It's no secret that the ethanol industry has employed creative ways to diversify existing product lines while maintaining and growing new ones. Corn oil extracted from distillers dried grains with solubles, in the back-end of the ethanol production process, is providing a widening business opportunity for several ethanol companies to market as feedstock to existing biodiesel producers.

Since early 2010, South Dakota-based ethanol producer Poet LLC has been producing about 2 million pounds of corn oil, dubbed Voila, from its research center in Scotland, S.D., using its patent-pending BPX process. Prior to producing corn oil at its Scotland facility, Poet conducted a six-month precommercialization trial run for its BPX process at its 56 MMgy production plant in Hudson, S.D., in 2009.

A characteristic that makes Voila favorable over other crude corn oil on the market, according to Scott Weishaar, vice president of commercial development, is its lower free fatty acid content, adding that it's also priced competitively with yellow grease, yet below soybean oil spot market prices.

"Our launch strategy with our corn oil has been targeting biodiesel producers," Weishaar says, adding that Poet intends to increase production volumes to meet customer demand by installing extraction technology in existing ethanol production assets. "The bigger issue that we're closely watching is not only the market price of corn oil but the viability of the biodiesel market," Weishaar says. "In other words, as we invest in [ethanol] assets we have to make sure we have a home for our corn oil."

Voila would be a boon for existing biodiesel producers who primarily use corn oil as feedstock, such as Walsh Biofuels LLC, which operates a 1 MMgy facility in Mauston, Wis. According to general manager David Walsh, corn oil gained from the backend of ethanol plants can be one of the toughest feedstocks for producers to use due to its inherently high FFA content. "You have to change a lot of things around to make standard corn oil work," he says.

With corn ethanol companies like Poet capable of producing increased volumes of oil to supply existing biodiesel producers with feedstock, Weishaar says marketing opportunities are expected to expand in 2011.

"What better example of going into the renewable fuels space with a coproduct of an ethanol plant being the inbound feedstock of another plant to produce yet another renewable fuel?" he says. "That's a pretty good synergy."