Biofuels, a natural and sustainable alternative to fossil fuels offer economic and environmental value. Critical success factors in the biofuels business are supply chain optimization, cutting edge production technology, and balanced output channels. BTAG has optimized its supply chain by partnering with international traders who are able to hedge the market to offer the most competitive products and services available. BTAG independence in the area of feedstock means that it can work with the most successful traders on both an international and local level. The modified dry milling production technology that BTAG has accessed through its partnership with the engineering firm ACS, results in 30 percent lower production cost than conventional methods. Balanced sales channels means that BTAG knows the markets well enough that it can optimize the commodity cycles of output by serving industrial as well as fuel markets. Together, these competencies yield competitive advantage in the dynamic field of alternative fuels.
As the search for alternative and sustainable energy sources intensifies, biofuels become economically more attractive as well as risky. Biofuels become more attractive due to the dramatic price increases of oil, its limited quantity, rising demand, geopolitical security concerns, and the environment. At the same time, investment in biofuels is associated with higher risk due to fluctuating markets, the dependence of feedstock prices on crop yields and therefore weather and climate patterns and the coupling of outlet markets to factors other than the energy market. Through its varied and strong competencies, BTAG is able to establish competitive advantage in biofuels, a market that is poised for both success and consolidation.
In the continuing food/fuel debate it has become clear that while biofuels are part of the problem they are not the major cause of food price inflation. Oil, rising demand, protectionist trade policies, weather, climate change, and market speculation are much more important. Agricultural policy and hunger are political problems and must therefore be solved through political initiatives and not through market regulation. BTAG is as well convinced that rapidly evolving technology will allow biofuels to transition away from food feedstock to waste feedstock, enhancing the environmental attractiveness of this alternative energy source and contributing to an easing of the inflationary pressures on foodstuffs.
PRODUCTS
Bioethanol
Ethanol, a two carbon alcohol is used in industrial chemical and fuel applications. Approximately 60 billion liters of ethanol was produced worldwide in 2007, of which the EU25 produced less than two billion liters or about three percent. The overwhelming majority was produced from renewable vegetable sources. Ethanol produced from renewable vegetable sources or feedstocks through fermentation is called bioethanol, reflecting its biological origin and production process. Bioethanol is a natural, renewable energy source that is an efficient one-to-one replacement for gasoline. This replacement of gasoline significantly reduces carbon dioxide emissions by over 80 percent. Commercially available gasoline and ethanol blends contain 5 to 85 percent ethanol. Automobiles that have not been specially adapted for bioethanol can use mixtures of up to 15 percent ethanol. More modern flex-fuel vehicles use 85 percent ethanol, where modifications have a negligible effect on the cost of the vehicle. In Brazil only flex-fuel vehicles are sold; and in Europe, the USA and Asia flex-fuel vehicles are being introduced and are expected to become standard over the next few years.
Biodiesel
Biodiesel refers to a non-petroleum-based diesel fuel consisting of short chain alkyl (methyl or ethyl) esters, made by transesterification of vegetable oil, which can be used (alone, or blended with conventional petrodiesel) in unmodified diesel-engine vehicles. In 2007 over 6 million tons of biodiesel was produced worldwide, representing a little over 10 percent of total diesel production. Europe is the largest producer of biodiesel with about 90 percent produced there, Germany representing over 50 percent of European production, and the rest in the United States.
Electricity from biomass
Many forms of biomass can be thermally oxidized in boilers to create steam which is used to run steam turbines and create electricity. Using biomass to produce electricity reduces emissions of harmful greenhouse gases and helps to secure a sustainable supply of electricity without depleting fossil fuel reserves. While there are many feedstock sources for biomass, BTAG is involved in projects using straw, an agricultural waste product that is classified as carbon neutral since it absorbs CO2 during its growth process. Biomass technology is well established in Europe offering interesting opportunities for sustainable energy development.
With the EU initiative setting a binding target of 20 percent of the EU energy needs to be supplied by renewables by 2020, the path is set for dynamic growth. BTAG is committed to being a partner in this extraordinary development.
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