Will U.S. production climb to European levels

Environmental concerns, widespread diesel engine acceptance put European Union nations on top
By Mark Hamnett | January 28, 2004
Most agree that today the United States needs to maintain its commitment to clean air programs and develop a long-term energy plan that includes renewable resources.

Whether right or wrong, Canada and European Union nations have promptly embraced renewable energy and enacted meaningful legislation that will increase the usage of renewable fuels over the next 10 years. Subsequently, international automakers and diesel engine manufacturers have become involved in both developing and endorsing the use of biodiesel.

In terms of renewable fuels, Europe and North America are virtually polar opposites today insofar as Europe produces more biodiesel than ethanol. This fact can be attributed to the availability of large quantities of oilseed feedstock for biodiesel and the lack of large quantities of starch for ethanol in Europe. Moreover, the auto industry is committed to the development of high-performance diesel vehicles.

A visitor to Germany will arrive at an airport and be faced with a long line of diesel-powered limousines at the taxi stand. This is nothing new: For many years, Mercedes and Volkswagen have monopolized the diesel vehicle market and, more recently, have taken advantage of the added lubricity that biodiesel offers, using it to clean up the environment and extend engine life.

This advanced commitment to diesel engine technology has allowed Europeans to buy high-performance diesel vehicles that handle like their gasoline-powered equivalents. These modern diesel vehicles offer all the power, speed and performance of gasoline engines, but with less emissions and fuel efficiency that's easy on the wallet.

The production of fatty acid methyl ester, or raw biodiesel, is not new.

Technology leaders have been building large-scale methyl ester plants in North America for years. These production facilities serve the detergent industry, and there is plenty of evidence to support the use of these facilities to produce high-performance lubricants. In fact, synthetic esters have been used in the crankcases of tractors and off-highway equipment for years; these esters are the base for high-specification lubricants used in the aviation industry where extremes of temperature and performance are demanded. Biodiesel is a logical progession for some of these plants.

Affordable feedstock availability, some argue, remains one of the greatest challenges to the biodiesel industry in North America. Today, while most U.S. biodiesel is produced from soybean oil, recycled oils and fats are also popular because these feedstocks are cheaper than virgin oils such as soy and canola. However, in the long term, there won't be enough recycled oils and fats available to satisfy projected demand. A great number of producers will continue to rely on oilseed feedstocks.

Quality cannot be understated when it comes to biodiesel. Unlike distilled alcohol, there are many residual chemicals that affect the quality of the finished product. Using the computer maxim of "garbage in, garbage out," it is critical to treat feedstock with respect. To meet U.S. ASTM blending specifications is one thing, but perhaps raising the bar to the higher European DIN and EN specifications would require a change in handling.

The education of consumers, along with increased availability of diesel-powered automobiles and biodiesel blends at the gas station, will be critical to getting over that hurdle of regularizing usage. The current trends in truck and municipal fleets, school buses and military usage are collectively a great start. The energy bill provisions would have helped level the playing field overnight.

Last, but by no means least, is the issue of money.

As a fledgling industry with many start-up companies, lenders will certainly be conservative with financing. Proven technology, commodity risk management and solid off-take agreements will be the order of the day.

With the hindsight of witnessing the growth of the U.S. ethanol industry, it is not difficult to imagine that in 10 years time the United States could lead the world in biodiesel production.
 
 
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