Feedstock Flexibility: Key to Future Profitability?

By Pete Moss | January 18, 2012

It has been said that feedstock flexibility is the key to making money in the biodiesel industry. It’s déjà vu all over again with the biodiesel tax credit lapsing just as biodiesel plants have established new production records. Whether or not the biodiesel tax credit is reinstated, the renewable fuel standard (RFS2) sets real production mandates that are binding to obligated parties. Still, process flexibility and feedstock procurement strategy separate the highly successful operation from the highly stressed biodiesel producer.


When choosing feedstock, there are many factors to consider such as price, quality, availability and ability to meet product specifications. Understandably, higher quality feedstocks are typically more costly. Refined soybean oil is more expensive than degummed. Tallow is more expensive than yellow grease and so on. But why is soybean oil more expensive when it is the most abundant oil in the marketplace? Quite simply, the answer resides in the processability of the feedstock and the inherent characteristics within the oil or fat that impacts cloud point and cold filter plugging point (CFPP). 


It cannot be disputed that what the industry needs now more than anything else is an emerging feedstock that is less costly than soybean oil with equivalent or better cloud point characteristics. Could corn oil be that feedstock? Currently trading at more than a 20-cent discount to soybean oil per pound, there will be at least twice as much corn oil on the market in 2012 compared to 2011. Plus, corn oil has a cloud point typically lower than soybean oil, even though their CFPP is similar. The cloud point of corn oil is approximately minus 3 degrees Celsius, nearly 5 degrees better than soybean oil. This can be an advantage when selling to obligated parties who have more stringent cloud point requirements during winter months.


Not only is it imperative to secure sufficient quantities of feedstock, but the plant must be capable of converting that feedstock into acceptable product. Don’t forget that a 1 cent per pound differential in feedstock cost results in roughly a 7.5 cent per gallon difference in cost. Corn oil from ethanol plants has a higher free fatty acid (FFA) content than soybean oil, however, so pretreatment must be employed to convert the oil to an acceptable transesterification feedstock. In addition, corn oil has an inherent reddish color that must be minimized to meet ASTM specifications and satisfy end-user requirements. This may require distillation or caustic refining, which will add to processing cost and impact the biodiesel yield.


Whether corn oil or another lower-cost feedstock is desired, the plant will most certainly need the ability to process higher FFAs since they are synonymous with lower-cost feedstock. The ability to convert FFAs into methyl esters instead of soap increases product yield and reduces feedstock cost per gallon of biodiesel. This does not occur in a traditional caustic catalyzed transesterification process, however. A pretreatment step is required to process high FFA material in a conventional biodiesel plant. The actual method of pretreatment depends on the size of the plant, technology preference and other factors.


The four main pretreatment routes available to traditional biodiesel producers are: blending of lower quality feedstock with higher quality feedstock, acid esterification with a solid catalyst, acid esterification with a liquid catalyst, and glycerolysis. Other pretreatment routes are possible, but the four listed previously are most widely used. Blending is the least capital intensive option, but the FFAs still produce soap and are not converted to biodiesel. Acid esterification is the reaction of methanol and FFAs to produce methyl esters. The catalyst may be a solid resin or a liquid acid, such as sulfuric acid. Glycerolysis is the reaction of glycerin and FFAs to produce mono, di and triglycerides, which can then be converted into methyl esters in the traditional transesterification reactors. All of the options produce water that must be removed prior to transesterification. Before choosing a pretreatment method, it is recommended that site-specific analysis be performed to determine the optimal technology for that particular location.


2012 is going to test the capabilities of the biodiesel industry in general, and the ability of individual plants to secure sufficient feedstock to meet the RFS2 requirements. As the industry gears up to meet the mandated demand for biodiesel, feedstock strategy will be one of the most critical factors in plant profitability—with or without the tax credit in place.

Author: Pete Moss
President, Frazier, Barnes & Associates
(901) 725-7258
fbapete@frazierbarnes.com

 
 
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