Five Billion Naira). This has gone up considerably in the last few years with sugar imports exceeding US $1 billion (One Billion United States Dollars) per annum while demand remains unsaturated.

Nigeria therefore expends huge foreign exchange on sugar importation to the detriment of the national economy.
The following key issues on sugar production are noteworthy . In India, the sugar industry pays about US$3.5billion to sugarcane farmers and tax boards collect over US$450 million each annually, thus generating employment, educational and technological development.

In Brazil also, the sugar industry constitutes the major source of the national income with sugarcane farms stretching over hundreds of kilometers, across states.

Sugar is one commodity that naturally has little or no substitutes and thus, there are relatively little or no threats from substitute products. The only exception, however, are variants of the same product such as sweeteners and honey which are rarely used by manufacturers due to their high prices and inability to source the required quantities.

It is as a result of this that sugar is viewed as the most economical, appropriate and convenient raw material for the Foods and Beverages industry.

Owing to its non-spoilage nature, sugar can be stored for a long time and the demand is usually all year round.
The sugar industry has wider investment prospects as it produces essential raw material for the foods & beverage industry and Nigerians have developed substantial proclivity for their use and consumption.

The identified inhibitors of the growth and development of this industry particularly the non-privatisation of the industries and unfavourable government policies could be said to be receiving required attention.

In the last few years, government has gone ahead to privatise the primary sugar companies namely, Savannah Sugar Company (SSC), Numan; Nigerian Sugar Company (NSC), Bacita, etc. These companies which have extensive plantations produce raw sugar from sugar cane.

Their major weaknesses are their state of disrepair, limitation of installed capacity (i.e. 60,000mt/pa for SSC & NSC, Bacita), limited land size of commercial all year round production.

In the light of the above key issues, including the existing supply gap in the market place, the current high demand for sugar and the recent Federal Government’s policies to achieve self-sufficiency and discourage dependency on foreign imported goods, the Dangote Industries Limited bid for ownership and control of the Savannah Sugar Company, as the core investor.

The objectives are not only to provide high quality sugar at affordable prices for industrial users and refined sugar for domestic users, but also to provide employment, technical and agricultural education to the Nigerian populace, while making foreign exchange earnings/savings from sugar export.

The transfer of ownership to Dangote took effect in 2003. When the company assumed control of SSC, only 20 hectares of land was under cultivation, and the sugar cane plants under cultivation were not economically productive. There was low staff morale and majority of the machines were in state of disrepair.

However, since acquisition of the Sugar Plantation, DIL has completely rehabilitated the cane fields and the machinery, and has invested over N12 billion into the business in the areas of factory rehabilitation, purchase of state of the art heavy machinery, spare parts for trucks, field canal construction, farm inputs such as fertilizers, high quality seedlings, chemicals and staff emoluments. The transformation of the plant has been tremendous. DIL has increased cultivation land from 20 hectares of cane plantation in 2003 to 6330 hectares of cane fields in 2009.

At the moment, the production of sugar at the plantation is about 50,000 tonnes a year. Recently, the company constructed a 16km canal at the cost of N500 million to ensure all year cultivation of the plantation in a bid to boost its sugar cane production. The Savannah Sugar is the only sugar company that maintains a sugar cane plantation without importing any major raw materials. It generates its own power and has a work force of about 5,000 at peak season, with a monthly salary spend of N150 million.

Top 9 sugar producers
* Brazil … 30 million tons (20% of global sugar production)
* European Union … 22 million (14.7%)
* India … 20 million (13.3%)* China … 10 million (6.6%)
* United States … 7 million (4.6%)
* Mexico … 6 million (4%)
* South African Development Community (SADC) … 5.7 million (3.8%)
* Australia … 5.4 million (3.6%)
* Thailand … 5 million (3.3%)
* Russia … 2.7 million (1.8%).

source: vanguardngr

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Stakeholders in the sugar industry are hoping that the $15 million state injection to acquire vacant native land for cane farming will assist in significantly increasing cane production in the next few years.

Sugar Cane Growers Council chairman Jain Kumar said on Tuesday that they are extremely delighted that government is once again investing heavily in the sugar industry.

The government’s plan for the industry next year involves acquiring the majority of the native land which is idle for cane farming.

Prime Minister Voreqe Bainimarama revealed on Friday during his budget address that a taskforce had already begun work on facilitating the utilisation of idle land for productive use.

He said with attractive terms and conditions for both leasors and leasees the first lot of the lands will be available by the end of the first quarter of next year.

Kumar stressed that because of the land problem the industry suffered immensely in the last number of years.

Our cane production has been declining for the last number of years because of expiring leases.

“With the declining price of world sugar price and declining cane production locally both the farmers and the entire industry were heading for a disaster.

“But we are glad that this aid by the government will assist in greatly increasing the cane production.”

Kumar added that they hoped more farmers would enter cane farming from next year when new land would be made available by the government.

source: fijidailypost

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The sugar industry is likely to post robust profit in the financial year ending September 2010 on the back of an expected decline in production in the current sugar cycle (October 2009-September 2010).

According to sugar sector analysts from Antique Broking, Credit Suisse, DSP Merrill Lynch, HSBC Global Research, Morgan Stanley Research and Prabhudas Lilladher, the five most tracked sugar companies are expected to post revenue growth of over 70 per cent and a whopping 280 per cent rise in net profit in financial year 2010.

Bajaj Hindusthan is likely to turn around in 2010, with a net profit of Rs 490 crore compared to an expected net loss of Rs 20 crore in the financial year ended September 2009. Balrampur Chini, Dhampur Sugar and Shree Renuka are expected to post a net profit jump of over 200 per cent each on the back of a robust 50-100 per cent rise in net sales. Triveni Engineering is expected to post a 70 per cent rise in net profit and a 25 per cent growth in net sales.

The poor rainfall levels in sugarcane growing areas are expected to limit the sugar production to 15 million tonnes (mt) in financial year 2010. The decline will lead to a rise in sugar prices and, in turn, net profits for sugar companies expects the analyst at Morgan Stanley. Sugar prices in Delhi and Mumbai are Rs 35-37 a kg and are expected to move up further, due to rise in cost of the raw material after the new cane pricing mechanism comes into effect. The protest against the import of raw sugar by UP farmers is also likely to affect the supply and so, will also drive up sugar prices.

The analyst expects a sugar shortage in India of at least seven-eight mt in FY10, and even if consumption falls by five per cent in the current year, India could run out of sugar by August 2010. To ensure food security, India would need to import an incremental six mt in the current year. According to the analyst at HSBC Global Research, sugar prices will remain high until 2011, as India’s sugar inventory is at a 10-year low (1.7 months of consumption) after a sharp fall in production in the last crushing season (CS) 2008-09.

The production is unlikely to recover in 2009-10, as the government estimates cane production will fall by nine per cent due to low acreage, and this is likely to lead to an historical high of seve million tonnes of imports. In 2008-09 (year ending September), sugar production declined to 14.7 mt due to lower recoveries and high cane diversion to gur and khandsari units. Production is expected to increase to 15-16 mt in 2009-10, but the consumption is expected to be 22-23 mt. Hence, the demand-supply gap is expected to continue for a second year.

Going forward, sugar companies are likely to carry negligible debt during the next down cycle and have no capital expenditure plans and are, thus, less risky compared with the previous down cycle, said the analyst. The companies are taking new initiatives to diversify revenue and feedstock, which will help to arrest the earnings decline to modest levels compared to a previous down cycle. India is expected to import an additional 8.4 mt over the coming 18 months, and given an annual global export of 30 mt, this is likely to lead to a further strengthening of international prices, even from the current 28-year high.

Renuka Sugar, the largest one, has raised its expectation for FY10 sugar volumes by 15 per cent to 1.7-2 mt, primarily due to an inventory of 390 million kg. This means the company expects to sell 1.8 mt in FY10. Analysts expect Renuka Sugar, on the back of a higher sugar and alcohol volume, to maintain the earnings estimate for FY10 despite a 20 per cent rise in cane cost and lower FY09 margins.

Balrampur Chini Mills will benefit from a change in power policy of the Uttar Pradesh government. The management has indicated that it will increase volumes and unit prices for the power business. According to the analyst at HSBC Global Research, assuming that the company increases the days of operation for its power division from 110 to 220 in FY10, earnings should increase by 18 per cent. By his estimate, the company’s net profit should rise 278 per cent in FY10.

Bajaj Hindusthan is likely to show robust net profit growth in FY10, driven by a 63 per cent rise in sugar sales, 130 per cent rise in sugar mill throughput and a 39 per cent rise in sugar price, says an analyst at DSP Merrill Lynch. The key risk is four per cent excessive loss on conversion of raw sugar. Increased conversion loss is a key risk, as the company will be processing imported raw sugar for the first time and there is a precedence of over 18 per cent conversion loss by first-timers.

source: BS

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Sugar stocks have advanced on expecttaions of a likely 3 fold jump in net profit.

Bajaj Hindustan opened at Rs 217.60 and touched a high of Rs 218, up 1.5% from its previous close. The counter has clocked volumes of 96,318 shares as compared to the two-week daily average traded volumes of 1.44 million shares on the BSE.

Balrampur Chini is now trading at Rs 134, up around 1% from its previous close. The counter has witnessed trades of 111,083 shares as compared to the two-week daily average traded volumes of 1.04 million shares on the BSE.

Dhampur Sugar is now trading at Rs 131, up around 3% from its previous close. The counter has seen trades of 55,858 shares as compared to the two-week daily average traded volumes of 247,802 shares on the BSE.

Renuka Sugar is now at Rs 231, up 0.5%. The counter ahs seen trades of 68,800 shares as compared to the two-week daily average traded volumes of 629,047 shares on the BSE.

Triveni Engineering and Industries is now 1% higher at Rs 104. The counter has seen trades of 15,965 shares as compared to the two-week dailya verage traded volumes of 245,156 shares on the BSE.

The sugar industry is likely to post strong profit in this financial year on the back of an unexpected decline in production in the current sugar cycle (October 2009-September 2010).

source: BS

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Cosan, (CZZ.N) Brazil's largest sugar and ethanol group, has closed a deal to buy the local Petrosul chain of filling stations based in Sao Paulo, the local Web site iG said on Wednesday.

Cosan said it did not comment on market rumors when asked by Reuters for its response to the story.

The report said that Petrosul has 90 filling stations which Cosan plans to operate under the Esso brand name. Cosan bought oil major Exxon Mobil's (XOM.N) assets under the Esso name in 2008 for about $1 billion.

The report gave no estimate for the value of the Petrosul sale.

source: reuters

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It can take a lot of water to make ethanol. (Photo courtesy of the National Renewable Energy Laboratory)

The ethanol industry and the government want more ethanol to be produced.

They say the homegrown biofuel is a good way to move away from foreign oil. But a new government report says many ethanol refineries are putting a strain on another natural resource – water. Mark Brush has more:

The report from The GAO

Ethanol, biodiesel linked to water pollution

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A formerly idled ethanol plant in Steamboat Rock will likely emerge from bankruptcy this week with a new owner.

A bankruptcy judge will decide Friday whether to turn Pine Lake Corn Processors over to a new partnership.

Pine Lake has about $12 million in outstanding debt after it locked into high-priced corn in summer 2008, then watched ethanol prices tumble.

The plant filed for bankruptcy in December 2008, and went idle for a month.

Pine Lake employs more than 30 people and uses about 12 million bushels of corn to make about 30 million gallons of ethanol a year.

source: desmoinesregister

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Previously the ethanol content of gasoline could be no more than 10 percent. Now it appears that the Environmental Protection Agency will increase that percentage to 15 percent.

Anglers and boaters are concerned about the increase because even the 10 percent blends have cause havoc with many marine engines.

The Boats.com website reports, “According to the National Marine Manufacturers Association (NMMA), none of the 18 million boats currently in operation in the U.S. have been designed, certified or warranted to run on anything above E10 fuel, which contains up to 10 percent ethanol.”

The same site reports, “fuel-related problems have become a plague for owners of both outboard and inboard marine engines. Carburetors and fuel filters are clogged with deposits, fuel tanks are contaminated with water, fiberglass fuel tanks are dissolving, and engines are being ruined from running too lean on pure ethanol that “phase separates” out of water-laden fuel.”

It appears that the opposition of marine interests against the increase in ethanol has fell on deaf ears. The EPA release implies that it will approve E15 for 2001 and newer vehicles by mid-2010 unless data reveal problems. The NMMA argues that no decision should be made on E15 until all independent scientific studies confirm that it is compatible with both on-road and non-road engines.

source: examiner

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The Environmental Protection Agency took a couple of big steps Tuesday toward putting more ethanol in our gas tanks:

The agency said it was clear that raising the current limit of 10 percent ethanol in gasoline to 15 percent was needed to meet federal requirements for more ethanol production.

And it said, based on research so far, that vehicles starting with the 2001 model year appeared able to use the 15 percent blend without being damaged.

The EPA stopped short of approving the higher blend, something ethanol trade groups had hoped it would do this week. But the EPA said it was inclined to do so by next June, pending the results of another test being conducted by the U.S. Department of Energy on the effects of longer-term use of the 15 percent ethanol blend.

Growth Energy, which is seeking the approval for a higher blend, said it would have preferred a final decision but was optimistic that the agency would eventually approve its request.

“It’s basically a positive answer and a very constructive way forward,” said Wesley Clark, the retired Army general who is co-chairman of Growth Energy.

The ethanol industry has struggled during the recession, particularly getting financing, and earlier this year nearly two dozen plants were idled. Its proponents say that a 15 percent ethanol standard is crucial because it would guarantee producers a bigger market, which in turn would make lenders more willing to finance them.

The higher blend also would help meet renewable-fuel standards approved by Congress. That legislation mandates that an increasing amount of ethanol be produced each year, from 9 billion gallons last year to more than 30 billion gallons in 2022.

But the idea of using higher blends has been criticized by automakers and others, who say they could damage cars, trucks and other equipment including lawnmowers. Those skeptical of the higher ethanol levels praised the EPA for waiting until additional testing is completed.

The Alliance of Automobile Manufacturers said the testing was needed to ensure that allowable ethanol blends would not harm vehicle emissions, performance and durability.

“We are pleased that EPA recognizes the importance of making decisions based on sound science,” said Dave McCurdy, chief executive officer of the auto group. “Any decisions on blends higher than E10 for the existing fleet should be postponed until adequate testing results are available.”

There are more than 7 million “flex fuel” vehicles on the road, equipped to use E85 — a blend of 85 percent ethanol and just 15 percent gasoline. But that leaves more than 200 million cars and trucks that were mostly designed to use no more than E10 — the 10 percent ethanol blends now widely available.

Ethanol makers pushing for the 15 percent ethanol blends say there has been sufficient research to show that the higher blend is safe. And the Renewable Fuels Association, another trade group, said any delay would continue to chill investment in the ethanol industry because of the uncertainty. It urged the EPA to take an intermediate step until it made its decision on E15.

“To avoid paralysis by analysis, EPA should immediately approve intermediate ethanol blends, such as E12,” Bob Dinneen, the group’s president, said in a statement.

But opponents of any higher ethanol standard expressed concern Tuesday about the logistics of moving to multiple standards, such as E10 for the 2000 model year and earlier, and E15 for 2001 models and after.

Under such a standard, 70 million older vehicles would be limited to E10. And boats and equipment such as lawnmowers probably would be excluded from any ethanol blends above E10.

That could mean gas stations would need additional pumps for different ethanol blends — or blender pumps that could dispense fuel with different ethanol levels.

The American Petroleum Institute, which represents the oil industry, said Tuesday that the EPA needed to consider all the problems that allowing different ethanol blends could cause.

The EPA said that it will take steps to address that issue with such steps as labeling fuel pumps to ensure that consumers use the proper blends for their vehicles and equipment.

Kris Kiser, executive vice president of the Outdoor Power Equipment Institute, said studies showed equipment with small engines such as chain saws and weed trimmers could have problems with blends higher than E10. Having different blends available, he said, will inevitably lead to mistakes.

“We remain deeply concerned,” he said.

source: kansacity

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