England's new biofuels landscape

by Erica Shaffer
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Britain has been one of the late adopters in the biofuels sector. Government rhetoric on fighting climate change has produced more lecturing on using low-energy lightbulbs than action on finding alternative sources of energy. But the opening of the Ensus plant, on England’s northeastern coast, has changed all that.

The plant will use 1.2 million tonnes of feed wheat a year to produce over 400 million liters of ethanol, 350,000 tonnes of high protein animal feed, and 300,000 tonnes of carbon dioxide for use in soft drinks and food production.

Alwyn Hughes, chief executive officer of Ensus, stresses the value of all the plant’s outputs.

"We’re trying to make a positive contribution to climate change and to the need to reduce greenhouse gases," he told Biofuels Business. "We are realizing increasingly the very positive benefits of our animal feed in a climate change context. We now see ourselves as producers of green feed and fuel."


Ensus announced March 1 the shipment of its first tanker of ethanol to Shell, which is taking all of the plant’s ethanol production as part of a 10-year deal. At the time, James Smith, the chairman of Shell U.K., called Ensus "good for jobs and for the U.K. balance of payments."

"The Ensus plant is a strong step in the right direction for U.K. energy security and CO2 emission reduction," he said.

Ethanol production from the Ensus plant will be enough to meet one-third of Britain’s demand under the government's Renewable Transport Fuel Obligation (RTFO). According to Ensus, it’s equivalent to taking 300,000 cars off the road.

Under the RTFO, as amended in April 2009, 3.5% of all U.K. transport fuel has to be from renewable sources in 2010-11, rising to 5% in 2013. This will bring the U.K. in line with the E.U.’s Biofuels Directive, which sets pan-European targets.

Hughes is critical of the British government's dithering on biofuels policy.

"The U.K.'s record on renewable energy is not one that they can be proud of," he said. "It wasn't a good signal to investors to put in the RTFO and then, berfore the ink was dry, be changing it."

The government should make sure that the industry has a consistent framework, he said.

"It’s going to have to provide a reliable and dependable target," he said. "Chopping and changing the target is not the best signal to send."

As part of Ensus’s role in combating climate change, Hughes highlights the part played by the distillers’ dried grains and solubles (DDGS) produced as part Hughes is critical of the British government’s dithering on biofuels policy. "The U.K.’s record on renewable energy is not one that they can be proud of," he said. "It wasn’t a good signal to investors to put in the RTFO and then, before the ink was dry, be changing it."

The government should make sure of the ethanol process.

"The meat supply chain is 20% of greenhouse gases," he said. "A large part of that is protein crops. Protein-rich animal feed replaces soy, which often puts pressure on rain forests."

There won’t be a problem getting the U.K. compound feed trade to use DDGS, even though the product is new to many U.K. animal feed producers.

"We’re certainly selling it into the feed compound market as we speak," he said. "There’s increasing awareness around some of the climate and greenhouse gas aspects of the feed chain. I expect increasing interest. Most of us are carnivores. It’s difficult to see meat coming out of the diet. We believe our protein-rich animal feed makes a great contribution."


Hughes believes in the initial decision to stick to producing ethanol from grain rather than going for the more hightechnology processes which are now becoming available.

"The question we are trying to solve is how we make a positive contribution to climate change," he said. "Our biofuel is a very cost-effective way of making a positive contribution. So-called second-generation is challenging to make. The cost of these so-called second-generation biofuels is significantly greater than what we’re doing.

"We need to be very careful in making the assessment that second-generation is better than first," he said. "That is not to say that we shouldn’t be working on it."

The plant cost £250 million. All the employees are shareholders, and some of the money came in the form of traditional bank finance. Ensus also received financing from the energy-focused private investment houses Riverstone Holdings and Carlyle Global Energy and Power Funds.

Government policy has made financing more difficult for the biofuels sector in Britain.

"The U.K.’s ability to attract initial money is not as good as they’ve said in some of their statements," Hughes said.

Ensus is also making the best use of its CO2. The process of fermentation produces pure carbon dioxide, unlike the gas from power stations, which is mixed with water and flue gases. It’s liquefied on site by Yara International, which specializes in agricultural products and environmental protection agents, and distributed to the feed, beverage and industrial markets.

Its purity means that it doesn’t require expensive gas separation technology making it, according to Ensus, one of the lowest cost industrial-scale sources of CO.


Glencore Grain, one of the world’s largest suppliers of commodities and raw materials to industrial consumers, will find the 1.2 million tonnes of grain needed to run the Ensus plant at full capacity. U.K. traders say they’ve been buying low-quality grain, with the emphasis on keeping the carbon footprint as low as possible.

The word has gone out to growers to supply big quantities of feed wheat. Ensus won’t be taking anything that requires a premium. "Just fill the barn," is the message.

In the longer term, there may be the possibility of looking again at quality and suggesting what growers should produce for Ensus as an end market. There are hints that high-starch wheat may be an option in the future.

"In the future, improvements in wheat varieties will enhance the quantity and quality of food and fuel that can be produced from each hectare of land by wheat refining in the E.U., while developments in agricultural technology and practice will reduce GHG emissions from the cultivation of this exceptional feedstock," Ensus says on its website.

Ensus could change the shape of the U.K. grain market. The northeast region has historically been a net exporter of grain, but Ensus now will make it a net importer. The source of supply is likely to move down the country.

As Ensus is on the coast, there is also the possibility of supplying it by sea. That could mean coasters from the south of England, or from the near continent, possibly Denmark.

The plant is already making a difference to the market. Growers in the area are getting two or three pounds a tonne more for wheat than they were a year go.

Home Grown Cereals Authority economist Michael Archer could foresee big changes.

"In the longer term, if they do use 1.2 million tonnes, it makes quite a difference in terms of regional balances," he said. "Before Ensus, there was a deficit in Scotland. Big demand in the north of England would affect wheat going north."

It would draw supplies out of other markets and bring in more land.

"If people want milling wheat, they are going to have to market themselves," Archer said. "Farmers have been very good historically at making the most of land. There’s always potential in terms of rotation changes. There’s land that will come back into the frame."

He points out that U.S. farmers responded to increased demand from the biofuels industry by producing to serve that demand.

"If prices are up, it provides an incentive for people to plant more," Archer said. "We might get more imports as well."

Ensus’ Hughes doesn’t see a longterm problem with supply.

"There is a surplus of wheat in Europe," he said. "There is the capacity to grow significantly more wheat. There is plenty to go at."

In his view, government has to create the right conditions for the development of the industry. A consistent, coherent view is an essential precursor.