REG maps future of US industry

By Ron Kotrba | January 01, 2009
Renewable Energy Group Inc. and the Global Biofuels Center hosted a webinar Nov. 21, titled, "The Future of the U.S. Biodiesel Industry." More than 90 people tuned in.

Dave Slade, REG technical manager, spoke about the newly created B6 to B20 specification ASTM D 7467, and the adjustment of the diesel specification ASTM D 975 to allow up to B5 invisibly. He said there is an approved test (ASTM D 7371) that can determine the percent of biodiesel in blends.

He also reminded webinar participants that on Dec. 16, 2008, the Federal Trade Commission would start requiring the labeling of pumps dispensing biodiesel blends exceeding 5 percent. Blends between B6 and B20 require labels stating that the biodiesel content is within that range, while blends exceeding 20 percent require precise percentage labeling.

Blends of B5 and lower don't require labeling. A distinction between biodiesel and non-ester renewable diesel is also required in the labeling; biodiesel labels are blue and specify "biodiesel," while non-ester renewable diesel labels are orange and specify "biomass-based diesel or biodiesel."

As a BQ-9000 accredited producer and certified marketer, REG also detailed its REG-9000 product line, which includes three biodiesel products based on cloud point, oxidative stability and cetane number. REG-9000-1 has a cloud point between zero and 2 degrees Celsius, REG-9000-5 has a cloud point of 4 to 6 degrees Celsius, and REG-9000-10 has a cloud point of 8 to 12 degrees Celsius. "It's important to recognize that production skill and technology are what's going to determine biodiesel quality, not feedstock," Slade said.

Blend economics are still favorable, despite falling petroleum prices. Prices for a gallon of REG-9000-1, REG-9000-5 and REG-9000-10 B99 in Newton, Iowa, on Nov. 15 was $2.35 per gallon, $1.80 per gallon and $1.20 per gallon, respectively. Meanwhile, the Chicago rack price for No. 2 ultra-low sulfur diesel was $1.76 per gallon. Adding a 12-cent-per-gallon rail charge to REG-9000-10, the Chicago free on board price is $1.32 per gallon. A B10 blend would yield a 5-cent-per-gallon gross margin for distributors.

With a U.S. biomass-based diesel mandate coming in 2010, and demand from municipalities, agriculture and heating oil markets, REG concluded the future of the U.S. biodiesel industry is bright.
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