Red Deer, Alberta, Canada-based Blue Horizon Bio-Diesel Inc., a wholly-owned subsidiary of Blue Horizon Industries Inc., has entered into an exclusive license agreement with two undisclosed third parties to utilize a patent-pending technology to convert hydrocarbons and low-grade cellulosic materials into high-grade renewable diesel. As part of the licensing agreement, BH Bio-Diesel has agreed to pay a confidential license fee as well as a royalty per liter of each project’s net sales of renewable diesel fuel. The term of the exclusive license agreement will continue until the end of active use of the technology or the expiration of associated patents.

According to Donald Allen, president and CEO of Blue Horizon Industries, the technology licensed to the company uses a low-temperature, low-pressure, catalytically-driven process that’s able of fractionating complex carbon molecules and polymers into shorter hydrocarbons. The catalyst used is inert, until it reaches its reaction temperature, where it becomes extremely aggressive to organic materials. The low temperature reaction—between 250-360 degrees Celsius--produces no vapors, dioxins, furans or other pollutants, with no risk of coking. Additionally, the initial catalytic trigger temperature is derived not by combustion, but by viscous friction of a proprietary turbine, which also serves the dual-function of providing mixing of the various materials and pumping of the mixture through the system. The conversion of hydrocarbons and cellulose into renewable diesel is performed in a single step reaction.

“We’ve been researching different technologies for many years now and we’ve done a lot of pilot tests throughout the world,” Allen told Biodiesel Magazine.

BH Bio-Diesel plans to initially use used motor oil (hydrocarbons) mixed with paper (cellulose) and process those inputs effectively into high-quality, ultra-low sulphur renewable diesel. Allen stressed the technology’s capability of processing multiple feedstocks as an important feature behind the decision of selecting this technology.

“We’re not set on just one feedstock that we’re only able to source out during the best deal at the best time,” Allen said.

BH Bio-Diesel has secured a long-term lease on a facility located in Bruderheim, Alberta where the company will install a 750 liter-per-hour (198 gallon-per-hour) pilot unit to validate the technology, according to Allen, before incrementally scaling up production capacity to 4,500 liters per day (1,188 gallons per day) of commercial output volume at the same location over the next three years. Due to the technology’s modular design, Allen said the company is able to add additional modules when ideal conditions are met, adding that he anticipates beginning production by June next year.

“What we’re going to do is continue to build the 750 liter-per-day modules and we’re going to daisy chain them together to reach that 4,500 liter-per-hour stage and then we’ll turn around and start selling these things throughout Canada,” Allen said.

The company’s pilot plant, according to Allen, is in close proximity—within about 35 miles—of numerous transportation routes and raw material feedstocks. The outstanding location, combined with a large offloading base, is expected to allow BH Bio-Diesel the potential of opening doors to untapped sources of energy with features that make the project an attractive investment.

“We have lots of feedstock opportunities where we’re at,” Allen said. “More than we’ll ever need.”

In addition to producing renewable diesel, the technology licensed to BH Bio-Diesel is also capable of producing methyl ester biodiesel from canola oil, yellow grease and other fats and oil feedstocks, according to Allen. He also said while used motor oil and cellulose are being looked at initial inputs to use, he’s not ruling out integrating fats and oils to produce methyl esters too.

“We have about seven months here to decide our feedstock and right now we’re looking at using motor oil and newspaper in our mix, but that’s not set in stone,” Allen said. “That could change. We may want to become more of a biodiesel producer than a renewable diesel producer. We’ll see how the next seven months progress. That’s the great thing about our technology. We’re able to change the feedstock as we require it.”

BH Bio-Diesel is one of four business segments owned and operated by Blue Horizon Industries. In addition to renewable diesel, the company is also involved in oil and gas exploration, copper mining and a contracting division that specializes in the dismantling, removal and relocation of industrial facilities worldwide. When asked if the renewable diesel and biodiesel markets of focus for Blue Horizon Industries, Allen said without hesitation that his firm has its sights on serving the growing renewable diesel and biodiesel markets in Alberta for many years to come. 

“The market for renewable diesel in Alberta is huge,” Allen said. “It’s a lot larger than what we can supply here.”