U.S. Biofuels Exchange opens for trading

By Holly Jessen | October 14, 2010
Posted Nov. 2, 2010

Live ethanol and biodiesel trading kicked off Oct. 28 on the U.S. Biofuels Exchange, the US-BX. Registered users can post, buy, sell and make offers on biofuels for sale or biofuels wanted at www.us-bx.com, a web-based biofuels exchange.

Although there are other online trading exchanges for biofuels, this one utilizes "cloud computing" and requires no software for purchase, downloading or installation, said Eric Miller, who works in marketing and sales for US-BX. This means trades can happen from any computer. "We offer biofuels producers, brokers, blenders, distributors, importers, exporters and marketers the ability to anonymously buy and sell ethanol and biodiesel as well as the ability to make, receive and choose between multiple offers on listings," said James Kaufman, US-BX vice president.

The project took longer than originally thought to complete, Miller said. Beta testing on the system was conducted the summer of 2008 with the goal of launching that fall. The delay has allowed US-BX to make sure everything was working perfectly. "The last thing you want to do is tell everybody you are the eBay of biofuels and there's 20 different bugs the first time they use it," he said.

Having a web-based system moves biofuels trading from small regional deals to much greater possibilities. For example, it will help connect producers with overseas buyers, particularly in China. "This opens up the capacity and availability across the country and the world," he said.

In the first few days of trading more than a dozen companies signed up to use US-BX. Free trading on all listings is being offered through Jan. 1. Miller expects it to evolve over time, starting with potential buyers posting what they want, followed by producers posting what biofuels they have for sale. Overall, web-based biofuels trading will bring efficiency and cost effectiveness to a limited and outdated trading method traditionally used today. "We wouldn't be doing it if we didn't we didn't think it would be successful," he said.

Kaufman added, "We believe the US-BX will create more consistent national pricing, increased price stability as well as expanded sales and purchasing opportunities, ultimately becoming a vital factor in the overall health and growth of the entire biofuels industry."