Combating the Glycerin Glut

• 

Saying the domestic crude glycerin market is reaching its saturation point would place one in the running for understatement of the year. The neutral substance, which is a by-product of the burgeoning biodiesel industry, has been anything but neutral to those directly affected by its price and availability.

As biodiesel production soars, so does crude natural glycerin. With up to 400 million additional gallons of biodiesel production being built or on the drawing board, it's clearly evident glycerin is becoming a significant issue.

As with most industries, the U.S. glycerin market is representative of the world markets. Europe has been facing excess glycerin production issues for years since its biodiesel production began booming. "Biodiesel has taken off around the world," says the National Biodiesel Board's (NBB) Steve Howell. "Glycerin is very much a global market."

In addition, the growing oleochemical industry in Asia is producing glycerin by the barge-load. Much of it had been exported to the United States, but with rising freight costs, a majority of it is now shipped to China.

European companies are striving to stay ahead of the glycerin explosion. In early 2006, international chemical company Solvay announced plans to build a 10,000 metric-ton-per-year epicholorohydrin plant in France. The plant will manufacture glycerin products to make epoxy resins, paper-reinforcing agents and other products. Other companies are proposing similar projects.
Meanwhile, the U.S. synthetic glycerin market has taken quite a beating. Synthetic glycerin is petroleum-based, where natural glycerin-such as that produced during biodiesel production-is created from fats and oils. Dow Chemical was once the nation's only producer of synthetic glycerin. It closed its Freeport, Texas, plant in January, citing-in part-the flood of glycerin from biodiesel production. Dow Chemical still operates a glycerin plant in Germany.

"There is quite a synthetic market that's been upset," says Jim Conway, vice president of sales for Kentucky biodiesel producer Griffin Industries. "We are beginning to produce more than the market can bear under the current scheme of things."

Annual consumption of glycerin in the United States has ranged between 400 million and 450 million pounds for the past three years. Domestic production figures show that approximately 400 million pounds per year was produced heading into the turn of the century.

The U.S. biodiesel industry is expected to produce an estimated 1.4 billion pounds of glycerin valued at $289 million between 2006 and 2015, according to an economic study by John Urbanchuk, director of LECG Inc. According to projections gleaned from NBB estimates, the industry could produce as much as 200 million pounds this year alone. Crude glycerin that once fetched between 20 and 25 cents per pound is now edging closer to 5 cents and lower.

Some companies are trying to hedge against crude glycerin by refining their own. Purada Processing already operates a glycerin refinery at its biodiesel plant in Lakeland, Fla. Cargill built its own refinery collocated with its 37.5 MMgy biodiesel plant in Iowa Falls, Iowa, making it the first company in North America to combine soybean crushing, biodiesel production and United States Pharmaceutical-grade glycerin production at one plant. In early August, Cargill announced a second similar facility for Kansas City, Mo.

While constructing glycerin refineries is a viable option for companies like Cargill and Archer Daniels Midland Co. (ADM), most biodiesel producers have to play with the market presented to them. And with glycerin prices at historical lows, it hasn't been easy.
"Not every biodiesel plant is big enough to justify the capability to upgrade the crude glycerin," says Bill Downey, vice president and head of Kline Co.'s petroleum and energy consulting practice. "The right-sized biodiesel suppliers will win with more feasible project economics based on the sale of a by-product that would otherwise be discarded."

As much as glycerin prices have taken a downturn, anyone involved in the biodiesel industry knows that the issues surrounding glycerin haven't slowed down progress whatsoever. "Low prices for glycerin aren't having a negative impact on putting up biodiesel plants," Howell says. "They are going up fairly quickly. If we would have higher-value uses for glycerin, it would make biodiesel economics that much better."

Beyond the Economics
After digesting the current market specifics, what potential is there for biodiesel-derived crude glycerin? For one, some experts believe the glycerin markets will stabilize and even rebound once demand for new applications hit the market.

This fall, market research firm Kline & Co. is launching a study, "Global Business Opportunities in Biodiesel Fuels, 2006-2010," to determine the potential market swings. The study is expected to provide a comprehensive analysis of the global market for biodiesel, including manufacturing cost economics for glycerin.

Beyond the actual production and marketing of glycerin are end-users. Everyone Biodiesel Magazine spoke with for this article agreed that there is no catch-all answer in respect to a new market for biodiesel-production-derived glycerin. "I don't know of any silver bullets," Howell says. "If there were, companies like Procter & Gamble and Cognis would already be doing it."

While some community-based biodiesel producers tout soap-making or aerobic composting as potential solutions, they won't make a dent at large-scale commercial operations. The most likely uses will be in replacing petroleum-based chemicals and in a variety of newfound applications. While studies on new uses are relatively few and far between, they are certainly picking up steam.
Until the past few years, not even the NBB focused much attention on glycerin. Understandably, that was at a time when crude glycerin prices weren't nearing rock bottom. "Recently, finding new uses for glycerin has worked its way up the priority list," Howell says. In fact, the NBB is supporting a Glycerin Innovation Award to encourage researchers and academia to utilize budgets to focus on uses for crude glycerin (see page 44).

Now even Decatur, Ill.-based ADM is throwing its significant weight behind exploring new uses. In mid-July, ADM scientist Paul Bloom told a crowd at a two-day biomass conference in Grand Forks, N.D., that his company plans to develop and produce industrial products like propylene glycol and other "large-volume" chemicals from glycerin (see "The 'Peak' Role of Biofuels," August 2006). In November 2005, ADM announced plans to build a polyols facility that would use glycerin-based feedstocks to produce propylene glycol and ethylene glycol.

An Energy Source
Renewable Energy Group's Myron Danzer says despite the glycerin market's fallout, it does have a floor. With any material, the floor is its value as an energy source, and with the crude glycerin market reaching basement levels, feed and fuel trials are becoming a real possibility.

While companies are beginning to commercialize technologies and processes that use biodiesel-derived glycerin for products such as polyols, dust suppressants and pharmaceutical products, another more basic potential is beginning to get recognition.

In June's "Proposed Biodiesel Plant List," many proposed projects were considering the possibility of using their crude glycerin in various forms as a boiler fuel source in replacement of a No. 4 or No. 6 fuel oil. Rose Patzer, a chemist with the Agricultural Utilization Research Institute (AURI) in Marshall, Minn., tells Biodiesel Magazine that several companies have received permits to burn crude glycerin. Although unable to divulge those companies, she did say they weren't based in Minnesota.

Working with biodiesel since 1996, Patzer has studied the possibility of using glycerin as a fuel or fuel supplement. One study tested glycerin in wood pellets fueling a wood-burning stove. Analysis didn't show a significant improvement with the glycerin mixture. AURI has also worked with Minnesota biodiesel producer FUMPA Biofuels in combining feather meal and glycerin for use in beef and dairy diets.

A more recent animal feed trial using glycerin has received national attention. Researchers at the University of Arkansas' Center of Excellence for Poultry Science recently studied glycerin as a dietary supplement in growing broiler chickens. Poultry nutritionist Park Waldroup initiated the study, which evaluated glycerin in diets fed to broilers of typical market age in litter floor pens.

The study, which Waldroup cautions is strictly preliminary, showed that as much as 10 percent glycerin could be fed to chicks in battery brooders up to 16 days of age. Battery brooders are brooding boxes with wire floors stacked on top of each other to conserve space.

Five percent glycerin inclusion in pelleted feed showed no adverse effect on bodyweight, feed intake, feed conversion or mortality. However, 10 percent glycerin inclusion reduced body weight due to reduced feed flow rate. More information on the study can be found at www.biodieselmagazine.com.

Waldroup and his researchers concluded that glycerin can be used as an energy source for broiler diets. While the results of this study are intriguing, Waldroup cautions they are preliminary and were based on a consistent, clean supply of glycerin.

Butler, Ky.'s Griffin Industries provided the glycerin for the study. Griffin produces 2 MMgy of biodiesel in addition to recycling agricultural wastes. "We have looked for different types of markets (for glycerin)," Conway says. "We are very closely related to the animal feeding industry, so we looked at this some time ago."

Waldroup is continuing to study glycerin in broiler diets, this time using glycerin provided by Stuttgart, Ark.-based Patriot Biofuels, which began producing 3 MMgy of biodiesel this spring. The second study is determining the effects of 2 percent to 2.5 percent glycerin inclusion in order to more accurately represent real world market conditions. "No one is going to be feeding 10 percent glycerin," Waldroup says. "If you looked at the typical poultry operation, it's going to be mixing 4,000 tons of feed per week. It would take a pretty big biodiesel plant to even have enough glycerin to have 1 percent in the diet."

Waldroup again stresses the consistent quality of the glycerin needed to make it a realistic addition to animal diets. "Everybody wants to give me their glycerin," he says. "But what are some quality parameters?"

Quality a Cause for Concern
Like biodiesel itself, glycerin quality is an obvious concern for refiners. The quality of crude glycerin is as varied as the process technology available to produce biodiesel, which at times can seem limitless. "The crude glycerin quality from biodiesel operations is all over the map," Howell says. "While the West Centrals' are looking at newer uses, smaller companies are primarily focused on just trying to get biodiesel produced."

Patzer says AURI's studies varied based on the quality of glycerin. In studies that used glycerin as a fuel supplement, the less pure the glycerin the less energy value. Patzer also warns that incomplete combustion of glycerin can release toxins. "Biodiesel plants generally don't have purification processes (for glycerin)," Patzer says. "If you're trying to purify it, you're adding cost. That doesn't mean we can't find uses for it."

Typically, larger, professionally engineered plants have a more consistent glycerin because they give more attention to cleaning up the by-product. Smaller, self-designed facilities oftentimes don't pay as much attention to glycerin quality, causing it to suffer, according to Howell. "Companies that refine glycerin aren't willing to take some of the lower quality glycerin," Howell says.

He adds he's heard reports of smaller plants essentially giving away glycerin because of small quantities and varying levels of methanol residue and salts within. Biodiesel Magazine has talked with other small plants that have had to pay to dispose of the glycerin.

As with anything in a capitalist system, it all boils down to economics-dollars make sense. As crude oil prices have skyrocketed, so has the interest in biodiesel production and use. The likewise is true with glycerin, although on a significantly less turbulent timeline. Sure, glycerin prices have fallen, but companies aren't about to invest until that trend is sustained. Once it does, glycerin stands to become an even more commonly used chemical than it already is.

Glycerin will likely become a substitute for common petrochemicals on the market. "Glycerin may become the next biodiesel," Howell says. "In three to five years, it will be seen as an environmentally friendly way to replace other competing petroleum products. You'll see a variety of smaller chemical uses where glycerin can come in and replace other petrochemicals. It will be one of the next chemical platforms, to use U.S. DOE speak, that will become widely available, and people will spend time focusing on it."

Dave Nilles is a Biodiesel Magazine staff writer. Reach him at [email protected] or (701) 373-0636.