European biofuel sector suspects fraud with imported palm-based biofuels
Several European ministers asked the European Commission (EC) for an investigation during the Council of European Energy Ministers in Luxembourg on October 15, 2024, after highlighting suspicions that palm oil is being directly incorporated into Palm Oil Mill Effluent (POME) residues from wastewater, to make “authorized” biofuels in Europe. In other words, the ministers shared concerns that some non-EU biofuel suppliers could be passing virgin palm oil off as legitimate fuel in breach of EU regulations, impacting EU biofuel producers’ ability to compete and consumer trust in European biofuels.
POME is authorized in EU biofuel production partly for its methane emission offsetting qualities. However, palm oil is banned in the composition of biofuels in many EU countries. Ireland, with the support of Belgium, Germany, the Netherlands and Luxembourg, have asked the EC to take appropriate steps to monitor and regularize the sector, should the suspicions be confirmed.
Market players have commented to Expana that production volumes of POME appear to be lower than consumption levels. This has raised questions about potential fraudulent material, particularly sensitive given the parallel to Used Cooking Oil (UCO) issues from China, for which the EU has launched several investigations. They highlight that POME is predominantly generated during the palm oil milling process, with Indonesia representing a key supply source. While no developments beyond the initial documentation have been reported to Expana – which market players have described as a call to action – sources suggest this will require careful monitoring over the coming weeks and months.
Market sources indicate that any shift away from POME could increase demand for alternative biodiesel components, including rapeseed methyl ester (RME) and others, potentially impacting these markets. Some traders note that this could particularly affect European biodiesel markets during the winter months when POME traditionally plays a crucial role in the biodiesel blending pool due to its favorable properties in cold weather scenarios. Additionally, market participants point to potential implications for greenhouse gas (GHG) savings calculations, as any shift in the feedstock mix could impact operators’ ability to meet regulatory requirements.
Ajinomoto to exit US lysine, threonine business, say buyers
While relaying concerns about reduced threonine options in the US, multiple buyers have told Expana that they had been informed verbally that Ajinomoto Health & Nutrition North America will no longer supply lysine and threonine to the US in 2025. Ajinomoto’s exit would leave CJ Bio as the sole producer of threonine in North America, since ADM exited the North America threonine market in 2023. At the time of publication, Ajinomoto had not responded to a request for comment.
Ajinomoto Health & Nutrition North America manufactures lysine, threonine and tryptophan at its Eddyville, Iowa, facility. Tryptophan was not likely to be impacted, according to buyers who continued to receive offer prices for Ajinomoto’s granular tryptophan product. According to Expana’s Feed Additives Supply & Demand Pro service, Ajinomoto Health & Nutrition North America’s production capacity at the Eddyville plant is 25,000 tonnes/year for threonine and 100,000 tonnes/year for lysine. However, it has been reported in the last year that the manufacturer was only operating at 50% rates for lysine and was focusing on the contract market. According to Expana estimates for 2023, Ajinomoto would have represented about 18% of US lysine consumption (including lysine HCl and liquid lysine) and 25% of threonine consumption.
The US feed industry is already concerned about its reliance on overseas suppliers for key ingredients, particularly from China. With strained trade relations and ongoing supply chain disruptions, there is growing concern that any further complications could severely impact availability, leaving the US market vulnerable to shortages and price volatility. China accounts for about 90% of global threonine capacity. However, US Customs regulations have limited the availability of threonine as fewer sellers can import threonine to the US market. In addition, most US buyers prefer a granular threonine product as opposed to a powder product which is what is made more predominately in China.
Granular threonine spot prices were last assessed at $2.16-2.30/kg DDP US Midwest by Expana on October 22, but indications have quickly moved to $2.25-3.25/kg since then.
EC imposes registration measures on Chinese lysine imports amid anti-dumping probes
The European Commission (EC) has imposed new registration measures for lysine imports and related compounds from China into the European Union (EU). Regulation (EU) 2024/2732, published in the EU Official Journal on 25 October 2024, lays the groundwork for potential anti-dumping duties on Chinese lysine in the coming year.
Effective from October 26, 2024, the registration will last for nine months, allowing the EU to track imports and evaluate any potential retroactive duties based on the investigation’s findings. However, the final decision on imposing anti-dumping duties will depend on the outcome of the ongoing probe. Although provisional measures may be communicated by the EC in January or February 2025, the final decision is not expected before July 2025.
Regulation (EU) 2024/2732 follows the initiation of a lysine anti-dumping investigation in May 2024, triggered by a complaint from METEX NOOVISTAGO, now operating as Eurolysine. The company alleged that imports from China were being sold at unfairly low prices, causing significant harm to the European industry. The allegations also suggest that Chinese exporters may have been dumping lysine on the EU market with estimated dumping margins between 64% and 81%. The probe will cover the October 2022 to September 2023 period.
GBT restarts threonine production line at Songyuan after five-year shutdown
Global Bio-chem Technology Group Co. (GBT) restarted its threonine production line in Songyuan, Jilin, in September, according to a company source. The production line had been inoperative since August 2019.
GBT disclosed in its recent financial report that it expects the amino acids segment to remain relatively stable in H2 2024. The producer also announced plans to commence the refurbishment of its boiler facilities at Changchun Dahe in the second half of 2024. This initiative aims to further reduce production costs and introduce additional amino acid products in the coming years.
Huaheng begins tryptophan production at Qinhuangdao
Huaheng has commenced tryptophan production at its plant in Qinhuangdao, Hebei province, with multiple market sources confirming that production began in August.
In March 2024, Qinhuangdao Huaheng Biotechnology Co., Ltd., a wholly owned subsidiary of Anhui Huaheng Biological Technology Co., Ltd., announced plans to produce 6,000 tonnes/year of feed-grade tryptophan and 2,000 tonnes/year of food-grade fumaric acid for export markets by converting its existing l-alanine factory to flexible production.
Want to dig into further insights? Discover more on our insights page.
Written by Nick Wood
