Throughout development of the biofuels industry, the main feedstock focus of researchers and producers has been grain starches, cane and beet sugars, vegetable oils, tallows and lards, and cellulosic biomass, leaving the strain on producers to manage sustainability concerns, feedstock costs and operational improvements. Global biodiesel production has relied on rapeseed, soy and palm oils, along with fewer amounts of fats and waste greases. Only in the past five to seven years has research into the use of so-called second- and third-generation feedstocks been adequately promoted and supported by federal programs and the renewables industry. U.S. biodiesel production is expected to reach 1 billion gallons by 20121. The USDA projects that soybean oil for biodiesel will grow to 2.9 billion pounds by 2012-'13, representing up to 15 percent of domestic soy oil production, supporting nearly 400 million gallons of biodiesel. Although other plant-based vegetable oils are used by the U.S. biodiesel industry, much of the remaining volume to reach the 1-billion-gallon mark in the revised renewable fuel standard (RFS2) by 2012 will come from fats or recycled vegetable oil.


Glycerin Platforms

Industrial biotechnology company Glycos Biotechnologies Inc. of Houston, Texas, recently developed a biotransformation technique that directs crude glycerin from the biodiesel process into ethanol at high yield efficiency. Using microorganisms as biocatalysts-enzymes or microbes that initiate or accelerate chemical reactions-GlycosBio makes possible the conversion of a disadvantaged coproduct into another prominent chemical. Scientists recognize that glycerin is sometimes difficult to convert in a microbial transformation, but its inherent chemistry opens alternatives to produce hundreds of compounds. For that reason, biofuel producers can tap crude glycerin streams to produce new and valuable coproducts.

What does this mean for the biodiesel industry? This new biological process enables owners of biodiesel plants to use glycerin streams within their plants to diversify coproducts and provide revenue management flexibility. Crude glycerin exiting the separation units can be converted to products like ethanol and propylene glycol, an important component of polyester resins, industrial solvents and hydraulic fluids, which boasts a $786 million U.S. market. At 85 cents per pound, propylene glycol has the potential to add 29 cents in production margin per gallon of biodiesel. If soybean oil prices begin to rise again, glycerin provides minimal plant contribution against low oil prices, but unlike glycerin, the industrial uses (and prices) for propylene glycol present a more sustainable source of economic value.

Translating this into plant dollars, a 50 MMgy biodiesel refinery that converts its nearly 4.5 million gallons of crude glycerin can churn out 25 million pounds of propylene glycol, or $21.35 million at today's market prices. The conversion of glycerin to propylene glycol is under development by Dow, UOP, and Huntsman2. Epichlorohydrin is a high-volume commodity chemical used largely in epoxy resins. Dow and Solvay developed technology for converting crude glycerin to epichlorohydrin. The process is solventless and exemplifies the trend of an expanding use of natural polyols for the manufacture of commodity chemicals3.


The Promise of Algae

Third-generation biofuels seek to improve yields through improving the feedstocks themselves instead of the processes. Third generation or advanced feedstocks include those sources that promise to generate greater than 500 gallons of oil per acre per year, namely palm oil and algae oil as examples. Corn, soybean and camelina yield 18, 48, and 62 gallons of oil per acre, respectively. Rapeseed and jatropha yield 127 and 202 gallons of oil per acre. Palm oil alone yields 635 gallons of oil per acre. But conservative projections are that oil harvested from algae will yield values much higher than all of these; between 5,000 and 10,000 gallons of oil per acre have been speculated. Still, there is no successful commercial demonstration of biodiesel from algae oil apart from a few laboratory samples.

The production cost of algae oil depends on many factors such as the yield of biomass from the culture system, the oil content, the scale of production systems, and the cost of recovering oil from algal biomass. Currently, algae oil production is still far more expensive than petroleum diesel fuels. For example, Chisti4 estimated the production cost of algae oil from a photobioreactor with an annual production capacity of 10,000 tons per year. Assuming the oil content of the algae to be around 30 percent, the author determined a production cost of $2.80/liter ($10.50/gallon) of algal oil. This estimation did not include the costs of converting algal oil to biodiesel, or the distribution and marketing cost for biodiesel and taxes. At the same time, the petroleum diesel price was between $2 and $3 per gallon.

In 2007, Shell established Cellana with HR Biopetroleum of Hawaii for the development of algae-based biofuel. Chevron partnered with Solazyme last year to develop and test algae for biodiesel feedstock5. And last year, ExxonMobil announced more than $600 million for research and development of algae-based biofuels through a partnership with U.S. biotech company Synthetic Genomics. Most researchers agree with Shell and ExxonMobil that another 10 years will be required before algae-based biofuels will be available in commercial quantities.

The first algae ventures will come online in 2011 with CO2-capture projects, federally-funded energy and defense initiatives, and the first small-scale commercial biofuels and biomass projects. Then between 2012 and 2015, a larger number of projects will scale up from demonstration to commercial-scale.

Fourth-generation feedstocks will include genetically modified feedstocks designed to increase oil yields and improve levels of CO2 sequestration. The fuels produced-biodiesel, ethanol, or renewable diesel-would qualify as an advanced biofuel under RFS2 and would be eligible for a higher per-gallon tax credit.


Waste Greases, Animal Fats

Waste cooking oil is one of the most economical choices to produce biodiesel. Since one of the major concerns of biodiesel producers is feedstock price, waste cooking oil greatly improves the economics of biodiesel.

Huge quantities of waste cooking oils and animal fats are available throughout the world, especially in developed countries. Management of such oils and fats pose a significant challenge because of their disposal problems and possible contamination of the water and land resources. The Energy Information Administration estimates that just more than 110 million gallons of waste cooking oil is generated per day in the U.S., where the average per capita waste oil was reported to be almost 10 pounds6 or 1.5 million tons per year. In Canada, that number could be 135,000 tons per year, and in Mexico that number could be 555,000 tons per year.

High Plains Bioenergy in Guymon, Okla., a subsidiary of Seaboard Foods, operates its 30-MMgy biodiesel plant using animal fats and vegetable oils from Seaboard's Guymon processing plant. In fact, High Plains uses much of the waste pork fat from Seaboard's co-located pork processing plant as a biodiesel feedstock. William Walden, High Plains' yield engineer, said their intent is to consolidate feedstocks in producing multiple biofuels on site.

Valero Energy Corp. announced last year it plans to build a 135 MMgy renewable (hydrogenation-derived) diesel facility using animal fats and waste grease in Louisiana, in conjunction with animal fats producer Darling International. Hydrogenation-derived renewable diesel is usually produced by hydrocracking natural oils and fats, alone or blended with petroleum, in an oil refinery.

Ramon Gonzalez, assistant professor of chemical and biomolecular engineering at Rice University, said if researchers can co-develop some commercial platforms for glycerin, fatty acids, and greases, the renewables industry as a whole will come much closer to displacing petroleum-based chemicals, both economically and technically. "Integrating products and feedstocks across streams and processes is what we need to aim for," Gonzalez said. "It's taking a page from the success of the petrochemical industry."


References
1. O'Brien, Daniel. AgMRC Renewable Energy Newsletter March 2010, Agricultural Marketing Resource Center, USDA, Iowa State University.
2. Patent Watch, American Chemical Society (2008)
3. Briggs, J.R. Glycerin as a Renewable Feedstock for Epichlorohydrin Production. Clean 2008, 36 (8), 657-661.
4. Chisti, Y. 2007. Biodiesel from microalgae. Biotechnology Advances 25:294-306.
5. De Guzman, Doris. Biofuels pumped up, ICIS Chemical Business, Sept. 29, 2009.
6. Radich, A. Biodiesel performance, costs, and use. U.S. Energy Information Administration.

David Gaskin is the director of strategic planning for Houston-based Glycos Biotechnologies Inc. Reach him at dgaskin@glycosbio.com.