Biogas rises and Ethanol falls

Edward Guinness from Guinness Asset Management analyses the respective rise and fall of Biogas and Ethanol

Biogas comes of age

As biogas becomes big business, it’s creating new opportunities for all involved in managing food waste. Biogas companies face a number of challenges that need to be met Waste Management World

This is a well-written piece about an exciting part of renewal energy. This is clearly an attractive area: It takes advantage of food waste that would otherwise go into landfill and it is therefore a win/win situation. It is also cheap to produce biogas. There is only a finite amount of waste, so the biogas industry’s potential size is limited.

The article also discussed the prospect of purpose-grown crops for biogas. It suggests that this has potential. However,  purpose grown crops push up food prices, which  will meet significant political and popular resistance.

The other problem with biogas is that there aren’t many listed investments, so it is a difficult sector in which to invest.


Ethanol Falls Second Day on Signs of Easing Production Costs

Ethanol futures fell a second day in Chicago on speculation rain and cooler weather in the Midwest is helping the corn crop and will reduce production costs - Bloomberg

This article is  of interest to those who might be investing in ethanol refining companies. The trouble with the ethanol industry is that investors are dealing with two highly volatile independent commodities. Ethanol prices are  independent from the price of corn.

The corn price is linked to the weather, the success of the annual crop and how much corn was planted.

Lowering of subsidies for ethanol in the US is difficult because the ethanol price is linked to the gasoline price, because some of the key ethanol production is in swing states such as Iowa.



Edward Guinness

Edward Guinness 

Edward joined Guinness Asset Management in January 2006 and is co-manager of the Guinness Alternative Energy Fund and executive manager of the Guinness Global Thematic Fund.

Prior to joining Guinness Asset Management, Edward worked from 2002 as a merger arbitrage analyst for the Arbitrage Associates Fund at the Tiedemann Investment Group in New York. In 1998 he joined HSBC Investment Bank, where he worked in the Corporate Finance Department in the Energy & Utilities Team and in the Telecoms & Technology Team. Edward Graduated from Cambridge University with a Master’s degree in Engineering and Management Studies.


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