Sustainability, Feedstock Diversification: Marketing Biodiesel From Sustainable Sources

By Joe Gershen | March 09, 2009
Sustainability is the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs, says Gro Harlem Brundtland, an internationally renowned climate change expert. In the biodiesel industry, educating customers, partners and communities about the benefits of sustainability is fundamental to marketing success.

Climate change has already begun to wreak havoc and Mother Nature's need for balance and diversity must be addressed. The good news for business is that attending to environmental and social sustainability can improve existing markets and create new ones: green-collar job creation feeds local economies by keeping more of our energy dollars at home, and it provides energy security. Meanwhile, increased operational efficiency, through greater use of renewable resources, recycling and conservation, not only minimizes environmental impact but cuts costs.

In the biodiesel business, sustainability is related to fuel quality, feedstock diversification and production efficiency. Fuel quality, a bottom-line issue, cannot be overstressed.

Without it, consumer and industry confidence-let alone market acceptance-would not exist. Even when more sustainable feedstocks are used, if the "biodiesel" that is produced fails to meet ASTM specifications, it will be, by definition, unsustainable. Top notch quality assurance/quality control supply-chain protocols are imperative.

Feedstock diversification has recently come into sharp focus because of the high cost of traditional virgin-feedstock oils and the food-versus-fuel debate. An alarming trend is laying much of the blame for soaring global food and feed prices squarely at the feet of biofuels. But a wealth of evidence shows that the real culprits are rising fossil-fuel energy costs, the declining dollar, and surging demand for food from a burgeoning middle class in Asia and Latin America.

Commodity prices for food oils have demonstrated that insufficient feedstock diversity for biodiesel production does not make good business sense. In today's market, being able to utilize a multi-feedstock strategy can mean the difference between being in the black or in the red. It's important to understand the big picture. In spite of recent criticism, development of the biofuels industry by farmers using food crops has been highly advantageous.

Farmers have helped lay the foundation for investment by the financial community to help industry develop next-generation, sustainable feedstocks whose production does not require arable land and water or traditional agricultural means. We are only a few short years away from commercialization of groundbreaking feedstocks including algae and cellulose, to make sustainable fuels to power our cars, trucks, boats, trains, airplanes and generators, and to heat our homes and buildings.

Some companies have been using recycled and second-use fats and oils to produce sustainable biodiesel and more are exploring these feedstocks as commodity prices for more traditional feedstocks increase. At Tellurian, not only have we focused on these more sustainable feedstocks, but we have also deployed a strategy of outreach and education to help customers and partners understand the business benefits of sustainability. One example of this effort is our partnership with Golden State Foods, one of the largest diversified suppliers to the quick service restaurant industry.

For a classic closed-loop solution, we will be using biodiesel produced from used cooking oil collected from Golden State Foods customers such as McDonald's to power Golden State's delivery truck fleet. One misconception that we often encounter is that biodiesel processed from recycled materials cannot meet the same quality standards as biodiesel produced from virgin vegetable oils. That is not accurate, although extra engineering steps and oleochemical expertise are required to effectively and consistently process this material into high-quality commercial-scale fuel. But, done correctly, the economic and environmental benefits of recycling a lower-value material into a high-value energy product are obvious. This biodiesel will leave the lowest carbon footprint, provide the highest energy balance, and answer those rightly calling for food- and forest-friendly renewable fuels.

Clearly, using diverse feedstocks and understanding the characteristics of the fuel thus produced are crucial to a successful marketing strategy. Helping distributors, fleet managers, original equipment manufacturers and other key stakeholders recognize and differentiate the benefits of sustainability is equally important. Both will become increasingly crucial as the federal Renewable Fuel Standard kicks into high gear and society further comprehends the impact that fossil fuels have on climate change.

Joe Gershen is vice president of sales and marketing for Tellurian Biodiesel. Reach him at jgershen@tellurianbiodiesel.com or (310) 314-8246.
 
 
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