2008 was a terrible year for makers of ethanol and biodiesel. Huge spikes in the prices of raw materials, natural gas and transportation and drops in the prices they received for their main products have driven many of them to cut back production, shutter plants or even seek bankruptcy protection.  In additiion, U.S. biodiesel producers saw themselves faced with an antidumping investigation by the EU that might affect their export market.

If you thought it couldn’t get any worse, hang on.

 

The National Grain and Feed Association reports that at the International Feed Expo in Atlanta on January 27, Dr. Daniel McChesney of the Food and Drug Administration spoke about studies the agency has reviewed concerning distillers’ grains, the main by-product of ethanol, and glycerin, the main by-product of biodiesel. The information presented by the FDA’s Center for Veterinary Medicine is of concern to anyone in the biofuels industry, as well as anyone who feeds livestock or purchases, processes or consumes meat and poultry.

 

The FDA has tested 45 samples of distillers’ grains from ethanol plants and in over half of them detected antibiotics, including virginiamycin, erythromycin and tylosin. NGFA later learned that the concentration of those antibiotics exceeded the level (0.5 ppm) from a letter of no objection relating to virginiamycin issued in 1993 to the predecessor of Philbro Animal Health. There are no safe levels established for the other two antibiotics in feed grain. The FDA has 15 more samples to test and intends to make its final report available this summer.

 

With regard to biodiesel-derived glycerin, Dr. McChesney stated that the FDA does not consider it to be GRAS, or generally recognized as safe, for use as animal feed. Two issues raised concerns: 

 

·         Many samples contained more methanol than the 150 ppm level recognized as safe for animal feed; and

 

·         Samples contained salt in concentrations as high as 16,500 ppm.

 

Accordingly, the FDA will be conducting a safety review of glycerin as a by-product of biodiesel. This will focus on the type of feedstock used, the manufacturing process and how the glycerin is introduced into feed. 

 

Developing markets for by-products has been a significant challenge for the emerging biofuels industry. The latest news of the FDA’s concerns about both distillers’ grains and glycerin will increase those challenges in an already difficult environment.