The Oil Embargo of 1973 changed the dynamic between oil exporting and importing countries forever. Historically, the oil importing countries including the U.S. and Europe controlled exploration, development of existing and new production and transportation and refining of final products for a majority of the petroleum used in the world. On Oct. 17, 1973, the Organization of Petroleum Exporting Countries, following a resource allocation model developed by the Texas Railroad Commission, stopped the flow of petroleum to much of the western world. Soon, our tanks were nearly empty and we were coping with a new set of rules in the energy industry. In particular, the cost of petroleum-based energy within the refinery, and in the fuels and chemicals markets, would never be as before.
 
 The increased prices and diminished availability of diesel fuel impacted the economic viability of mechanized agriculture in the U.S. and Europe. After a number of unsuccessful experiments using vegetable oil as a replacement for diesel fuel in farm tractors, a young organic chemist, Martin Mittelbach, from the Technical University of Graz in Austria, reviewed the problems encountered in using whole oils in the tractor engines. In 1981, Mittelbach and colleagues began a structured laboratory research program to determine the cause of the engine failures and how to eliminate them. Their first publication of the use of fatty acid esters as a diesel fuel appeared in 1982. 
 
 In 1979, Charles Peterson, an agricultural engineer at the University of Idaho, began working with vegetable oil as a diesel fuel for farm tractors. Peterson's group faced the same challenges as the Graz group did with fuel coking. At Idaho, the researchers also explored the idea of using blends of diesel and vegetable oil as a fuel. The results from the Idaho effort were confirmation of the failures in Austria, until Peterson's group tried a 50/50 mixture of diesel fuel and transesterified rapeseed oil. The engine performed reliably in long-term testing. The majority of the subsequent development work at Idaho used ethyl esters, not methyl esters as used in Austria. The rape esters also demonstrated the fact that the esters are powerful paint removers. 
 
 
 Fundamentals
 
 The important contribution from Austria is the use of transesterification as a means of producing fatty acid esters and the separation of the coproduct, glycerol. The glycerol is the component in the vegetable oil that creates the coking upon combustion in the diesel engine because of its low decomposition temperature (290 degrees Celsius). Coking is why the engines were failing after a relatively small operating time. By using transesterification, glycerol is easily removed from the fatty acid esters. Peterson's work clearly showed that fatty acid esters blended easily with conventional diesel fuel and produced a fuel product, B100, a complete replacement for petroleum diesel. 
 
 By 1983, the strategy of transesterification was a demonstrated success. Additional work on fuel quality and emissions at Graz resulted in a seminal paper published in The Journal of the American Oil Chemists' Society (JAOCS) in 1988 that opened the door to the current biodiesel industry.

 
 
 Establishing Biodiesel
 
 The JAOCS paper quickly came to the attention of Earl Gavett, USDA Economic Research Service, who assembled a fact-finding team that went to Austria to find out about this new "biodiesel" innovation. The team recognized that biodiesel offered a potential market for excess soybean oil, and a renewable source of diesel fuel. I received a call from Don van Dyne, University of Missouri-Columbia, and a colleague in a large USDA oilseed project. "Dave, we've learned about an exciting opportunity for a renewable diesel fuel," he said. "We have a briefing for the House Ag Committee in two weeks. Could you provide us with a process description and a cost estimate for a 100 MMgy production plant to make biodiesel?" I replied, "Well maybe. I have seen the work at Idaho with oil-diesel blends, but what is biodiesel?" Van Dyne replied, "The fatty acid methyl esters made from vegetable oil." I said, "O.K., I can do that," and I did using the data from Mittelbach and Peterson.
 
 The rush was on. The American Soybean Association began funding several projects to evaluate the biodiesel opportunity, and the USDA Agricultural Research Service instituted additional research in support of the development of biodiesel. There were a number of early adopters in private industry-designers with and without expertise, and the beginnings of the "home brewers" movement. Several universities became involved, beginning with the University of Idaho, then University of Nebraska, Iowa State University, University of Missouri-Columbia, and the University of Georgia. The USDA biodiesel program was centered at the ARS Lab in Peoria, Ill. The U.S. DOE biodiesel program was headquartered at the National Renewable Energy Laboratory in Golden, Colo.
 
 Another phone call came two years later from a senior staffer of the House Ag Committee, who needed a legal definition of biodiesel to get it into the Farm Bill-and it was needed in two hours. My reply: "Biodiesel is defined as the mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats, for use in compression-ignition (diesel) engines." The new title in the Farm Bill passed. Shortly thereafter, there was an increase in funding and attention for biodiesel in USDA and DOE. The National Center for Advanced transportation Technology (NCATT) at the University of Idaho was established in 1991 by Congress as a key participant in the biodiesel development program. 
 
 
 Building the Industry
 
 The 1990 Farm Bill opened the door for government support and involvement in developing biodiesel as a new industry. At the time there was a very large demand for soybean meal for animal feed, but the available soybean oil supply outstripped the market demand. The soybean farmers were awash in oil.
 

 The American Soybean Association embraced the opportunity offered by the emerging biodiesel industry as a way to provide a profitable absorption of the excess oil. There were ASA committees actively pursuing market development, legislative support, fuel demonstration projects, public awareness, as well as critical research and development programs. 
 
 A major effort went into the creation of a preliminary quality standard for the fuel, finished in 1991. The standard was the first step in providing the quality and performance requirements for the biodiesel industry. The standards tell engine manufacturers the properties they can expect from the fuel and enabled the manufacturers to develop appropriate technologies to support performance warranties.
 
 As a program director of the USDA Cooperative State Research Service Office of Agricultural Materials on loan from the University of Nebraska-Lincoln, I cohosted a meeting at USDA Secretary Edward Madigan's office in early 1992 to discuss coordinating the efforts on behalf of the ASA, USDA, DOE, and advocacy groups such as the New Uses Council to further the biodiesel cause. The outcome of the meeting was the formation of the National SoyDiesel Development Board. 
 
 The early discussions of the SoyDiesel Board addressed the strategy to be adopted in pursuing the acceptance and, hopefully, cooperation of the petroleum industry and the vehicle/engine manufacturers. There were already a number of demonstration projects underway, but there was only a provisional specification for the fuel. The decision was to rigorously develop performance specifications for the fuel and its use utilizing the ASTM structure and approval system as the acceptance strategy.
 
 A key collaboration in the pursuit of acceptance by the engine manufacturers and the diesel fuel providers was the result of a memorandum of understanding between the USDA and the U.S. Department of Defense to develop technologies to produce products using agricultural raw materials. The products had to be of use to the U.S. military, the world's largest single consumer, and the civilian market-a "dual use strategy." 
 
 Initial biodiesel trials by the military took place at Yuma Proving Ground, Arizona. When the test vehicles failed within a few hours to a few days, things looked bad. Steve Howell, a chemical engineer with Mark IV, was sent by the SoyDiesel Board to YPG to investigate the situation. Howell proved to the Army that biodiesel is a super solvent that cleans fuel tanks, with the dissolved goo plugging fuel filters. The Army was satisfied, but this issue persists today.
 
 Extensive additional performance and property testing was conducted by the Army Tank-Automotive Command in Warren, Michigan, and the Fuels and Lubricants Laboratory in Ft. Belvoir, Va. (Editor's Note: Read part two of the story in the January issue of Biodiesel Magazine.)
 
 L. Davis Clements is CEO of Biomass Renewable Technologies Inc. Reach him at dave@biomassrenewabletechnologies.com.

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The history of U.S. biodiesel begins almost 30 years ago as university researchers built upon developmental Austrian work. Years later, when biodiesel gained entry into the 1990 Farm Bill, an industry was born.

Milestones in the Changing U.S. Biodiesel Industry: Part One

Challenges define the biodiesel industry today. Lack of working capital, negative margins between feedstock and product prices, energy costs, environmental issues, legislative uncertainties-you name it, the biodiesel industry has the challenges. Are there opportunities? Yes, but the opportunities must be identified in terms of the immediate challenges faced by each player in the industry. 
 

 Wolf at the door? It may seem so when your lender seems ready to pull the plug. The first thing to do is to understand the situation from your lender's perspective. Lenders don't want to declare a default and call the loan. But, once the loan is nonperforming, they may have little choice. Opportunities: See what your lender needs. Can principal payments be deferred if resources can be found to pay interest? Can covenants be renegotiated if viability can be demonstrated? Would the prospect of a new third-party transaction-equity financing, joint venture, acquisition or the like-give the lender an incentive to work with you? Analyze the risk you present to the lender, and opportunities may be revealed. 
 
 Scraping the bottom of the barrel? That's not an unusual problem these days. The till is empty and nobody is offering working capital. But most biodiesel assets are worth something, and if values are broken down and a new projection is made, there is likely to be some value that can be used as a base for debt or equity financing. It may not be pretty. Existing equity holders may get hammered, and even the bank might take a hit. If a financing plan can be devised, however, all stakeholders might be better off than they would be in a foreclosure or bankruptcy. The key is to understand the value equation, designing a financing package attractive to new money and then identifying the investor or investors.
 
 Head for the altar? Maybe you have discovered that staying single isn't what it's cracked up to be. Maybe two can't live as cheaply as one, but perhaps two together can survive more easily than two separately. A merger, joint venture or other acquisition may be an opportunity to find happiness and preserve some, if not all, of your investment. And your bank might play father of the bride. So who's the partner? Another company or companies like yours, a supplier or customer, or a financial investor? Again, the opportunity will be defined by the value equation, the incentive other potential partners may have to be attracted to you and your ability to locate those partners. 
 
 Feedstock frenzy? Are you getting killed in the feedstock market? If so, join the crowd. There are ways to try to control the problem though. You know what they are: longer-term supply agreements, hedging, tolling arrangements and other techniques, all of which are designed and priced to maximize your competitive position. The metrics are complex and you may need help, but if you can design a plan and negotiate agreements to leverage your competitive opportunities, you can succeed where others fail. 
 
 Marketing madness? Are you getting killed in the product market, just like with feedstock? Opportunities: longer-term sales agreements, hedging, tolling arrangements and more. Keep in mind that as long as mandates and incentives exist, someone will be buying biodiesel. You need to find the right customer or customers and work out a mutually beneficial agreement. That agreement might also reduce your cash requirements and/or provide some working capital. It's all in what you can negotiate. 
 
 Stormy environment? When the state environmental folks pay a visit, it's not always a picnic in the country. They can shut you down right now. Or, they can fine you for the little money that's left in your till. So where's the opportunity? The opportunity is to work out an arrangement that will correct your issues, perhaps make your operation better and cleaner than before, or maybe find an alternative and even financing to get it done. Usually the state doesn't want to shut you down; they have every incentive to work with you if you are ready to work with them. With green grant programs, carbon credits and other incentives on today's political and regulatory agenda, going greener might solve your environmental woes and your economics. 
 
 Need help? Every challenge-and each opportunity-requires proper analysis, planning, negotiation and documentation. Competent legal counsel, accountants, investment advisors and other consultants will be essential to your success, and they may bring you opportunities not readily apparent to you. Find professional partners that you are comfortable with and take their advice.
 
 Dean R. Edstrom is a partner at Lindquist & Vennum PLLP. He can be reached at <a href="mailto:dedstrom@lindquist.com">dedstrom@lindquist.com</a> or call (612) 371-3955.

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Biodiesel Challenges and Opportunities

While previous advances in diesel engine technology and exhaust aftertreatment systems were on separate and parallel development paths by the engine developers, fuels, lubricants and additive industries, it's increasingly apparent that further significant improvements will require an integrated, or systems, approach. Engine makers face ever-increasing requirements that are often in conflict with one another. As engine-out and tailpipe emissions regulations tighten, alternative fuels are being introduced, which have different physical, chemical and combustion properties than conventional diesel fuels for which engines and aftertreatment systems were originally designed. To find solutions, regulators, engine builders, equipment providers, biodiesel producers/suppliers, oil companies and lubricant additive developers must all work together towards common objectives. (Note: Be sure to check with your attorney regarding antitrust/anticompetition advice in advance.) We believe performance additives can play the important role of biodiesel "enabler" in existing and future engines. 

 
 Diesel emissions standards currently focus on two primary areas: particulate matter (PM) and nitrogen oxide (NOx) emissions. Aftertreatment systems are needed to meet the most stringent standards. Diesel particulate filters (DPF) are highly effective at removing PM from the exhaust stream and are typically used to meet the toughest regulations. For NOx emissions, there are two primary methods currently in use: lean NOx traps (LNT) and selective catalyst reduction (SCR). 
 
 Aftertreatment systems require a certain amount of heat to operate effectively. During idle and low-load conditions, diesels operate at high air-to-fuel ratios and the exhaust temperature is relatively low. As a result, plugging can occur. Therefore, most diesel aftertreatment systems require periodic regeneration typically achieved by introducing raw or partially combusted fuel into the exhaust stream. As the fuel burns, it heats the exhaust and facilitates regeneration. 
 
 Two primary methods are used to heat diesel exhaust for regeneration: late post-injection, in which fuel is injected into the cylinders well after the primary combustion event; and direct injection into the exhaust stream through a dosing injector. Internal surfaces of DPFs are typically coated with a catalyst allowing for continuous regeneration under normal, cruise conditions. Sensors monitor pressure drop as an indication of plugging across the DPF. When the pressure differential reaches a predetermined level, regeneration is started to burn off PM and reduce DPF plugging. The frequency of DPF regeneration is highly dependent on the driving cycle and ambient conditions. LNTs also require a form of regeneration called desulfurization. The frequency of LNT regeneration is based largely on the amount of fuel sulfur, but can be as frequent as every 90 seconds. Due to packaging and other concerns, light-duty diesels typically incorporate late post-injection while heavy-duty diesels use dosing injectors. 
 
 Late post-injection leads to increased cylinder-wall wetting with unburned fuel. Some of the fuel then finds itself past the rings during the compression stroke and enters the crankcase as fuel dilution. This is a physical phenomenon and is mostly independent of fuel type. However, once the fuel enters the crankcase, there are large differences in behavior depending upon which type of fuel is used. For petroleum diesel, the light compounds volatilize as the oil-to-fuel mixture reaches the hotter regions of the engine. The volatilized fuel escapes through the crankcase breather system. The heavier fractions remain mixed with the crankcase oil as fuel dilution. For biodiesel, which has a higher, narrower boiling range, none of the internal engine surface temperatures are high enough to volatilize the fuel, therefore virtually all biodiesel entering the crankcase remains as fuel dilution.
 
 Fuel dilution of crankcase oil can reduce the ability of engine oil to protect from wear and keep the engine clean. Initially, the fuel dilution reduces the viscosity of the oil, which results in a thinner oil film. As the fuel in the oil ages, it starts to decompose and can lead to increased viscosity, crankcase deposits and acids, which attack certain metal parts. Biodiesel decomposes at a different rate and in a different manner than mineral diesel.
 
 Although additives cannot solve the physical part of fuel dilution, they can be used to help reduce the likelihood of fuel dilution from harming the engine. Antioxidants in the oil additive package help reduce fuel oxidation and formation of acids and deposit precursors. Detergents help neutralize crankcase acids and keep metal surfaces deposit-free. The additive chemistry best suited to prevent oxidation, neutralize acids and keep metal surfaces clean is complicated by the fact that the reaction mechanisms for mineral diesel and biodiesel are different. Oil additive formulations can be tailored to be more effective when biodiesel fuel dilution is present.
 
 By working together, growing pains from new and emerging fuel, engine, and exhaust aftertreatment technologies can be reduced or eliminated. One example of the positive impact of collaboration in the biodiesel industry is the development of ASTM specifications for biodiesel and biodiesel blends. These specifications have resulted in greater biodiesel consistency and original equipment manufacturer confidence regarding biodiesel use in their equipment. The BQ9000 accreditation program is another example of industry collaboration to develop a recognized quality program, benefiting individuals and the industry. To be part of the solution, partner with others to develop reasonable solutions before unreasonable solutions are forced upon us.
 
 Gary Parsons is the global OEM and industry liaison manager for Chevron Oronite Co. LLC. Reach him at <a href="mailto:GMPA@chevron.com">GMPA@chevron.com</a>.

Partnering to Improve Biodiesel's Outlook

Posted November 24, 2009

 
 Dutch airline KLM took the lastest step within the aviation industry towards using biofuel blends with a Nov. 23 test flight. A first for Europe, and the first with a select group of passengers on board, the Boeing 747 used a 50 percent biofuel blend and 50 percent traditional kerosene in one engine. 
 
 "This is an important step on the road to completely sustainable aviation," said KLM CEO Peter Hartman. "KLM has joined forces with its partners to vigorously stimulate the further development of alternative fuels. In so doing, we need to rely on the input and support of all the relevant parties: the business community, government and society at large.''
 
 On the day of the test flight, KLM also announced the formation of a SkyEnergy consortium with North Sea Petroleum and Spring Associates to boost the move towards sustainable air transport. "This is technically feasible," Hartman said. "We have demonstrated that it is possible. Government, industry and society at large must now join forces to ensure that we quickly gain access to a continuous supply of biofuel."
 
 The World Wide Fund for Nature (WWF) will advise the consortium on ecological aspects. Johan van de Gronden, director of WWF- Netherlands, called the establishment of SkyEnergy a groundbreaking initiative. " We still have a long way to go in relation to biofuels for aviation, but by investing in this manner KLM is once again taking the lead," he said. "KLM has been involved in biokerosene research since 2007. With the establishment of SkyEnergy, we are accelerating development and hope to achieve a market breakthrough. Within the consortium, we have clustered expertise and experience in legislation, ecology and technology, as well as the ability to develop biokerosene in an economically viable manner. We are moving forward with great resolve, but cannot do it alone. We need the efforts and support of government, industry and broader society." 
 
 Great Plains – the Camelina Co. said it had supplied camelina for the bio-based jet fuel used in the KLM test flight. Great Plains is working with its partners to develop a 100 percent camelina jet fuel that is compatible with today's jet engine technology. The company pointed to a study released earlier this year that showed from crop-to-air, jet fuel made from camelina cuts greenhouse gas emissions by up to 84 percent.

KLM tests bio-jet fuel with passengers on board

Waiting at a red light at the edge of town this morning as I drove in to work, I couldn't help but notice all of the diesel truck traffic. BBI International Media and Events is headquartered in Grand Forks, N.D., which borders the Minnesota state line. While at this stop light on the Minnesota side, I realized I was seeing what must have been five diesel semi trucks for every gasoline-powered passenger car. For the minute or two I sat at the light, 30 diesel rigs must have driven by. Some of the trucks were hauling loads of soybeans, sugar beets or potatoes; others were utility trucks equipped with cherry pickers or other specialty devices made for one task or another; and some were carrying merchandise to local stores. It's a sight I must see every morning, and it's a phenomenon most drivers must see every day but seldom pay attention to. 
 
 In Minnesota, all diesel fuel sold is B5-and that will eventually be upped to B20. Ostensibly, these trucks were all powered by a biodiesel blend. Often times people discount how important diesel power and diesel fuel are in our society, especially when it comes to passenger vehicles. But for those who think diesels in general are obscure machines that do not affect their lives, they should just pay attention the next time they are driving around or sitting at a stop light. On-road trucks transport virtually all the goods we purchase. They carry industrial equipment from the point of manufacture to the point of use. Diesels plow our streets and take children to schools. Transit buses transport city populations from one place to another. Off-road diesels build our roads and construct new buildings and destroy old ones. And trains powered by diesel, which convert diesel power to electricity, carry goods, people and equipment short distances or across the country. Marine vessels traverse the globe with grain, products and more. So the next time a person tries discounting the importance of diesel fuel or power, tell them to open their eyes and simply look around once in a while. They might be surprised at what they see. 
 
 On another note, there have been some positive signs that the economic situation for biodiesel might be turning around. For one, the Ag Marketing Research Center's soy biodiesel plant profitability chart, a hypothetical soy bio plant model that costs can be plugged into to determine how profitable-or unprofitable-biodiesel production is, indicated good news recently. For many months, the model showed negative profitability but in September it went into the black. Perhaps the economics of the hypothetical soy methyl ester plant is a sign of things to come for real biodiesel producers. Secondly, NBB recently conducted a survey that found people are more aware of biodiesel than ever. The third piece of good news is that the latest energy balance numbers, computed by USDA and the University of Idaho, show that biodiesel is energy positive 4.5:1, meaning for every unit of fossil energy put into biodiesel production, 4.5 units of energy are produced. For years that number was 3.2, which was always considered very good, and it's only getting better thanks to agronomic efficiencies, consideration of coproducts like glycerin, more efficient production and so forth. And finally, we're coming up on 2010, and as soon as the U.S. EPA releases its final rule for implementation of RFS2, the combined required blend volume of biomass-based diesel for 2009/2010 (500 million gallons for 2009 and 650 million gallons for 2010) is an amount that is greater than the 2012 volume requirement of 1 billion gallons. Once this rule goes into effect and obligated parties feel pressure to blend the required volume of the renewable fuel, I anticipate we will see a rash of idled biodiesel plants start producing again, and those that are producing, but not at capacity, will push production up due to the increased demand. 
 

 Ron Kotrba
 Editor
 Biodiesel Magazine
 <a href="mailto:rkotrba@bbiinternational.com">rkotrba@bbiinternational.com</a>

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The Ubiquitous Diesel, Positive Biodiesel News

Thailand's energy minister proposed in his remarks at the Bangkok Biofuels 2009 forum in September that the Association of Southeast Asian Nations is a biofuels hub with the potential to become the OPEC of biofuels. Minister of Energy Wannarat Channukul pointed out Indonesia and Malaysia are the top two palm exporters while Thailand has the best location for biofuels development and production in the region. In other remarks, Richard Jones, deputy executive director of the International Energy Agency, said while biofuels currently account for only 1.5 percent of the 85 million barrels of oil used every day in global transport, if all countries in the world promoted biofuel that could surge to 25 percent, or 25 million barrels per day, by 2050.

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SE Asia urged to become  OPEC of biofuels

Tri-State Biodiesel Inc. of New York City focused on feedstock procurement before anything else in developing its biodiesel business-and it has paid off. The company has avoided using refined vegetable oils from the start. "By taking that tack, we've been profitable through the recession and we've grown in an organic way," says CEO Brent Baker. Tri-State Biodiesel now services 2,700 restaurants in the New York City region as grease collector and it supplies feedstock to area biodiesel plants.
 Tri-State Biodiesel also sells biodiesel and has an aggressive pitch. Interestingly, the company hasn't produced any fuel yet, but its management thinks the time is now right to get into the production side of the industry, and is building its first methyl ester plant. 
 
 This model could be a recipe for success, and it is quite unique compared to many other business plans for biodiesel production, and there are many. "It really comes down to where you're at in the supply chain," says Daniel Oh, chief operating officer for Ames, Iowa-based Renewable Energy Group Inc. "Are you going to refine fuel, market it…offer management services? There's a long-standing debate over whether it's better to be focused or diversified. At REG, we take the position that it's better to be diversified."
 
 Don Lossing of Frazier, Barnes & Associates LLC in Memphis, Tenn., reiterated that being vertically integrated was an ideal situation for biodiesel producers. REG is vertically integrated-the only thing it doesn't do is grow feedstock. On the other hand, Tri-State Biodiesel has focused on feedstock to develop its business and is now starting to move into the vertically integrated model. "There are a lot of different models, but they all have to have excellent management," Oh says. Tri-State Biodiesel has different experts overseeing every aspect of its business: a chemical engineer, an attorney, an accountant, a salesman and a logistics and routing manager. REG has a lab devoted exclusively to feedstock development, and sales managers strategically located in different regions.
 
 Regional differences, combined with idiosyncratic fuel needs-from bioheat in New England to Great Lakes maritime applications-create the opportunity for several business designs to be successful. Large-scale producers, including renewable diesel facilities, try to meet the needs of the industrial buyers, the oil companies, while small-scale plants can identify niche locations in feedstock procurement and work with specific municipalities for off-take agreements.

 
 "I see factors pulling both ways," says Mark Warner of the Seattle-based engineering firm Harris Group Inc. "You can't get 50 MMgy of tallow, but Big Oil doesn't want to buy from five small plants. They want to make big purchases-in the two- to three-million gallon range-and there are really very few facilities right now that can accommodate this."
 
 Planning, conducting feasibility studies and designing a unique production scheme before ever approaching a bank to get a loan are prerequisites now more than ever. Banks are only loaning to the smartest, most prepared projects. "If your model isn't adaptive it doesn't matter if you're Alexander the Great, you won't be able to get it done," Oh says. 
 
 
 Process Optimization 
 
 It's always important to be the lowest-cost producer. Plant optimization, as much as it involves technology, is actually a management strategy. It means good managers are always looking to upgrade or optimize the efficiencies of their process, and that's the case in all manufacturing enterprises-not just biodiesel. When to pursue process optimization, which often involves a capital investment in new technologies, depends upon the timing skills and decisions of a management team. REG has invested in an array of technologies that the company has implemented throughout its network of biodiesel plants, but having the right equipment alone is not enough. "If you are processing multiple feedstocks, they can affect each other in different ways," Oh tells Biodiesel Magazine.
 
 Most of the industry is cash-strapped, but if producers have funds at their disposal they are investing in technologies and products that will allow them to process multiple feedstocks, including those with high free fatty acid (FFA) content, says Warner, a process engineer who helped build Imperium Renewables Inc.'s 100 MMgy plant in Gray's Harbor, Wash. "Plants are also interested in refinement technologies to produce a higher grade of glycerin," Warner says. "There really aren't any opportunities anymore in crude glycerin." 
 
 "The companies that we've seen struggle are the ones that pursue their own process technology designs without an adequate amount of in-house expertise," Warner says. "For those projects that pursue models based on 5 MMgy or less, we recommend a prepackaged facility."
 
 Technological expertise is certainly an aspect of biodiesel management that has to be coordinated with risk assessment sophistication and logistical prowess. For instance, different feedstocks affect each other in different ways, so you have to know the right ratios to use them in, Oh says. "It's that craft knowledge that has to be combined with risk management and technological expertise-and none of them can be overlooked." 
 

 
 Contending with Market Forces
 
 Raw materials prices trail energy on the way up and on the way down, which means hedging sales and procurement on the futures contracts can be a very tricky situation for risk managers. "When you're pairing an ag-input (feedstock) pricing structure with an oil-pricing structure, they don't move the same way," Oh says. "It requires additional work to bridge those two pricing structures in your risk management system while educating customers on how deals can be structured." A high-level of skill is required to buy feedstocks on volatile ag-markets and then sell fuel in competition with oil on the backend. It takes so much time, effort and education that most managers are unwilling to divulge their particular strategies as bona fide trade secrets. 
 As for a baseline to price waste feedstock inputs, supply managers have to find substitutes with tradtional pricing structures. "Home heating oil is often used to price grease-there's a high level of correlation there," Lossing says. Because waste greases and other emerging feedstocks are difficult to price, producers should not pursue contracts that are longer than 60 days to 90 days. 
 
 On the backend, one mistake said to be made by biodiesel companies-especially their salesmen-is that they have expected a premium price for their product. But with the proliferation of fatty acid methyl esters made from unspecified feedstocks, the discounts can be very substantial compared to what soy methyl ester producers have been trying to get traditionally. 
 
 Another management strategy or trend has been the diversification of a company's feedstock portfolio. Depending on refined commodities as part of your production scheme is simply no longer an option for most plants. "But you have to remember that as biodiesel production shifts away from virgin oils, it is also shifting away from the ag-sector, which has been one of its biggest supporters," Lossing says. "There are also more quality issues associated with [biodiesel from non-virgin oil sources], and there's a very limited stock of waste materials available." 
 
 Keeping a founding contingency of the industry such as the soybean growers involved in a project's business model might be a subtle and diplomatic insight some managers consider, even as they lessen their dependence on virgin vegetable oils as a feedstock. On the backend, how a producer considers its relationship with the petroleum industry can also be strategic. "I don't think that biodiesel and petroleum are in competition with each other," Oh says. "We try to find pathways where they are not in conflict." 
 
 Plants are still getting built and new production is coming online regularly, but Oh says the U.S. EPA's lack of implementing the revised renewable fuels standard in 2009, which was never fully expected, has hurt the industry. Also, evolution is naturally causing the weaker models and management strategies to go extinct. "There has been a shakeout going on," Oh says.
 
 Nicholas Zeman is an associate editor for Biodiesel Magazine. Reach him at (701) 738-4972 or <a href="mailto:nzeman@bbiinternational.com">nzeman@bbiinternational.com</a>.

Daniel Oh COO, Renewable Energy Group Inc.

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Brent Baker CEO, Tri-State Biodiesel Inc.

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Shannon Sanford, an REG researcher, has characterized nearly 30 feedstocks and their respective biodiesels in REG's new feedstock research center. PHOTO: RON KOTRBA, BBI INTERNATIONAL

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REG's recently acquired plant in Danville, Ill., Blackhawk Biofuels, is operating, as are most of REG's plants. In today's economic environment, this could be taken as a sign that management is doing something right. PHOTO: REG INC.

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The ability of biodiesel company managers to operate within the volatile world of commodity prices on both the front and back ends requires a level of sophistication in a market that can be ruthless and unforgiving-not to mention there are technological upgrade considerations, retooling and maintenance options, branding, legislative monitoring and review, coproduct sales and logistics.

Sophistication and Delivery

Biofuel Africa Ltd. announced it is the first in West Africa to commercialize jatropha oil. The Ghanaian corporation that is wholly owned by Norwegian-based Solar Harvest AS has 1,630 acres in cultivation on leased land, in addition to its research farm. The company is testing jatropha for use as a straight vegetable oil fuel in Ghana, saying that in hot climates using straight vegetable oils will facilitate easier processing for local fuel production. 
 
 Biofuel Africa has adopted a "Food First Principle," according to CEO Steiner Kolnes, giving food production a priority while simultaneously developing jatropha production. The project has grown from 55 acres planted to food crops tended by 25 farmers in 2008, to 540 acres last year. The company plans to expand that to 6,300 acres of corn, rice and soybeans in 2010. The company received approval last year from the Ghana Environmental Protection Agency to develop close to 60,000 acres of jatropha in a program that is to include environmental, social and economic activities that assure positive impacts for local communities.
 
 "Biofuel companies that combine local fuel production with generation of a renewable local food source are proving that jatropha is an attractive and viable commodity for developing economies plagued with food security issues, exorbitant fuel prices and infrastructure lapses," the company said.

BioFuel Africa begins  commercial jatropha production

The American Soybean Association presented its priorities to U.S. Trade Ambassador Ron Kirk as the Doha round of the World Trade Organization approaches. The ASA said a successful agreement must include improvements in market access and elimination of differential export taxes. In Malaysia, Argentina and other countries, exports of a whole commodity, particularly soybeans, are taxed at a higher rate than processed goods, effectively subsidizing domestic oilseed products including soybean meal, soybean oil and biodiesel.

ASA targets differential export taxes

Work has begun on the first installation of Renewed World Energies Corp.'s algae photo-bioreactors at a 5-acre site near Georgetown, S.C. Co-founders Rick Armstrong and Tim Tompkins applied their experience in automation and process control to develop photo-bioreactors for optimal algae growth with an estimated yield per acre between 95 and 125 tons of dried biomass per year. Renewed World Energies plans to use the algae biomass to fuel a green diesel biomass refinery acquired from Unified Fuels. The catalyzed gasification unit has four products-the largest proportion being a liquid green diesel, a smaller proportion of green gasoline, non-condensable gases dominated by methane, and ash. RWE's facility will include two 800-kilowatt generators, one a natural gas generator modified to burn the methane and the other a reciprocating engine to burn the green diesel. The company is negotiating a power purchase agreement with the regional utility, Santee-Cooper Electric.

RWE to generate  electricity from algal diesel

The Roundtable on Sustainable Palm Oil announced sales grew dramatically in the final two months of the first marketing year for certified sustainable palm oil. Releasing the first year results a few days before opening the sixth general assembly Nov. 4 in Kuala Lumpur, Malaysia, the RSPO said more than 250,000 metric tons of RSPO-certified palm oil or corresponding certificates were purchased since becoming available late last year. Almost half was purchased in the past two months. The quarter million sales account for 4 percent of global production capacity and 22 percent of the total certified production of 1.1 million metric tons from plantations in Malaysia, Indonesia and Papua New Guinea over the past year. After a slow start, product manufacturers and retail companies began purchasing sustainable palm oil this past summer, the RSPO said, paying a premium for the certified sustainable product. By September and October, the market uptake of sustainable palm rose to about 50 percent of the total supply.

Certified palm oil sales increase

Washington University's Photosynthetic Research Center in St. Louis and the Advanced Biofuels Systems at the Donald Danforth Plant Science Center recently received $35 million from the U.S. DOE to fund research related to the oil producing characteristics of algae. 
 
 Officials in the state said Missouri's access to abundant water, flat land and fertilizer could make the state a hub for algae-to-fuel production. Also, Missouri has coal mines. With their constant temperature and controlled lighting, underground coal mines serve as ideal incubators. David Summers, professor of Mining Engineering at Missouri University of Science and Technology, said that mines also potentially provide an infrastructure for algae cultivation that does not have to be built-the ponds, reactors and other paraphernalia usually associated with algae production. "You can isolate the algae from the sun in a mine," Summers said. "We have stable temperatures and underground ambient conditions, plus modulated light-this means better control."

Missouri tapping coal  mines for 'slime power'

Volkswagen Group of America has started installing the equipment in its new plant in Chattanooga, Tenn., that will be manufacturing diesel Jettas and Passats among other models. Supplier Southern Fabrication Contractors, also of Chattanooga, delivered support steel on behalf of general contractor Eisenmann of Germany, for later installation of dip tanks. "Today marks an important milestone for building the new plant. We start to install the first equipment and we begin at the paint shop, one of the most important buildings of the new plant," said Lothar Grensemann, future manager of the paint shop. "We are on the spot with our schedule."

Volkswaken building  Chattanooga diesel plant

The effort to "green up" aviation is being taken very seriously, and is well underway. More than a year and a half ago, a task force was put together to investigate alternative jet fuels. Its creation was initiated by the aviation industry to facilitate development of fuel alternatives so private airlines can meet upcoming regulations on greenhouse gas (GHG) emissions; and so the military can gain supply security and cost stability. In September, ASTM International published a new fuel specification for aviation turbine fuels containing synthesized hydrocarbons, D7566. 

 
 While D7566 was under development, news reports on aviation testing of a nebulous "biofuel" abounded, even if most of them lacked any real definition of what kind of biofuel this was exactly: bio-derived synthetic paraffinic kerosene (bio-SPK). In June 2007, UOP LLC won a defense department's Defense Advanced Research Projects Agency award to develop and commercialize a process converting renewable feedstocks such as algae into a replacement for Jet Propellant 8 (JP-8) to be used by U.S. and North Atlantic Treaty Organization militaries. In November 2008, Air New Zealand, The Boeing Company, Rolls-Royce and Honeywell's UOP announced a collaboration to demonstrate a 50/50 blend of Jet A-1, the standard commercial aviation fuel, and jatropha-based green jet fuel. In January 2009, Continental Airlines held a demonstration flight using a similar fuel blend in a Boeing aircraft. Later that month, Japan Airlines announced a demo flight using camelina-based SPK. Six months later, 12 representatives of the companies mentioned above, plus executives from Virgin Atlantic Airways, engine maker Pratt & Whitney, GE-Aviation and others, signed a document titled "Evaluation of Bio-Derived Synthetic Paraffinic Kerosenes," displaying acceptance of the research.
 
 A common theme throughout all of those reports was the involvement of UOP, the most prolific oil refinery technology provider on the planet, and Boeing, the world's largest airplane manufacturer. According to Jennifer Holmgren, director of renewable energy and chemicals business unit for UOP, more than half of all the hydrocrackers in operation today are UOP-designed. Hydrocrackers are used by oil refiners to process crude petroleum into transportation fuels utilizing heat, pressure, catalysis and hydrogen. "I have a joke that I tell Boeing all the time," Holmgren says. "I tell them UOP has a unit in every refinery in the world-no refinery left behind," she laughs. "But seriously, UOP has a presence in every refinery in the world, literally." Boeing is the most recognized name in aircraft design and manufacturing. Terrance Scott, a member of Boeing's environmental strategy team, says when it comes to improving aviation's environmental footprint, many options available to ground transportation just aren't feasible for aviation. "We can't go with an electric plane," he says. 
 
 Airlines must, therefore, focus on making their planes more fuel efficient and embrace bio-derived synthetic jet fuels to meet future GHG reduction targets, which the EU has in place for 2012 in the form of a cap-and-trade scheme. "Any airplane flying into the EU must demonstrate its GHG reductions," says Mark Rumizen, an aviation fuels specialist with the U.S. Federal Aviation Administration, and chairman of the ASTM synthetic aviation fuel task force. Scott says there are still ways to make airplanes more fuel-efficient, by making them lighter and faster, to fly farther on the same amount of fuel. "For every one pound of fuel saved, that's 3.1 pounds of CO2 not being emitted," he says. But Holmgren says making planes more fuel efficient is not enough to meet upcoming GHG reduction targets. "We must be looking at the fuel itself," she says. According to Scott, however, aviation has a good track record overall-only 2 percent of all manmade CO2 emissions are generated by aviation. He tells Biodiesel Magazine that the aviation industry is targeting consumption of 600 MMgy of bio-SPK by 2015. "That's our goal," Scott says. 
 
 
 The UOP Process
 
 UOP is finalizing commercialization of its process technology for production of bio-SPK, targeted for completion in fourth quarter 2009. UOP is temporarily calling the production technique The Renewable Jet process until a permanent designation is given. The technology is based on UOP's trademarked Ecofining process, a commercially available, licensable technology for green diesel production. While an Ecofining unit can produce up to 15 percent bio-SPK jet fuel as a coproduct of green diesel refining, the Renewable Jet process is designed to boost bio-SPK production to 70 percent by volume. "This is achieved by optimizing the catalytic processes of deoxygenation, isomerization and selective cracking of the hydrocarbons present in natural oils and fats," the company states. 
 
 In this line of work, catalysis is everything. Holmgren says UOP's catalysts are proprietary, and small differences in yield output can make big impacts on a technology's profitability. "There once was a time when we were not big into catalysis," she says. "Now, 50 percent of our revenue comes from catalyst supply. See, processes don't change that much, but catalysts continue to improve." 
 
 The Renewable Jet process begins with standard oil cleanup procedures to remove impurities. Then, the oil is converted to shorter chain diesel-range paraffins by removing the oxygen and converting any olefins to paraffins by reacting them with hydrogen. Converting olefins to paraffins increases the thermal and oxidative stability of the fuel. A secondary catalytic reaction then takes place, which isomerizes and cracks the diesel-range paraffins (C14-C20) to shorter, highly branched molecules in the jet fuel range (C10-C14). 

 
 The resulting fuel is virtually identical to jet fuel with one exception. "It doesn't have any aromatics in it," Rumizen says. "What those do is add density to the fuel, and help maintain proper functioning of the elastomeric seals," also known as seal swell. This lack of aromatics in bio-SPK is why the new D7566 spec only covers up to a 50 percent blend. The petroleum-derived portion of the fuel provides enough aromatics for adequate seal swell.
 
 While Rumizen says the known differences between bio-SPK and conventional jet fuel are well understood, there are a couple of debates going on right now. "One is whether we can we approve a new class of fuel on just the analysis of the final fuel without controlling the process?" he poses. The aviation industry is very conservative when it comes to making changes because of the safety issues involved with flying passengers six miles high. "Do we need to worry about the process?" he asks. "Another area of question is will there be limitations on feedstocks? What about the concern of carry-through of trace materials-like with mercury in fish oil? How do we define process criteria?" 
 
 Feedstock
 
 By all accounts, bio-SPK routinely performs as well as or better than JP-8 or Jet-A1 regardless of the feedstock. One of the companies supplying feedstock to UOP for processing is Seattle-based Targeted Growth Inc. Targeted Growth was founded 10 years ago and came together with what the company calls its ground-breaking work in cell-cycle division. The company identified the gene responsible for cell cycle growth and could get cells to divide twice as fast as normal. Subsequently, Targeted Growth licensed that gene to a large seed company. 
 
 Tom Todaro, company CEO, tells Biodiesel Magazine his thoughts about working with UOP and Boeing on bio aviation fuel. "It's a huge endorsement," Todaro says. "The implicit endorsement is a reward of time spent, creating feedstock in different applications. Without the time we invested, it would have been hard." As complex as science and agronomy are, he says, they are easy compared to the effective education needed to introduce a new crop. "Growing new crops is about educating growers, farmers, grain handlers, railroads, about best procedures and practices. It's as important as, or more important, than the genetics inside the seed." He says camelina seeds are so small that if the seams on trucks aren't good and tight, for instance, some of the load will be lost. 
 
 Camelina, like algae and jatropha, is not a food crop and therefore a better candidate for fuel. Camelina is 60 percent meal and 40 percent oil, and camelina meal was just recently approved as a feed ingredient for livestock. "Economically, that's critical," Todaro says. "It's also a critical component for life-cycle GHGs." Targeted Growth planted more than 100 field-trial plots this year, Todaro says, primarily in eastern Washington, Montana and the Dakotas, with additional plots in Oklahoma and northern Texas. The wide geographical range allows for study of camelina under various water-use conditions, climates and soil types. Targeted Growth compares its yields from year to year to measure improvements, Todaro says, and this year the company is seeing a 15 percent increase over last year. 
 
 Bio-SPK from camelina has a freeze point of minus 63.5 degrees Celsius, lower than jatropha SPK at minus 57 C and petroleum Jet A-1 at minus 47 C. Scott says the group is also looking at oil-rich halophytes, or "saline-loving grass," as feedstocks.
 Aviation's emphasis to go green could put serious pressure on some biodiesel producers already on shaky financial ground. With a goal to consume 600 MMgy of bio-SPK by 2015, demand for oil and fat feedstocks could cause supplies to shrink and prices to rise. An upside, however, may be a furthering of feedstock development resulting from these partnerships, which would be good news for traditional biodiesel producers and help substantiate bio aviation fuel as a mainstream product.
 

 Ron Kotrba is editor of Biodiesel Magazine. Reach him at (701) 738-4942 or <a href="mailto:rkotrba@bbiinternational.com">rkotrba@bbiinternational.com</a>

UOP sells technology, so research and development is its biggest investment. PHOTO: UOP LLC

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The only difference between bio-derived SPK and petroleum jet fuel is the biofuel's lack of aromatics. PHOTO: UOP LLC

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Airlines are under serious pressure to reduce greenhouse gas emissions, so when the most prolific oil refinery technology provider on the planet teams up with the world's biggest airplane manufacturer, they produce results-and a new class of fuel.

A New Class of Jet Fuel

One of India's largest automakers, Mahindra GV, is preparing to launch a two-model pick-up line in the U.S. in the first quarter of 2010. Alpharetta, Ga.'s Global Vehicles USA, the exclusive importer and distributor for Mahindra, said it has between 300 and 400 retail outlets on-board to sell the TR20 and TR40 trucks. Both models are four-wheel drives with four-cylinder common rail diesel engines. "We've seen a positive trend in the diesel market, despite slight setbacks because of price," said Mike Geylin of Global Vehicles. The two-vehicle line features six-speed automatic transmissions and fuel economy greater than 30 miles per gallon as the first Indian-made motor vehicles for sale in the U.S.

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Indian automaker Mahindra  bringing new diesels to US

When several members of the American Trucking Association won SmartWay excellence awards from the U.S. EPA, Biodiesel Magazine called the ATA to see how much biodiesel figured into ATA-member fleet operators' emissions reduction strategies. "Little if any," said Rich Moskowitz, spokesman for the ATA. "Some emissions reduction practices actually decrease expenses, but biodiesel can increase them. Most of the effective methods are not related to the use of biodiesel."
 
 ATA says that it does officially support the voluntary use of up to 5 percent biodiesel that passes ASTM D975, the diesel fuel quality standard. "We are adamantly opposed to state boutique fuel mandates," Moskowitz said. 
 
 Incorporating biodiesel can increase the cost of trucking operations, but Moskowitz pointed out that depending on the EPA's final assessment, methyl esters might actually increase the carbon footprint of a fleet too. "According to life-cycle analysis and indirect land use change, biodiesel actually has a higher carbon footprint than petrol diesel," he said. "If and when the cap-and-trade system is implemented it could make biodiesel dead-on-arrival. It all depends on how EPA ultimately decides on the carbon footprint of biodiesel."
 

 The ATA put out a press release on Oct. 30 with the headline, "Climate Change Legislation Will Increase Diesel Prices, Hurt Consumers." The cap-and-trade system outlined by the Waxman-Markey bill currently under review by Congress requires oil refineries to cover their direct refining operations and the amount of carbon produced by downstream combustion of the fuels. "If EPA decides biodiesel has a higher footprint than petroleum, then refiners have no incentive to blend biodiesel," Moskowitz said. "But if EPA says the biodiesel footprint is lower, then refiners will more than likely be using more of it. If biodiesel is a low-cost alternative, refiners wouldn't have to purchase as many allowances." 
 
 The cost of obtaining credit allowances will be passed on to fuel consumers in the form of higher prices, Barbara Windsor, vice chair of the ATA, told the Senate Environment and Public Works Committee on Oct. 29. "A major petroleum supplier to the trucking industry has advised that diesel fuel costs could rise up to 88 cents," she said. 
 
 Windsor's testimony outlined alternative methods of reducing carbon emissions by the trucking industry in a 10-year sustainability plan, which included decreased idling, speed limit governance at 65 miles per hour and better highway infrastructure to relieve congestion. Biodiesel, however, received no specific mention in the ATA's plan, whose feelings about the renewable fuel remain relatively lukewarm-mostly because of price and quality issues. "The latest report from NREL said that 10 percent of biodiesel samples failed quality parameters compared to 60 percent the year before, so that's pretty incredible progress that the industry has made in one year," Moskowitz said. "A 10 percent failure rate is still completely unacceptable in this business."

The ATA has concerns regarding biodiesel use, most of which are dependent on EPA's final determination of biodiesel's life-cycle greenhouse gas analysis, expected to be completed in December. PHOTO: JACK SITTER, BBI INTERNATIONAL

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ATA: biodiesel needs to be  cheaper, better for increased use

With greenhouse gas (GHG) emissions regulations becoming more likely, a new market may emerge for biodiesel among facilities wanting to reduce their fossil fuel use by substituting biodiesel in industrial boilers that run on fuel oil, helping reduce GHG emissions from fossil sources. Already in the works for 10,000 commercial facilities is a new U.S. EPA rule requiring GHG emissions reporting that begins Jan. 1. 	
 
 EPA established a threshold for mandatory reporting of emissions of 25,000 metric tons of CO2 equivalent (mtCO2e). Most biodiesel producers are not expected to meet the threshold due to the low energy requirements of the biodiesel process. It is expected that several large ethanol plants are likely to meet the threshold, although ethanol is among several industries where compliance details will not be finalized before Jan. 1. A 25,000 mtCO2e threshold is roughly equivalent to the annual GHG emissions from about 4,600 passenger vehicles, 58,000 barrels of oil or 131 railcars of coal. For natural gas users, it amounts to 460,000 million cubic feet used per year. 
 
 The reporting rule covers fossil fuels only, and includes facilities with stationary fuel combustion such as boilers producing heat, steam or electricity in industrial, commercial or institutional settings. A facility on the threshold could reduce its fossil fuel use by substituting biodiesel or other biomass fuels. The carbon threshold is likely to be exceeded by boilers with a maximum heating capacity of 30 million Btu per hour or higher, or facilities burning more than 50 million Btu per hour of natural gas. "That's a pretty sizeable heat load," said Beau Griffey, account executive with Minneapolis-based U.S. Energy Services. "A lot of food plants probably won't make that threshold." EPA estimates 10,000 facilities nationwide will exceed the threshold for GHG emissions reporting, which accounts for 85 percent of total U.S. GHG emissions. 
 
 It isn't likely that industries will turn to biodiesel to avoid the reporting threshold, Griffey said. "The cost of reporting is probably fairly low and the cost of noncompliance may not be that great at this point," he explained. However, the cap-and-trade legislation being debated at press time does include penalties for exceeding limits, and it is anticipated that if cap-and-trade legislation isn't passed, the EPA will move to regulate GHG emissions. When GHG reduction does become public policy, substituting biodiesel and other biomass-based fuels will be an option for reducing GHG emissions.
 
 There may be another argument for widespread adoption of biodiesel as boiler fuel. Currently, industry provides a base load for natural gas use, but when winter comes and residential heating begins, natural gas rates go up. Having an alternative fuel would take the pressure off peak demand, and potentially introduce some competition to reduce rates. One industry observer pointed out many industrial boilers using natural gas are equipped with backup fuel oil systems, complete with heaters, storage and feed systems that could be used with biodiesel regardless of its cold flow properties. Biodiesel's solvent characteristics would be an advantage, the observer noted, helping to clean fuel oil's insulating soot from heat exchange surfaces. The value of biodiesel blended into fuel oil could soar if the benefit of improved heat exchange is calculated and added to the cost benefit from burning cheaper-grade fuels blended with premium biodiesel, while still meeting permit limitations on particulates and other emissions.

New policies for GHG reduction  open new biodiesel markets

After six months of negative net returns, the hypothetical soy biodiesel plant in Iowa developed by the Agricultural Marketing Resource Center showed a return to the black in September, albeit just barely at a net return over all costs of 6 cents per gallon, before dipping back into the red in October. If crude oil stays high and soy oil prices don't increase greatly, it indicates the economic pressures on the biodiesel industry may be lifting. The numbers also show just how critical it has been for the biodiesel industry to improve its efficiency and incorporate as many lower cost waste-based feedstocks as possible.
 
 Biodiesel revenue for September showed $3.02 per gallon and actually increased to $3.12 per gallon in October. However, soybean oil costs increased more, from $2.35 per gallon of biodiesel produced in September to $2.55 per gallon in October, which was still lower than the year's high of $2.73 per gallon in May 2009. Natural gas prices, at 3 cents per gallon of biodiesel produced, have stayed at that level for the last six months. Methanol costs have been creeping higher, from a spring low of 6 cents per gallon of biodiesel produced to 9 cents in September, and 10 cents in October. 
 
 AgMRC's model plant showed a total breakeven cost per gallon, including variable and fixed costs, of $2.96 per gallon for September, which rose in October to $3.17 per gallon. The net return over variable costs was 32 cents per gallon, and the net return over all costs for September was 6 cents per gallon. The net return per gallon over all costs in October dropped back into the negative at minus 5 cents per gallon, while the net return over variable costs was 21 cents per gallon.

 
 The numbers illustrate the summer of struggle for biodiesel. The net return over all costs had ranged between a negative 2 cents to negative 22 cents per gallon from April through August, with May being the poorest month. The importance of keeping fixed costs as low as possible was demonstrated in the values for net return over variable costs, which remained in the black throughout the entire period, with May being the lowest month at 4 cents per gallon. 
 
 The overwhelming impact of soybean oil prices, amounting to nearly 90 percent of the overall cost of biodiesel production, is shown in the comparison of September's improving numbers with the poorest month, May 2009. The biodiesel revenue for that month was actually slightly higher than September at $3.10 per gallon. However, soy oil was 38 cents a gallon higher at $2.73 per gallon. AgMRC's model plant showed a total breakeven cost per gallon, including variable and fixed costs, of $3.32 for that low month of May 2009. The net return over variable costs was 4 cents per gallon in May and the net return over all costs was a negative 22 cents per gallon. 
 
 The downturn followed almost a year of positive returns. Much of 2008 saw net returns over all costs starting in March of 2008 through March of 2009. During that year, biodiesel revenue started at $5.16 per gallon, peaked at $5.51 in June 2008 and dropped to $2.68 per gallon when the net return over all costs dropped into the red. The Energy Information Administration reported the spot diesel price in Chicago in October 2008 was $2.85 cents per gallon.
 
 While the AgMRC data may provide a trend line for an Iowa-based hypothetical soy biodiesel plant, it doesn't illustrate the entire picture. Last month's return to the black in the AgMRC profitability chart showed a biodiesel breakeven cost of production of $2.96 and an Iowa-based biodiesel price of $3.02. That compares with EIA reports of Chicago spot prices for No. 2 diesel that averaged $1.74 per gallon during September, putting biodiesel at an uncompetitive price even with the $1 per gallon blender tax credit. It does, however, give an indication that the pressure on the biodiesel industry may be letting up, particularly for those plants that have successfully transitioned to multi-feedstock capability, producing ASTM quality fuel while blending in lower cost, waste-based feedstocks with soybean oil.
 
 Agricultural economists specializing in biofuels at Iowa State University update the prices and costs on a monthly basis on the Biodiesel Profitability Chart. The chart uses a hypothetical 30 MMgy soy-based biodiesel plant built in 2007. Basic assumptions about fixed and variable costs and efficiency rates are provided, and actual numbers can be substituted on the "Economic Model" tab of the spreadsheet. Price data for the hypothetical plant is taken from publicly available sources, with all prices based in Iowa starting with April 2007. To access the Biodiesel Profitability Chart, visit www.agmrc.org and follow the links on the left to renewable energy/biodiesel/profitability.

Biodiesel trends are charted in the AgMRC Biodiesel Profitability spreadsheet for a model Iowa-based 30 MMgy soy biodiesel plant. Weekly biodiesel prices as reported in the USDA National Weekly Ag Energy Round-up are averaged monthly. Daily soybean o

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Model plant shows brief return to profitability

Soy biodiesel's energy ratio calculated by researchers at the USDA and University of Idaho has improved dramatically in the past decade. Using a life-cycle analysis (LCA) from field to pump, the fossil energy ratio has grown from the 3.2 ratio reported in a 1998 study to nearly 4.6 in a report released this fall.
 
 Biodiesel conversion used the most energy, accounting for about 60 percent of the total energy required in the LCA. Soybean agriculture accounted for 18 percent of the total energy requirements, with diesel fuel for field operations contributing the biggest share. Close behind the agriculture contribution was soybean crushing, which required almost 15 percent of the total energy. The net energy value (biodiesel energy output minus fossil energy input) was about 91,000 Btu per gallon. The Fossil Energy Ratio calculated to 4.56, which is 42 percent higher than the ratio reported in 1998.
 
 A major reason behind the improved number was a 58 percent reduction in the energy requirement for crushing, the study noted. Soybean crushing facilities are far more energy efficient now than a decade ago, plus the U.S. EPA now requires crushers to limit their hexane use. The energy required for transesterification estimated in the new study was about 12 percent lower than the first study. The fossil energy needed for electricity decreased, and methanol usage decreased; however, natural gas and steam usage slightly increased.
 
 The second largest contributor to the improved energy ratio was a 41 percent reduction in the fossil energy inputs for soybean agriculture. The increased adoption of no-till practices by soybean farmers reduced fuel requirements for tillage operations. Widespread use of genetically engineered soybeans has reduced pesticide requirements, and soybean yields have improved due to new seed varieties, improved fertilizer and pesticide applications, and new management practices. 
 

 The improvement in agriculture's decreased energy inputs is most likely understated in the new study, which used 2002 soybean production data. The 1998 study suffered from the same limitation using 1990 data. However, the quality of the data is important and, in this case, included actual farming practices employed by soybean producers. USDA periodically conducts a detailed farm survey on crop production practices. The most recent data, collected in a survey conducted in 2006, was not yet available when the newest energy balance study was undertaken. The researchers, however, did look at the impact of improving soybean yields on the baseline data, and found that for each bushel increase in soybean yield, the energy ratio increases by 0.45 percent. They noted that USDA projections call for soybean yields to increase annually by about half a bushel per acre. Holding all other variables constant, the energy ratio of soybean biodiesel is estimated to reach 4.69 in the year 2015, when the average U.S. soybean yield is projected to increase to 45.3 bushels per acre.
 
 While the baseline study was conducted using the same parameters to allow a good comparison with the 1998 study, the researchers reworked the numbers incorporating other energy contributions to assess the impact. The original study, for example, did not incorporate values for agricultural machinery and the energy embodied in building materials. Calculating the ratios with those inputs included lowered the energy ratio from 4.56 to 4.40, which the study noted is still considerably higher than the 3.2 energy ratio reported in 1998. The researchers considered other variables as well. The generic 10 MMgy biodiesel plant modeled in the study included a collocated crushing plant. When the energy value was included for transporting soy oil from an independent crusher to the plant-a common scenario in the industry-the energy ratio dropped to 4.41 from the baseline result of 4.56. 
 
 The National Biodiesel Board trumpeted the benefits of biodiesel in announcing the findings. Biodiesel returns more than four times the energy than it takes to make biodiesel, the NBB pointed out, while oil exploration and drilling is becoming more intensive.

Source: Energy Life-Cycle Assessment of Soybean Biodiesel, Sept. 2007 USDA AER No. 845

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Soy biodiesel energy ratio  climbs 42 percent since 1998

United States trade relations with the EU remain strained in late 2009 with soybeans and biodiesel being at the center of the controversy. Unapproved genetically modified crops are causing EU processors to source beans from nontraditional channels, and low-level biodiesel blend imports are prompting protectionist statements from the European biodiesel industry. 
 
 FEDIOL, the organization that represents the European seed and bean crushers, as well as meals, oils and fats processors, stated in October that the EU's zero tolerance policy toward unapproved genetically modified (GM) crops "increase their warnings over the severity of the problem of scarce soybean supplies in the EU after agriculture ministers meeting yesterday again failed to take responsibility for dealing effectively with the issue. Without a clear and effective response-urgently-the problem will get far worse." 
 
 John Dodson, Tennessee soybean farmer and former president of the American Soybean Association, said that importers and exporters do not want to take the chance of a "boatload of beans" being stopped at a port and losing the money of the delivery contract. 
 
 Since minute traces of U.S. approved genetically modified maize not yet authorized in the EU were discovered in consignments from the U.S. in August 2009, which breeched the EU's policy of zero tolerance, around 180,000 tons of U.S. soybeans have been denied entry to the EU, FEDIOL said. "Whatever precautions are taken, it is not possible to guarantee the absence of minute levels of foreign materials, other than by ceasing the trade altogether, a problem the EU's own Joint Research Centre has also recently identified in its report on the GM pipeline."
 
 Three of the four GM corn events have been approved and the EU is likely to approve the last before the end of the year, Dodson told Biodiesel Magazine. "For those having to source non-GM soybeans from South America this time of year, the cost is significant," Dodson said. "South America is about out of soybeans and the cost is greater because the shipping distance [from South America to Europe] is farther especially when compared to New Orleans and other U.S. ports on the East Coast." 
 Natalie Lecocq, director general for FEDIOL, said in November that EU buyers have paid a premium price for soybeans from Latin America. EU members crush 30 million tons of oilseeds every year and comprise the second largest world market for vegetable oils after China. "It's exactly right that soybeans from Latin America get scarce this time of year," Lecocq said. "We hope that the MIR-604 corn is approved by the end of the year but there is a lengthy approval process that must be followed according to EU rules, which cannot be circumvented." 
 
 With the current lack of alternatives and still no immediate action from the European Commission to propose a technical solution in the form of a so-called "low-level presence (LLP) threshold" for food and feed, this situation will leave Europe's farmers, livestock producers and agricultural trade, "as well as food and feed processing industries, in an extremely precarious position, keeping the global competitiveness of the EU agricultural sector at risk," FEDIOL said. "The threat of layoffs in the trade and processing industries of already vulnerable livestock farmers going out of business, and of consumers being hit through knock-on effects on choice, availability and price all still remain."

 FEDIOL further urged EU Health Commissioner Androulla Vassiliou to come forward urgently with a proposed technical solution on zero tolerance for food and feed. "Without it, the situation could prove explosive for the whole food and feed chain," FEDIOL said. 
 
 In other trade imbroglios, the European Biodiesel Board said it suspects U.S. competitors are exporting a new blend to Europe to avoid EU tariffs that stopped millions of dollars in international fuel commerce. 
 
 The EU, the world's biggest biodiesel market, imposed tariffs in March and five-year measures in July to counter the U.S.' $1-per-gallon blender credit, which it says allow American producers to sell biodiesel in Europe under production costs. Biopetrol AG, the producer based in Zug, Switzerland, and other interests of Europe's biodiesel industry have been aggressive in their statements regarding imports, not only from the U.S. but also South America and palm methyl esters from Asia. 
 
 "We are worried about trade that may undermine the effect of the duties," Amandine Lacourt, spokesperson for EBB, told Bloomberg in early November. "It's a matter of survival for European producers to have these measures in place given the market distortions caused by the U.S." 
 
 EBB has consistently lobbied to widen the "anti-dumping" legislation that currently covers blends of B20 and above. According to the Office of the U.S. Trade representative, 140,000 tons (42 million gallons) of U.S. biodiesel in the form of blends not covered by the duties have entered the EU since April. Despite the controversy, Netherland's Port of Rotterdam, where almost all biodiesel imports enter the EU before they are distributed, reported in October that it is increasing its methyl ester handling capacity.

U.S. soybeans have seen limited entry into Europe since GMO corn dust in an August shipment had basically prohibited further delivery. PHOTO: SUSANNE RETKA SCHILL, BBI INTERNATIONAL

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GMO, biodiesel situations  looming heavy on trade relations

Chrysler suspended operations at its primary diesel factory earlier this year and finalized a merger with Fiat Group, which is a leader in diesel production. There has been much speculation about what the merger means for Cummins, which has been a Chrysler supplier for years but had its contract cancelled as part of Chrysler's bankruptcy proceedings earlier this year. 
 
 There was a brand new light-duty engine for the Dodge Ram 1500 that Chrysler did not assume because of the bankruptcy. "Our all-new Cummins engine will offer future Dodge Ram 1500 customers the ultimate in terms of fuel economy, refinement, reliability and durability," Frank Klegon, executive vice president of product development for Chrysler Group LLC, said last spring. "It's another example of Dodge bringing new, clean, quiet diesel technology to the marketplace."
 
 But the new diesel 1500 never hit showrooms. This caused Cummins to lay off hundreds of employees temporarily, but things have improved since Chrysler's restructuring. "So much has changed," said Carol Lavengood, media liaison for Cummins. "We have a new contract for the 2010 2500 engine and we have an increased number of orders, and we even recalled some of our employees that were laid off."
 
 The production and marketing of the lighter 1500 model truck has changed slightly because of the technologies and options available to Chrysler now as a result of its partnership with Fiat, said Nick Cappa, spokesman for Chrysler. 
 Outside of North America, Cummins is planning to manufacture a 2.8- and 3.8-liter light-duty diesel engine in a deal with Photon of China. In Europe, diesel-powered models account for more than half of Chrysler's sales. Diesel versions of numerous vehicles continue to be popular, including the Chrysler 300C, Chrysler PT Cruiser, Jeep Grand Cherokee and Jeep Compass, as well as the Dodge Caliber and Jeep Wrangler. 

 
 Chrysler announced that the first Fiat it plans to offer is the Fiat 500 minicar, arriving at the end of 2010. Fiat will have the lead in the development of models with 1.8-liter and larger diesel engines. That will not necessarily change the relationship, however, between Cummins and Chrysler. "The Cummins engine is a legendary engine in the Ram line," Cappa said. "But Fiat also has a long history with the diesel engine and even invented the common rail diesel technology, so we look forward to adopting some of their designs, like the multijet." Chrysler's new five-year plan is based on incorporating 12 Fiat-designed models by 2013, ending production of six to eight underperforming models and revamping all 12 models they intend to keep by 2012, according to Joe Veltri's "product plan" presentation released Nov. 4. The new Fiat cars won't arrive in Chrysler's lineup until 2012 or 2013, except for the 500 city, but Fiat will be adding its designs to virtually every type of Chrysler product.

Chrysler plans to introduce several Fiat models to the U.S within the next four years, such as its 500 minicar seen here on the assembly line. PHOTO: FIAT

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Chrysler's partnership with  Cummins not altered by Fiat deal

Looking back on the past year and beyond, I imagine our industry feels much like Captain Cook and crew of the Endeavor must have after they nearly lost all in a collision with the Great Barrier Reef. The team's ingenuity and quick thinking brought them safely down from the reef and enabled repairs, yet their trials continued. After surviving a brush with certain disaster and patching their ship, crew members found themselves trapped between the Australia coastline and the Great Barrier Reef with no apparent way out. 
 
 Since 2008, our industry has been hit by numerous trials. Like the Endeavor's collision, several events and realities came together all at once to send the biodiesel industry into a significant state of contraction and negative growth for the first time since its commercialization. Some of the challenges include the following: 
 
 1. Feedstock costs became highly correlated with crude oil prices and followed crude to a high of more than 70 cents per pound in March 2008 (compared to a 20-year historic average of 23 cents) 
 2. A global credit crisis put a tremendous squeeze on operating capital 
 
 3. A global economic recession caused a collapse in diesel fuel demand and prices 
 
 4. A trade dispute that resulted in European tariffs closed off access to the single largest diesel market in the world
 
 5. Uncertain federal policy signals such as a delayed implementation of the revised renewable fuel standard (RFS2) and a flawed proposed rule that threatened to disqualify almost 70 percent of domestic feedstock 
 
 6. A well-funded and well-coordinated attack on biofuels throughout 2008-'09 by the Grocery Manufacturers Association, environmentalists and others attempting to disparage biofuels' sustainability including indirect land use change, food-versus-fuel, water usage, and energy balance
 

 
 Any one of these factors would have posed a serious challenge to the industry. However, the combination of these factors was overwhelming, leading to widespread idling, shuttering and even bankruptcies of biodiesel plants.
 
 Though most of the trials of the past years were beyond the scope and control of NBB, we had identified some as major challenges on the horizon. Comprehensive programs to counter misinformation with confirmed science have helped dull the impact of some of these otherwise devastating attacks. 
 
 Just as the crew of the Endeavor did not let an obstacle like the Great Barrier Reef end its voyage, the U.S. biodiesel industry has not been beaten. It is surely battered and bruised, yet still afloat and still working towards healthy, long-term, sustainable industry growth. 
 
 The legend of Captain Cook would be no legend at all had the Endeavor remained trapped at sea. Instead of turning back or giving up, the good captain anchored on what he named Lizard Island. The island offered a vantage point from high above the waters and threatening reef. After a rough climb to the top, the captain was able to look ahead, examine the terrain and identify a safe passage through the reef. 
 
 Looking forward, we will continue successful offensive and defensive countermeasures and refocus efforts to support our members. Federal regulatory issues surrounding the biodiesel tax credit and RFS2 remain our top priority. The issue of indirect land use change and how it impacts biodiesel's life-cycle carbon assessment across our diverse feedstock base will undoubtedly determine biodiesel's role in future federal and state energy policy. This will drive future economics of biodiesel production and sales, impacting the industry's overall success. 
 
 Our industry is similarly poised atop Lizard Island. We have weathered the worst of the challenges and now look ahead to signs of recovery in 2010.

Goodbye 2009

NBB's 7th annual National Biodiesel Conference & Expo is headed south to Grapevine, Texas. Now, in addition to the great networking, education and business opportunities the biodiesel industry has come to expect from the conference, we'll welcome the spice of Texas to the table.
 
 Special sessions will highlight everything biodiesel in the Lone Star State, and the Biodiesel Coalition of Texas has joined forces with NBB for its annual event. BCOT will host sessions focused on Texas-specific topics designed just for its members, as well as help coordinate feature events with local biodiesel leaders. 
 

 "We're excited to be a part of the biggest biodiesel conference of the year, and glad to help welcome our biodiesel colleagues to Texas," said Jess Hewitt, BCOT president. "NBB's Biodiesel Conference and Expo promises to offer something for everyone-BCOT members, biodiesel leaders and industry stakeholders alike."
 
 The Dallas-Fort Worth area is a hotbed of biodiesel use. NBB put together a DFW advisory committee to help maximize the local resources there. The committee has met with NBB twice, providing valuable input on educational sessions and speakers, possible media events, and vehicle showcase ideas. The advisory committee includes Mindy Mize and Pamela Burns, Clean Cities program; Ramiro Lopez, City of Irving; Randy Rendon, City of Ft. Worth; Gene Holloway, Denton Independent School District; and Mark Farrer, Direct Fuels.
 
 Our conference destination, The Gaylord Texan, is known for its authentic Texas style and hospitality. The property overlooks beautiful Lake Grapevine and is centrally located, featuring four and a half acres of indoor gardens and winding waterways, fine dining, and casual restaurants, unique shops, live music, and dancing. 
 
 NBB knows from past attendees and exhibitors that they attend the conference to network with the numerous biodiesel marketers, feedstock growers, fuel distributors, government leaders and other biodiesel stakeholders. From our new Monday evening reception and Biodiesel Networking Center both in the Exhibit Hall, to a new and improved NBB Connections social networking system and numerous open forum "conversessions," the conference will make it easy for you to connect and learn! 
 Visit www.biodieselconference.com to register today.

Biodiesel Conference & Expo offers do-not-miss opportunities

The holiday season includes much to love-big meals, family, gifts. Of course, for many, holidays also mean travel. Whether it's an overnight stay to visit in-laws or a winter getaway with friends, there are more opportunities than ever to make biodiesel a part of the plans. What may be surprising is that those opportunities extend beyond just getting from here to there. 
 
 In fact, hotels across the nation are using biodiesel. For example, the Hilton Americas–Houston hotel relies on biodiesel to power emergency generators. In a bid for Leadership in Energy and Environmental Design, or LEED, certification, the hotel turned to cleaner burning biodiesel as an alternative fuel. The 1,203-room hotel received its first shipment this summer.
 
 Bioheat heating oil is also a popular staple in many Northeast hotels and bed and breakfasts. Though not always a part of marketing materials, hotel proprietors are always happy to provide details when asked. 
 So as you make plans to spend time with friends and relatives, consider using those establishments that use and support biodiesel.

NBB encourages biodiesel travels

Several developments are underway that anticipate B20 becoming a much more ubiquitous blend in the retail and on-road fuel markets. New products from Chevron Oronite Co. LLC, Ford Motor Co., New Holland NV and others indicate that major industrial forces are accepting the fact that biodiesel will have an increased role in transportation fuel needs in the coming years. There are still barriers, however, to the proliferation of B20, and infrastructure needs are stunting the blend's growth. 
 
 The U.S. EPA and the National Highway Traffic Safety Administration presented the biodiesel industry with a considerable opportunity in September. Previously, the Energy Policy and Conservation Act provided an incentive under the Corporate Average Fuel Economy program for production of dual-fueled vehicles, or flexible fuel vehicles (FFV) and dedicated alternative fuel vehicles (AFV), but biodiesel-fueled vehicles were not included-until now. 
 
 "We see it as a positive that fleets will get corporate average fuel economy credits for using biodiesel," says Gary Parsons of Chevron Oronite, which recently introduced an engine oil additive for biodiesel. This "historic national program" was outlined in a 1,200 page proposal published in September. EPA is proposing that FFV and AFV credits be calculated as part of the manufacturer's overall fleet average fuel economy, which could also help minimize fleet average carbon-related exhaust emissions. Notably, the proposed rule would treat B20-compatible models as "flex-fuel vehicles," similar to the ethanol/gas motors already receiving benefits. 
 
 In August, U.S. DOE Secretary Steven Chu announced the selection of 25 cost-share projects under the Clean Cities program that will be funded with nearly $300 million from the American Recovery and Reinvestment Act. "These projects will speed the transformation of the nation's vehicle fleet, putting more than 9,000 alternative fuel and energy efficient vehicles on the road, and establishing 542 refueling locations across the country," DOE stated. 
 
 Trotec Fuel Management LLC was recently selected by Clean Cities to negotiate the distribution of funds set aside to assist in the opening of 30 E85 and B20 stations throughout Florida, Alabama and Georgia. This project will provide E85 and B20 every 200 miles or less, enabling drivers to travel from Sault Sainte Marie, Mich., to Miami using only alternative fuel. 
 
 "The on-road passenger vehicle market for B20 is the fastest growing," says Robert Dascal, Houston regional sales manager for the Renewable Energy Group Inc. 
 
 In other developments, the National Renewable Energy Laboratory's new TransAtlas interactive map tool makes connections between diesel vehicle density by region and the availability of biodiesel refueling stations in the area so that entrepreneurs can decide where the best places to install new stations or terminals might be. Kinder Morgan has announced the successful pipeline transport of biodiesel, and other regional and local efforts are also on point to increase the B20 infrastructure. 
 Terminal infrastructure, however, is a limiting factor in distributing B20, NREL says. There are currently no UL listed storage tanks or dispensers for blends higher than B5, but most appear compatible with B20 already. DOE says that are currently 697 biodiesel fueling stations in the United States, 50 percent of which are open to the public. "The biodiesel market so far has been driven by economics," Parsons said. "Customers might want to support the environment and the local economy, but when it comes to a premium price, they don't necessarily want to pay at the pump. So the new federal programs will definitely expand the biodiesel market."
 	

 Big Players
 Chevron Oronite, subsidiary of the mega oil company, continuously works with OEMs to produce stable "fuel atmospheres" for vehicles. Parsons, industry liaison for Chevron Oronite, says the company often must be able to "look into a crystal ball" and predict patterns in fuel usage, along with the challenges associated with major changes. "In talks, especially with Japanese and European OEMs, we saw biodiesel playing a much larger role," Parsons says. "There's a perception that we might be anti-biofuels, but we see biodiesel not as a threat, but an opportunity." 
 
 Ford has focused its efforts on providing the essential material compatibility needed to burn biodiesel at higher blends. "I can't tell you too much about what materials we've used [in the SuperDuty] because that is getting into the area of giving away trade secrets, which could provide our competitors with an advantage," Ford engineer Adam Gryglak tells Biodiesel Magazine. 
 
 "That's been the largest portion of our work, assuring that the materials are compatible with B20." Testing methods involved exposing materials to an oxidized batch of fuel-what Gryglak calls "aggressive biodiesel"-under pressure and elevated temperatures. "We've learned a lot," he says. "For instance, we've found that different zinc alloys have not fared well with biodiesel."
 
 Mineral diesel forms acids too, but it's sulfuric acid, which interacts with metals in different ways than materials formed when biodiesel is combusted, having a higher boiling point than mineral diesel. "We've spent a lot of time and energy on that," Gryglak says. Chevron's additive works to neutralize the organic acids and minerals that can form deposits. Biodiesel does not evaporate and can remain in the crank case. Also, because of the hydrophilic characteristics of biodiesel, water can build up. "Fuel systems don't like that," Gryglak said. "So we also have a water switch that tells drivers they might have a problem."
 
 After a lot of research and testing in this area, Chrysler Group LLC, General Motors Corp. and Ford-the Big Three of American auto manufacturers-have now all approved B20 blends under their warranties. GM's 2011 model year 2500 and 3500 Silverado and Sierra pickups can run on B20 under warranty, said Dave Barthmuss, spokesman for GM. Along with the upgrades to the lines, seals and fittings required for the B20 fuel, GM has avoided post-injection of diesel fuel in the cylinder, in favor of injecting the fuel directly into the exhaust to purge the soot that collects in the diesel particulate filter (DPF). This approach obviously decreases the fuel dilution potential related to post-injection. 
 
 New Holland, the heavy equipment OEM has also begun production of B20-approved tractors for certain agricultural applications. The series is composed of three models, all with four-wheel drive as standard, featuring 69, 76 and 84 horsepower systems fully compatible with B20. "The more products that are available and the more drivers see emblems on vehicles that say 'B20 approved,' the more use we're going to get out of it," Dascal says. John Deere and Caterpillar have also approved B20 for use in some models. 
 
 "Several French auto manufacturers are also working on engines that are suitable to burn blends as high as 30 percent biodiesel," says Falk Von Kreigsheim of Germany's Petrotec AG. "Blends higher than seven percent are currently prohibited [in the EU] but there are efforts to approve blends up to 30 percent, although those are far off on the horizon." 
 
 What blends are sold at the rack isn't really determined by biodiesel producers. It is the terminals and other distributors that decide what blends to offer as a result of demand. The fact is that most petroleum distributors offer only B5, B10 or B20 blends. "We are seeing increased sales of B20," Dascal says. "Added lubricity combined with some of the emissions reductions benefits, fleet operators are seeing the benefits of higher blends." 
 

 "The work to get this specification"-the stand alone B6 to B20 blend spec-"in place came at the request of the OEMs," Dascal says, adding that REG works to ensure that the fuel it produces does not only meet but exceeds quality standards. 
 
 "Great strides have been made in approving B20, but there is still the opportunity to get a bad batch of fuel," Gryglak says. "So we introduced a low pressure supply switch." When biodiesel gels at cold temperatures, fuel pressure drops. The switch notifies drivers that there might be a problem. "We have to make sure that these meet our 10 years of service/250,000 mile warranty," Gryglak says. 
 
 The official comment period regarding the implementation of RFS2 is officially closed, and the EPA's final rule should be announced around Thanksgiving, says Kevin Carroll of Illinois' Growmark Inc. "This will be very good for the increased use of biodiesel," he says. In addition, companies such as Chevron and Ford counting on increased levels of biodiesel in future applications is a positive sign that the industry may be turning a corner. "Seeing some of the larger players in the economy start to get on board is definitely good," Carroll says.
 
 
 Nicholas Zeman is an associate editor for Biodiesel Magazine. Reach him at (701) 738-4972 or <a href="mailto:nzeman@bbiinternational.com">nzeman@bbiinternational.com</a>.

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Vehicles under warranty by original equipment manufacturers (OEMs) to use B20 could claim "flex-fuel" status soon. A new U.S. EPA ruling provides incentives to OEM fleets that build B20 models such as Ford's Super Duty 350, which will be equipped to handle the blend beginning in 2011. Also, because of its characteristics as a blended fuel, some producers are seeing increased demand.

B20: The Best  of Both Worlds

What is the next big thing in biodiesel feedstocks? Will revolutionary new feedstocks be able to pass ASTM specifications for biodiesel? What will their fatty acid profiles look like? 
 
 New comparative research data is now available as a free, industry-wide resource to aid developers, suppliers and researchers determine the characteristics of various feedstocks. Armed with 15 years of biodiesel feedstock commercialization expertise and lab-scale pretreatment and production that mimic commercial processes, Renewable Energy Group Inc. has released its "Biodiesel and Feedstock Characteristics Report." 
 
 The report showcases benchmarks for traditional and unique oils and fats, as well as resulting biodiesel characteristics for more than 30 different, property-variant feedstocks. 
 
 Samples tested in the REG-produced comparison study include oils and fats already used in commercial biodiesel applications, such as soybean and canola oils, used cooking oil, poultry fat, beef tallow and corn oil removed from ethanol plant stillage. Other lesser known feedstocks characterized in this report, many of which are typically difficult to acquire and have not been widely studied or cited in industry literature, include coffee, rice bran, jatropha, algae, jojoba, fish and hemp oils. 

 
 With the onset of the revised 2009/2010 renewable fuel standard volume requirements, the biodiesel industry will require more than 1 billion gallons of biodiesel feedstock. As biodiesel production capacity grew drastically in recent years, multi-feedstock manufacturing capabilities improved across the industry. 
 
 These advances in biodiesel process technology, paired with increased finished fuel demand, necessitate sound feedstock science. What led REG's Technology and Feedstock Development team to propose this broad feedstock study was the demand for feedstock comparisons in empirical, repeatable studies in order to create an unbiased feedstock commercialization outlook.
 
 Through a grant by the Iowa Power Fund administered through the Iowa Office of Energy Independence, REG completed the biodiesel industry's largest feedstock and B100 characterization study, combining feedstock quality testing and finished biodiesel quality testing results for more than 30 feedstocks. The results of the study are now available online at www.regfuel.com. 
 
 
 Apples-to-Apples Feedstock Comparisons
 
 Each feedstock characterized in this study was obtained as a crude oil or fat; if a crude oil sample was not available, a refined oil sample was used. REG analyzed the oils and fats for components such as sulfur, magnesium, phosphorus, moisture and other characteristics. REG researchers also completed a fatty acid profile on each of the resulting biodiesel samples and have included those results.
 
 Biodiesel was produced from each of the feedstocks and tested for compliance with ASTM D6751 specifications. To produce the biodiesel, REG designed a uniform method for pretreating the crude feedstock, esterifying the free fatty acids, transesterifying the triglycerides and filtering the finished methyl ester. The production method used in the study was based on a literature review and REG's extensive knowledge of biodiesel production techniques. Eliminating the variables of pretreatment and production allowed for a more direct comparison of the feedstocks. Each method is detailed in the published report to allow future research to build upon the data set. 
 
 Most feedstocks produced biodiesel that meet the ASTM specification, albeit with a wide variety of performance characteristics. Operational parameters such as cloud point, viscosity, density and cold filter plugging point produced a wide range of results in the study. 
 

 Two of the more technically interesting feedstocks in the study were castor oil, a woody crop oil, and Lesquerella, a row crop oil. Both oils had impressively low cloud points, however further evaluation found higher than expected cold filter plugging point (CFPP) temperatures. This was an interesting finding because CFPP is typically below cloud point.
 
 Biodiesel made from castor oil was analyzed to have a cloud point temperature of minus 13.4 degrees Celsius but the CFPP was 7 C. Because fatty acid profiles were compiled for each feedstock, the REG team was able to attribute the very low cloud point of castor oil methyl ester to the presence of about 90 percent ricinoleic acid. Biodiesel made from Lesquerella oil also has a low cloud point temperature, minus 11.6 C. The methyl ester of Lesquerella contains about 66 percent of lesquerolic acid, which is similar to ricinoleic acid, leading to the low cloud point of methyl esters made from Lesquerella oil.
 
 Although castor oil and Lesquerella oil boast low cloud points, their physical characteristics include higher than usual viscosities. Specifically, biodiesel from castor oil had a viscosity of 15.25 square millimeters per second (mm2/s) and Lesquerella had a viscosity of 10.02 mm2/s. The ASTM D6751 limit is 1.9-6.0 mm2/s. These explain the high CFPP values because CFPP depends on viscosity while cloud point does not. The fatty acid profile also explains the higher viscosity values. 
 
 This provides a good example of the value of the combination of fatty acid profile data paired with feedstock and finished fuel characteristics found in the final publication. 
 
 Oct. 1 marked the first day the Internal Revenue Service required B100 to pass cold soak filtration testing in order to qualify for tax credits. The REG study shows biodiesel with higher cloud points, such as the 16 C cloud point temperature of beef tallow, can still show very good cold soak results (76 seconds), and some with low cloud points such as tung biodiesel (minus 10 C) were unable to pass. 
 
 
 Full Study Results Available 
 
 Nowhere in the industry have this many feedstocks been compared in an apples-to-apples research format. This research provides current and potential biodiesel feedstock suppliers and producers with key information on the physical and chemical characteristics of both feedstock and finished fuel. The publication of these feedstock benchmarks and finished methyl ester characteristics represents a major advancement in answering market viability and commercialization questions for the biodiesel industry. 
 
 More than 100 pages of methodology and testing results are available free of charge to the industry. To learn more about the study, please contact Glen Meier. To download a copy of "Biodiesel and Feedstock Characteristics Report," click <a href="http://www.regfuel.com">here</a>.

 
 Glen Meier is the director of technology and feedstock development for Renewable Energy Group Inc. Reach him at (515) 239-8035 or <a href="mailto:glen.meier@regfuel.com">glen.meier@regfuel.com</a>.

Crude Oils and Fats Studied Source: Reg Inc.

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A comprehensive report profiling an array of biodiesel feedstocks and resulting methyl esters has just been completed by Renewable Energy Group Inc., and is available pro bono to the biodiesel industry.

Biodiesel and Feedstock  Characteristics Report: A Summary

The NBB's communications team is growing, giving the industry more resources to define and defend biodiesel. NBB welcomes the promotion of Jessica Robinson to director of communications. Robinson has served as senior communications specialist since January. 
 
 After almost 10 years as the NBB's director of communications, Jenna Higgins Rose is leaving the organization to begin her own consulting practice, Rose Media, and to spend more time with her young son. She will remain a part of the NBB team as a senior communications advisor. 
 

 The NBB is also hiring a communications and members specialist to support popular member services, such as daily news clips and the Member Minute, as well as ongoing industry communication. Michael Frohlich, director of federal communications, continues to lead communications efforts in the NBB's Washington office. 
 
 These changes provide more resources with minimal impact on the organization's budget. They come at an opportune time, as the past year continues to challenge biodiesel's positive image. Although public opinion research shows voters view biodiesel favorably, a sustained barrage of uninformed criticisms could weaken that support. A strong communications team is more important than ever to defend and define biodiesel to consumers, and promote it as the sustainable, sensible fuel that it is.

Jenna Higgins Rose senior communications advisor

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Jessica Robinson director of communications

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Growing challenges, growing team: NBB communications department expands

School bus driver Linda Rogers remembers the winter days with thick, blue smoke fouling the air around the buses. Those were the days before her district switched to a B20 biodiesel blend. 
 
 "Since switching to biodiesel, it is much cleaner and smells much better," said Rogers, a 20-year veteran of St. Johns, Mich., public schools. "When fueling, you don't have the smell on your hands all day. Your clothes don't smell like diesel all day. It is a much better work environment and much healthier for the kids and the community." 
 
 The school district's switch to B20 in 2002 came from the persistence of Wayne Hettler, the St. Johns schools garage foreman and head mechanic. His foresight has led to a reported track record of bus longevity and reduced service needs, saving the school district money. 
 
 In October, "bus #14" rolled over 300,000 miles-the majority of them on B20. Hettler believes no other Michigan school bus used on a daily route has achieved this milestone. He attributes this longevity and its low maintenance costs to B20. The only unscheduled maintenance on bus #14 was a $160 lift pump and a $90 injector, according to Hettler. In addition, because biodiesel adds lubricity to the engines, St. Johns has extended the intervals between oil changes, cutting filter costs by more than half.
 
 Fourteen of St. Johns' 28 buses have more than 200,000 miles, and total bus fleet mileage on B20 is far more than 3 million miles. 
 
 Hettler adds, "I think I'd have a revolt on my hands if we ever went away from the biodiesel. And, I know without a doubt that driver absenteeism has also gone down since we've fueled with B20. Using B20 has extended the life of our buses and saved our tax payers money without jeopardizing safety."

St. Johns, Mich.'s school buses traveled more than 3 million miles on B20. 

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Michigan school buses go the 'extra miles' on biodiesel

The Christmas tree illuminating the foreground of our nation's Capitol will be a little greener this year thanks to help from the National Biodiesel Foundation and others. The Capitol Christmas Tree made its way from its home in Arizona to Washington, powered by cleaner burning biodiesel. 
 
 Working with the State of Arizona, Southwest Industrial Rigging, the Tucson Regional Clean Cities Coalition and generous sponsors, NBF helped the tree's host state make real its dream of a cleaner trip for the Christmas tree.
 
 "We are honored to be the first state to deliver the tree in a clean, green manner," said Richard Davalos, coordinator of the Capitol Christmas Tree, as the tree embarked on its journey. "We are also honored to help promote reducing America's dependence on foreign oil." The route allowed for refueling with biodiesel and featured public education and outreach events. 

 
 "This is a great undertaking, and one that Arizona should be proud of," said Tom Verry, NBF executive director. "We are happy that renewable, cleaner burning biodiesel will be part of our Capitol's Christmas tradition."
 
 The tree was cut from the Apache-Sitgreaves National Forest, which led the overall Christmas tree program (www.capitolchristmastree2009.org) this year with support from many partners and sponsors.
 
 "The process is honorary and historic, a production like none other," said Clean Cities Manager Colleen Crowninshield. "Arizona has a grand opportunity to showcase the Grand Canyon State with a tree that will illuminate the foreground of the nation's Capitol with all the magic and splendor representative of our great state."

National Biodiesel Foundation supports U.S. Capitol Christmas Tree

Among biodiesel's many advantages are its environmental benefits. The NBB office has made every effort to maintain the industry's commitment to sustainability. From recycled carpet to solar energy, the board office is a model sustainable building, and it makes sense that printing projects should be sustainable too.
 
 While most NBB material remains electronic, there are still projects that include a hard copy component. For printed jobs, NBB has partnered with a local Forest Steward Council and Sustainable Forest Initiative certified printer, Lake Printing Co. Inc. 
 
 "Empowering our clients to make educated environmental choices about printed products they purchase is one way we help our clients, such as the National Biodiesel Board, make informed decisions about their print projects," said Gary Lorenz, CEO of Lake Printing. "Being green is not just about recycling, it's about preserving our resources for generations to come, and Lake Printing is committed to providing paper choices that promote sustainability."
 
 The FSC is an independent, nonprofit organization formed to promote responsible management of the world's forests. The FSC chain of custody logo shows that every entity that has touched the final printed piece was certified and the paper was sourced responsibly. The FSC requirements include prohibiting conversion of forests or any other natural habitat, respecting international workers rights, prohibiting use of hazardous chemicals and management of areas in need of special protection.
 
 SFI is another independent nonprofit group. SFI practices sustainability in all of its program participant forests ensuring the long term health and sustainability of millions of acres of forests. SFI chain-of-custody certification extends into the marketplace by tracking fiber content from certified lands through production and manufacturing to the end product. Consumers who buy products with the SFI "percent-content" label know they are buying assurance of well-managed forests.
 
 Much like the BQ-9000 quality assurance program within the biodiesel industry, FSC and SFI both use third-party organizations to certify companies.
 

 "With FSC and SFI chain-of-custody certification and using soy inks, Lake Printing is helping our customers like the National Biodiesel Board demonstrate their own environmental commitment," said Steve Truitt, president of Lake Printing.

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NBB enhances office sustainability with new, green printer

Disneyland Resort in Anaheim, Calif., won the 2009 Governor's Environmental and Economic Leadership Award, California's highest and most prestigious environmental honor. The resort saves about 200,000 gallons of petroleum diesel per year in biodiesel used in the Disneyland Railroad's five steam boilers. The resort has been using soy-based biodiesel to fuel the steam engine boilers since April 2007. In January 2009 the resort began using biodiesel produced from its recycled cooking oil. 
 
 
 Renewable Energy Group Inc. recently purchased the 60 MMgy Nova Biofuels Seneca LLC biodiesel plant in Seneca, Ill., according to an 8-K filing submitted to the U.S. Securities and Exchange Commission. The SEC filing reads: "Pursuant to the Seneca Asset Purchase Agreement, the Seneca Purchaser (REG) agreed to acquire substantially all of the Seneca Sellers' assets, excluding certain specified assets, used in manufacturing ASTM D6751 quality biodiesel and related coproducts out of its production facilities in Seneca, Ill., including all patents and intellectual property rights to Nova's process technology, and to assume bank term debt of approximately $36.25 million." At press time, REG had no comment on the purchase. 
 
 
 Growth Design Corp. is planning to build a biodiesel plant in Forest City, Iowa, in which it intends to install two Mcgyan reactors, a newer conversion technology utilizing a permanent metal oxide catalyst in a cylindrical vessel measuring 6 inches in diameter by 6 feet long. The unique reactor and catalyst convert both triglycerides and free fatty acids into biodiesel in a single step. Growth Design applied for a USDA grant for assistance in funding the project, and anticipates breaking ground in late fall. 

 
 
 Innovation Fuels Inc. was recently recognized at the annual Syracuse, N.Y., Economic Champions award ceremony. Innovation moved its corporate headquarters from Albany, N.Y., to the Tech Garden in downtown Syracuse this summer. "We moved to Syracuse largely because it is in the hub of our upstream activities," CEO John Fox said. The company is supplying biodiesel locally, and working with researchers and extension agents at Cornell University along with several farmers throughout Upstate New York on the development of pennycress and camelina as new biodiesel feedstocks. Innovation Fuels operates a 40 MMgy multi-feedstock plant in the New York Harbor at Newark, N.J., and has terminal facilities in Milwaukee, Wis. 
 
 
 The Soley Biotechnology Institute is offering samples of algae oil on its Web site, and offering microalgae oil for sale for $0.418 per liter. The company described the source as heterotrophic microalgae grown in a pyramid photobioreactor. The fatty acid profile offered on the Web site indicates the oil is 51 percent palmitic, 39 percent oleic, 7 percent linoleic and 2 percent stearic. The Turkey-based Soley Institute has been working on microalgae since 2000. Among its projects has been algae production for nutritional supplements in partnership with the Intergovernmental Institution for the use of Micro-algae Spirulina Against Malnutrition. The Soley institute initiated a grant program in 2009 for algae research in developing countries. 
 
 
 Yellow Diesel BV announced its novel catalyst and integrated process design has successfully produced high quality biodiesel, and is now transitioning to pilot scale. A spin-off company of the University of Amsterdam's holding company, Yellow Diesel has developed a continuous fixed-bed process technology based on heterogeneous catalysis that produces biodiesel exceeding European specifications plus a cosmetic/food grade glycerol with minimal waste streams. The new multi-feedstock process saves up to 30 percent in operating costs of conventional systems and up to 40 percent on capital costs for new plants.
 

 
 Renewable Energy Group Inc., Ames, Iowa, has named Robert Dascal, previously of New Energy Fuels in Waller, Texas, as its new southern regional sales manager. His role includes developing partnerships with major refiners, distributors and regional jobbers as they prepare for implementation of the renewable fuels standard and other state blend requirements for biodiesel, REG said. 
 
 
 Often a let-down follows a record year, and that's true for America's two big agribusinesses, both with biodiesel plants in their portfolios. Cargill Inc. reported net earnings of $525 million in the fiscal 2010 first quarter ending Aug. 31, down 65 percent from the record $1.49 billion in the same period a year ago. For Archer Daniels Midland Co., net income fell to $496 million, or 77 cents per diluted share, compared to $1.05 billion, or $1.62 per diluted share, in the in the same quarter a year ago. 
 
 
 Florida-based PetroAlgae Inc. is collaborating with India's largest company to develop algae strains and technology to suit Indian conditions. PetroAlgae's subsidiary PA LLC recently signed a memorandum of understanding with Indian Oil Company Ltd. to build a pilot plant meant to demonstrate the commercial viability of the company's technology. "A commercial production facility with a capacity of 200,000 tons per year of biodiesel is proposed in the near future," IOCL said. The process will also produce a high-value protein for animal feed. 

 
 
 GreenHunter Energy Inc., Grapevine, Texas, has appointed Jonathan Hoopes as president and chief operating officer. Hoopes served in various capital markets, investment banking, and equity research roles at Goldman Sachs, Deutsche Bank, and UBS in London, Hong Kong and New York. Most recently, Hoopes served as managing director at Think Equity LLC where he led two teams of research analysts in the alternative energy and technology sectors.
 
 
 Dow Chemical Co. affirmed its commitment to the biodiesel industry in remarks by biodiesel sales manager Donna Rohan at the fall European Biofuels Expo and Conference. When it acquired rival Rohm and Haas earlier this year for $15 billion, Dow Chemical brought several biodiesel products under its roof. Amberlyst is a B20 solid catalyst esterification technology that offers biodiesel producers the flexibility to produce biodiesel from inexpensive low-quality feedstocks without sacrificing the quality of the end product, along with partner products Ambersep and Amberlite. The biodiesel products are sold under a differentiated business unit, Dow Water and Process Solutions, which offers a broad portfolio of ion exchange resins, reverse osmosis membranes, ultra filtration membranes and electro deionization products.
 
 
 The Air Force Academy is investigating algae as part of its Net Zero 2015 energy program. The Environmental Research Center in Colorado partnered with the Air Force Research Laboratory at Wright-Patterson Air Force Base, Ohio, and signed a cooperative research and development agreement with Cool Clean Technologies Inc. to develop processes for producing biofuels from algae oil. The ERC is also in talks with Brooklyn University's Juergen Polle to identify additional algae strains.

Dec. 09 BDM Business Briefs

Another bumper crop promises ample soybean supplies for all of the crop's myriad uses. In October, USDA was projecting a record 3.25 billion bushel production on 77 million planted acres, helping to settle fears that a late maturing soybean crop would be hurt by early frosts. Still, market jitters continued as farmers struggled to bring in the crop during breaks in fall rains amid reports of surprisingly good yields. "Iowa and Illinois's average temperature in July was about as cool as it has ever been," says Darrel Good, University of Illinois marketing specialist. "Cool summers are considered good for soybeans, but the question was-can it be too cool." Early concerns about disease affecting this year's yields were offset by positive factors, and Good says early reports of large seed sizes were contributing to the good yields. 

 
 While harvest rains kept pressure on the markets, at the same time reports emerged that the South American soybean crop being planted could be a big one as the region recovers from its worst drought in decades. "If the South American crop lives up to early forecasts, Brazil and Argentina are expanding soybean areas," Good reports. When the South American harvest approaches, he expects Chinese buying of American soy to slow down in anticipation. In a reversal of the typical market lows occurring during harvest, Good suggests this year prices may be at their marketing season (Sept. 1 to Aug. 31) high during harvest time, dropping as the South American harvest approaches. In its October report, USDA projected season average prices for soybeans in a range of $8 to $10 per bushel and soybean meal at $245 to $305 per ton. The soybean oil price range for 2009-'10 is projected to average between 32 to 36 cents per pound. 
 
 Bumper crops used to send corn and soybean prices into the basement, but the growth in biofuels demand for the two biggest crops in U.S. agriculture has used up the surplus and kept carryover volumes modest, even with the large crops of recent years. In turn, corn and soybeans prices now follow trends in crude oil prices. The rebound in the energy market the past few months is one of the factors supporting soy prices, Good says. Soy oil used for methyl esters dropped to 1.85 billion pounds last year, almost half that of the 3.2 billion pounds used for methyl esters in the 2007-'08 marketing year. USDA is projecting soy oil use in biodiesel will climb back to 2.1 billion pounds in the current marketing year. Biodiesel use at about 10 percent of the total soy oil supply is not as great as ethanol's share of one-third of the U.S. corn crop, but soy utilization for methyl esters is high enough where changes in biodiesel demand for the crop has an impact. "A 300 to 500 million pound swing makes a difference in the market," Good says. Ethanol's impact on the corn market affects soybeans too, since the two crops vie for acreage each spring, keeping their relative values in balance.
 
 As the biodiesel market has grown in its market share, traders are seeing the impact. Brian Engel, vice president of trading with Omaha, Neb.-based Tenaska Biofuels, says he now sees soy oil markets pricing themselves in and out of biodiesel. As soon as the price drops a bit, biodiesel use goes up, but only briefly, until the market boosts it back up beyond biodiesel profitability. Engel says that range amounts to about 5 cents per pound, which translates to a 35 cent to 40 cent per gallon range. With diesel markets staying fairly strong, Engel says this fall "we needed to see 32 cent to 33 cent soy oil to move any significant volumes of soybeans." Whenever prices move above that, he says, only the base demand to cover mandated uses and state incentives can afford to be in the market. In August through the first half of October, soy oil prices dropped into the low 30s, with cash prices in some locations dipping to just under 30 cents a pound, he notes. "Soy oil got priced in and we saw pretty good volumes of biodiesel sales through December," Engel says, adding that this kind of pricing shift tends to play out in sales on a quarterly basis. Seasonal trends are also clearly in place, with animal fats and waste oil demand dropping as cold weather approaches and interest in soy oil and even premium canola oil going up for biodiesel. Even palm oil, which often used to trade at a discount to soybean oil, is seeing the impact of new biodiesel capacity in the two major producing nations, Indonesia and Malaysia. Whenever prices begin to drop, biodiesel production begins utilizing more until the prices move back up. What's happening in palm oil prices, in turn, impacts the oleochemical market (soaps and detergents), which is a major use for U.S. animal fats, along with energy for feed rations and biodiesel. 
 
 
 Seeking Alternatives
 
 The complex relationship among the major feedstock sources for biodiesel is keeping global markets strong, but in the face of growing global demand for edible oils from increasing populations with improved diets, there is increased pressure to find nonfood alternatives. Algae's potential for supplying large volumes of biofuel feedstocks is tantalizing, but still in the future. Reports of jatropha biodiesel production in Africa and Asia are beginning to emerge, and will possibly begin to reach significant volumes in the next year or two. 
 
 In the U.S., the crop most likely to become a significant new feedstock in the next few years is camelina. After a dip in farmer interest when the wheat market was exceptionally strong, camelina acres continue to grow, and could possibly top 100,000 planted acres this year in Montana and surrounding states and provinces. The crop is also being widely tested across the U.S. and Canada and in a number of other countries. 
 
 The major attraction for camelina is its sustainability quotient. An oilseed in the brassica family, camelina gives impressive yields on modest rainfalls with the potential to be added into crop rotations without displacing other crops. One test plot in the Pacific Northwest yielded 2,700 pounds of seed on 20 inches of rainfall, reports Sam Huttenbauer, CEO of Great Plains-the Camelina Co. However, the average yield across the arid regions where it is currently grown is roughly half that. Field trials being conducted in upstate New York and Wisconsin are seeing yields range between 1,000 pounds per acre and 1,400 pounds per acre, according to Innovation Fuels Inc. CEO John Fox. In Montana, where the crop development originated, crop breeders expect that yields of 2,000 pounds per acre will be attainable as varieties improve and agronomic practices are refined.
 

 Other important factors for camelina's expansion are falling into place. Camelina meal has been approved for use in broiler rations and at press time, Huttenbauer reported the approval process for use in egg-layer rations was close. A herbicide for weed control is available and the crop can now be covered by crop insurance. Next on the list for Great Plains is the development of varieties that can tolerate a common herbicide used in the Pacific Northwest. Herbicide carryover in the soil has made it difficult to rotate sensitive broadleaf crops like camelina with the dominant wheat crop. Great Plains and Sustainable Oils Inc., the two main companies promoting the crop for biodiesel production, are both making progress in contracting acres and developing new markets, including the aviation market for bio-based jet fuels.
 
 
 Pennycress
 
 Another promising new crop is gaining ground. Pennycress, like camelina, promises yields in the 2,000 pound per acre range, high oil content and the ability to fit into rotations without displacing existing food crops. In Illinois, Peter Johnson, chief technology officer for Biofuels Manufacturers of Illinois LLC, reports its Pennycress Partners outreach to farmers has gained important support in the leadership of Illinois Soybean Association past president, Brad Glenn. Hopes for more than 2,000 acres to be seeded this fall were dampened by the late corn harvest, since the most common rotation is to seed pennycress in the fall following corn to be harvested in the spring before planting soybeans. Johnson estimated about half that would be planted, some of it into wheat ground. BMI is still awaiting financing on a proposed biodiesel plant in Peoria County, Ill. "We're making progress on a state loan guarantee, and we've got bankers watching that progress and equity investors watching both [state and bank support for the project]," Johnson says.
 
 One downside for pennycress is finding a use for the meal, which is not suitable for feed. BMI is working with USDA researchers to develop a pyrolysis-based process to convert pennycress wet cake after oil extraction into bio-oil and biochar. A ton of pennycress seed will yield 95 gallons of oil for use in the biodiesel process plus 95 gallons of bio-oil from wet cake, Johnson says. 
 
 Further east, biodiesel producer Innovation Fuels is also working to develop pennycress. CEO John Fox reports they have close to 1,000 acres of field trials in five regions of upstate New York, as well as three regions in Wisconsin. "We're hitting yields of 1,000 to 1,500 pounds per acre of seed," he says. The company expects to be processing a significant amount of pennycress oil in its Newark, N.J., biodiesel plant in 2010. The company recently relocated its corporate headquarters to Syracuse, N.Y., to facilitate its work with Cornell University in developing the crop. The partners are also working on higher value uses for the meal. 
 
 
 Tree Oils
 
 While jatropha is the oil-bearing tree crop most often discussed, other tree crops are being evaluated. One American company, Biofuels Africa, is focusing its attention on the croton tree, a large forest canopy tree producing an oilseed traditionally used for heating and lighting. Plantings in Tanzania are expected to begin bearing in 2010 and the company recently held discussions in Kenya about the potential for using the croton tree for erosion control along with oil production. Christine Adamow, Biofuels Africa director, says they expect to have their first harvest of about 10 tons of oil next year, with production ramping up in subsequent years. Projections call for 200 trees per acre to yield between 70 to 110 pounds each. With 30 percent oil content in the seeds, croton plantations could yield between 5,000 and 7,000 pounds of oil per acre annually. "Our goal is to take the oil and modify it in the least environmentally demanding process possible," she adds. "We'll not be using transesterification." 

 
 In the U.S., work on the tallow tree continues in Louisiana. Gary Breitenbeck, a researcher in the Louisiana State University's AgCenter School of Plant, Environmental and Soil Sciences, believes the tallow tree will fill a valuable niche in the South being able to grow on wet, salt-impacted, infertile soils unsuitable for row crops. "We have pretty compelling evidence that from mature trees we can get 1,000 gallons of oil per acre at less cost than soy oil," he says. Within a year, he believes his team will have developed a micro propagation technique to clone high-yielding trees. The team is also finishing a study on oil composition and has developed a process to separate the waxy and kernel oils found in the seeds. Three partners have emerged to back his research. Hal Wrigley with Ecogy Biofuels LLC in Estill, S.C., Jeff Hassannia with Diversified Energy Corp. and Louisiana consultant Scott Nesbit have formed CTT Bioenergy LLC to commercialize the tallow tree. 
 
 For any of these promising alternative feedstocks to have a real impact on biodiesel margins, they will have to produce oils at a cost below the traditional feedstocks and do so in sufficient volumes. Even if camelina tops 100,000 acres this coming year, it would barely supply a good-sized biodiesel plant. One 25 MMgy biodiesel producer figures it needs soybeans from 1,700 acres per day to keep its plant going at full capacity. It will take time before new alternatives will take the pressure off the current biodiesel feedstocks.
 
 Susanne Retka Schill is assistant editor of Biodiesel Magazine. Reach her at (701) 738-4922 or <a href="mailto:sretkaschill@bbiinternational.com">sretkaschill@bbiinternational.com</a>.

SOURCE: Darrel Good, University of Illinois

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Louisiana researchers continue to make progress in developing tallow tree oil as a biodiesel feedstock. SOURCE: Gary Breitenbeck, LSU

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Soybean growers once again brought in a big harvest to provide ample biodiesel feedstock supplies. Market trends, however, keep on the pressure to diversify into new sources of fats, oils and 
greases. Biodiesel Magazine takes a look at the feedstock outlook.

Expanding the  Feedstock  Portfolio

Posted November 24, 2009
 
 Agriculture officials in Minnesota and South Dakota are applauding a decision by a petroleum distribution company to increase the availability of winter biodiesel in their states. Minnesota Agriculture Commissioner Gene Hugoson and South Dakota Agriculture Secretary Bill Even say the decision of Magellan Midstream Partners, L.P., to install winter biodiesel blending equipment at their Sioux Falls terminal is a win-win situation for farmers and biodiesel consumers in both states.
 
 Commissioner Hugoson says the Minnesota Biodiesel Task Force has been working to find a company that would be willing to install biodiesel blending equipment at a major fueling terminal to serve southwestern Minnesota. 
 

 "Magellan has been a good partner for the state of Minnesota as we developed our biofuels programs," said Hugoson. "Magellan has supported the biodiesel industry since its infancy and they have been instrumental in ensuring the safe and effective blending of ethanol and biodiesel."
 
 South Dakota Agriculture Secretary Even says the facility will allow diesel consumers to gain better year-round access to quality biodiesel blends. "This decision will have positive implications for smoother distribution of biodiesel blends in South Dakota, Minnesota and surrounding states," Even said. "This facility is another step toward reducing our dependency on foreign oil."
 
 Magellan's COO, Mike Mears said "our multi-million dollar investment in biodiesel infrastructure at the Sioux Falls terminal comes at a time when our customers are looking for state-of-the-art systems that accurately, efficiently and safely blend biodiesel into diesel fuel."
 
 No state funds were used for the project. Magellan officials say installation of the new equipment at the Sioux Falls terminal is expected to be completed in 2010 with winter biodiesel blends available by next fall. 
 
 SOURCE: MINNESOTA DEPARTMENT OF AGRICULTURE

Facility in Sioux Falls, S.D., will serve southwestern Minnesota customers

Consumers to find more availability of biodiesel blends

Posted November 25, 2009 
 
 France's Normalab Analis company is currently working "to enhance the ASTM D2068 device to integrate a cold soak filter blocking tendency coefficient" for various types of petrochemical products, including biodiesel, Nicolas Barbay, research and development engineer for Normalab, told Biodiesel Magazine. "We are designing this new machine that is quite new in the petrochemical industry," he said. 
 
 D2068 "is a test method intended for use in evaluating distillate fuel cleanliness in those applications that demand a high throughput per installed filter," ASTM said. "Causes of poor filterability might include fuel degradation products, contaminants picked up during storage or transfer, or interaction of the fuel with the filter media."

 
 Normalab currently markets an automatic portable testing machine that generates a printed flow curve that correlates to the FBT characteristics of the fuel being tested. "We are also designing new webbing programs for filters," Barbay said, adding that new filters-as well as testing methods and fuel production practices-will be very important to alleviate future plugging problems. 
 
 Normalab, headquartered in Lintot, France, says that with more than 10 test methods available, Normalab provides the widest offering of testing equipment to evaluate the physical properties of biodiesel.
 
 For more information on the company's testing equipment and procedures visit <a href="http://www.normalab.com">Normalab's Web site</a>.

Normalab updating FBT device to include cold soak

Posted November 25, 2009
 
 Evolution Fuels will host country music singers Willie Nelson and Family at the Willie's Place at Carl's Corner Truck Stop in Carl's Corner, Texas, on Dec. 16., to help promote a plan to develop a chain of renewable fuel stations that extend from Texas to Mississippi. Willie's Place at Carl's Corner, which opened December 2008, is partially owned by Evolution Fuels' subsidiary Legend's Travel Centers LLC and has "steadily increased sales of biodiesel blended fuels since that time," the company said. 
 
 Evolution Fuels, formerly Earth Biofuels, published its third quarter financial results on Nov. 24. Highlights included net income of $468,000, compared to a net loss of $10.7 million in the same period last year. It decreased selling, general and administrative expenses by nearly 67 percent, maintained cash and cash equivalents of $154,000, and a $2 million gain on the exchange for Evolution Fuels convertible notes for 200,000 shares of PNG stock.

Willie Nelson and Family to perform at Carl's Corner

Posted November 30, 2009

 
 The National Biodiesel Board has sent a letter to the U.S. EPA reiterating the critical importance of implementing renewable targets for Biomass-based Diesel. 
 
 The Energy Independence and Security Act (EISA) of 2007 expanded the Renewable Fuels Standard (RFS2) and for the first time provided a specific requirement for renewable, low carbon diesel replacement fuel. RFS2 requires the use of 500 million gallons of Biomass-based Diesel in 2009; 650 million gallons in 2010; 800 million gallons in 2011; and 1 billion gallons in 2012. However, the Biomass-based Diesel volumes required by law have not been implemented due to delays in the RFS2 rulemaking process. Biodiesel is currently the only fuel produced domestically in commercial scale quantities that meets the definition of Biomass-based Diesel. 
 
 "We are rapidly approaching the end of 2009, a year beyond the statutory deadline for RFS2 implementation," noted Manning Feraci, NBB's Vice President of Federal Affairs. "The U.S. biodiesel industry has made vital business decisions based on the RFS2 renewable targets, and the nation's ability to meet these modest renewable goals will be undermined if the EPA does not take immediate steps to implement the Biomass-based Diesel Program." 
 
 In the letter to EPA Administrator Lisa Jackson, the NBB specifically explains the need for the EPA to use its existing authority to implement the 2009 and 2010 Biomass-based Diesel volumes as required by RFS2 no later than January 1, 2010. The letter further explains that the EPA can fulfill its non-discretionary duty to implement the Biomass-based Diesel program under the current RFS program by issuing an appropriate renewable volume obligation specifically for biodiesel.
 
 "Further delay implementing the RFS2 volume requirements will prolong the severe economic hardship facing the domestic biodiesel industry, and we hope the EPA will take the common-sense steps called for in this letter," concluded Feraci.
 
 The NBB is the national trade association of the biodiesel industry and is the coordinating body for biodiesel research and development in the U.S. NBB's membership is comprised of state, national, and international feedstock and feedstock processor organizations, biodiesel suppliers, fuel marketers and distributors, and technology providers. 
 
 SOURCE: NBB

NBB calls on EPA to implement RFS2 biodiesel targets

Posted December 1, 2009
 

 Yara North America Inc., a leading North American producer and distributor of Diesel Exhaust Fluid (DEF), signed Colonial Chemical Co., one of the nation's most experienced DEF experts, as agent of its registered Air1 brand. Together Yara and Colonial Chemical will work to sell Air1 and support Mansfield Oil Company and their DeliveryONE network of nationwide distributors to economically and efficiently sell and distribute Air1, the world's number one brand of DEF, to all segments of the North American market. 
 
 "Colonial Chemical Company is excited to team up with Yara to further develop and penetrate the DEF market across North America. We chose Yara and its Air1 brand because of the strength of its domestic production, its distribution approach through Mansfield's DeliveryONE, and its strong network of bulk haulers. To be part of the Air1 brand with its global recognition and scale guarantees supply and reliability. The power of their concept along with Colonial's expertise in handling, packaging and providing education to the market made our two teams the perfect fit," said Jim Spooner, Vice President and General Manager of Colonial Chemical. 
 
 "With this deal, Yara has added a tremendous amount of knowledge, experience and front line sales for its Air1 brand development. This type of arrangement is going to help the North American market be prepared for the demand as we close in on January 1, 2010. I am extremely pleased to welcome the Colonial Chemical group as part of the Air1 team," said Chad Dombroski, Yara's Director of Air1. 
 
 New truck engine manufactures will comply with the new emission standards impose by the EPA that will come into effect on January 1st 2010. Under the new regulations, most engine manufacturers have chosen the Selective Catalyst Reduction (SCR) system as the most efficient way to meet these standards. DEF the operating fluid for SCR is a non-toxic solution that transforms harmful NOx emissions from heavy-duty diesel-powered vehicles into harmless water vapour and nitrogen. According to engine manufacturers, SCR combined with DEF improves overall fuel economy by approximately 5 percent compared to competing technologies, and achieves Nitrogen Oxide (NOx) reductions in excess of 90 percent. Air1 is guaranteed to meet ISO 22241 guidelines and is Certified by the American Petroleum Institute (API). 
 
 About Yara International 
 Yara International ASA is the world's leading chemical company that converts energy, natural minerals and nitrogen from the air into essential products for farmers and industrial customers. As the number one global supplier of mineral fertilizers, Yara helps provide food for a growing world population. Its industrial products portfolio includes environmental protection agents such as Air1 Diesel Exhaust Fluid (DEF) that prevent air pollution. Yara's Sluiskil plant in the Netherlands is the single biggest DEF production site in the world. The Air1 brand for DEF has a strong market position in Europe and Australia. Yara's global workforce of 8000 employees represents the great diversity and knowledge that enables Yara to remain a leading performer in the industry. 
 
 For more information about Air1, please visit <a href="http://www.air1def.com">www.air1def.com </a>
 
 About Colonial Chemical Company 
 Colonial Chemical Company, headquartered in Tabernacle, NJ, is a leading distributor of urea based SCR reagents for stationary diesel generators and coal fired power plants in addition to its position in the DEF market. Colonial Chemical is broad-based chemical producer and distributor offering lines of battery electrolytes, in-ground environmental remediation chemicals, ice melting compounds and has a full-range custom blending, and packaging capabilities as well as its urea activities. Colonial also has a national distribution business, Colonial Specialty Chemicals, which offers Specialty Chemical additives for the metal working, lubricants and bio-fuels markets. 

 
 For more information about Colonial Chemical Company, please visit <a href="http://www.colonial-chemical.com">www.colonial-chemical.com</a>
 
 Yara North America Inc. 
 Chad Dombroski 
 Office: 813-222-5746 
 
 Colonial Chemical Company 
 Jim Spooner 
 Office: 609-268-1200 
 
 SOURCE: YARA NORTH AMERICA INC.

The world's largest Diesel Exhaust Fluid (DEF) producer and one of USA's most experienced DEF experts combine forces to focus on fleet emissions in advance of EPA mandate

Yara and Colonial Chemicals partner to help fleets comply with Clean Air Act 2010 standards

Posted December 1, 2009
 

 Biodiesel usage has grown exponentially in the last several years, due to a combination of financial incentives, dynamics in petroleum markets, and the institution of state and local mandates. Stories of both overwhelming success and endless frustration abound, leaving policymakers and consumers looking for additional insights and perspective. On December 15, the Diesel Technology Forum (DTF) will host a webinar that will take a look at biodiesel availability, quality and impact on vehicle performance in order to help fleet managers and policymakers make informed decisions about the risks and benefits of expanded biodiesel use. Subsequent webinars in early 2010 will provide a more in-depth look at vehicle performance issues and considerations for developing mandates and other biodiesel policies.
 
 Speakers will address topics including:
 
 &bull; Industry Status: Biodiesel Availability, Volume, Regulation and Quality - Robert McCormick, National Renewable Energy Laboratory 
 &bull; Keep on Truckin': Experience with B20 – The Two Million Mile Haul - Hind Abi-Akar, Caterpillar 
 &bull; Bringing Biodiesel to the Masses: Using Biodiesel in Today's New Clean Diesel Cars and SUVs - Walter Puetz, Daimler 
 &bull; Making it All Happen: A Fuel Provider's Perspective – The challenges of making fuel available, maintaining quality and the impact of state/local biodiesel mandates. - BP representative TBD 
 
 When: Tuesday, December 15, 2009, 11:00am -12:30pm ET 
 
 Register at <a href="http://www.dieselforum.org/webinars">www.dieselforum.org/webinars</a>. 
 
 There is no charge to participate but space is limited. The webinar will be recorded and posted on the DTF website for any that are not able to attend the live session.
 

 ABOUT THE DIESEL TECHNOLOGY FORUM
 The Diesel Technology Forum is a non-profit national organization dedicated to raising awareness about the importance of diesel engines, fuel and technology, and working with policymakers and other stakeholders on common solutions. Forum members are leaders in clean diesel technology and represent the three key elements of the modern clean-diesel system: advanced engines, vehicles and equipment, cleaner diesel fuel and emissions-control systems.

Using Biodiesel: Good in Theory. Good in Practice? Looking Beyond the Policy and Politics

Upcoming DTF Webinar to examine pros and cons of biodiesel

Posted December 8, 2009

 
 Poland Springs Bottling of Maine began the greening of its fleet by using B5 in 2007. The company was recently recognized by the Environmental Defense Fund for its performance in curbing carbon emissions. EDF recognized Poland Spring for drastically reducing truck idling time, publishing a case study that showed a 70 percent drop in idling time for an annual reduction of 77 tons of carbon dioxide. Cutting idling time saved the company roughly $20,000 in 2008 in reduced fuel costs. 
 
 The reduced idling efforts came on top of even larger savings in carbon emissions and fuel costs from switching to B5 in March, 2007, according to Poland Spring's fleet manager Chris McKenna. "It was nice to get the recognition from the Environmental Defense Fund." Poland Springs estimated using B5 displaced enough diesel fuel over two years to reduce its carbon emissions by 1.8 million tons. B5 also improved the fuel economy in the fleet's 36 tractor-trailers. McKenna said an analysis done by the National Biodiesel Board in a case study on Poland Spring's experience found the fleet's overall fuel economy increased 0.1 miles per gallon in 17 months of using the blend compared to the previous 17 month performance. The gain was attributed to the improved lubricity of biodiesel blends compared to ultra low sulfur diesel fuel. 
 
 "When we had our two year anniversary [of using biodiesel] we figured we used 100,000 gallons of biodiesel, displacing 100,000 gallons of diesel. Over those two years, we had a $70,000 savings in fuel cost," McKenna said. That figure doesn't include an estimate of the savings from improved fuel efficiency, he added. When they started, the state of Maine had a 6 cent per gallon tax credit for using biofuels, which has since expired. "A lot of companies dropped [biofuels] then," he said, "We hung in there. And for 12 to 18 months straight we've seen a price difference of 6 cents to 12 cents less for B5 than ULSD." McKenna said the company's fuel supplier provides them with the average fuel cost each month, along with a comparison of what the average would have been with straight ULSD. 
 
 McKenna added that the company may have changed a few extra fuel filters at the beginning, but has had no operational problems with gelling in Maine winters or with other performance measures. The company initially tried the biodiesel blend with two yard trucks, and when McKenna moved up from warehouse manager to fleet manager, he supervised the transition to B5 for the entire fleet. One of the first issues was finding a supplier. Sprague Energy of South Portland, Maine, is the wholesaler, using inline blending for consistent blending. Finding a retailer to handle the B5 was another issue, since Poland Springs cannot have fuel on sites where it picks up its water supplies. "We talked to a couple of Maine's larger retailers, but they weren't interested," he said. "We found one local retailer who was." CN Brown converted the sole diesel pump at two stations to handle B5 in order to supply Poland Springs. "They were wondering if they'd lose business," he added, "and they didn't." 
 
 McKenna freely talks to others about Poland Spring's experience and reports that the biggest growth in biodiesel use is among municipalities. Representatives from Poland Springs, Sprague and CN Brown have formed a panel speaking at a number of events to give the supplier/retailer/end user experience. Poland Springs also lets people know its trucks run on biodiesel through its signage. "Our trucks are rolling through small towns, and as the biggest end use of biodiesel in the state, it gets the message out," McKenna said. 
 
 The Environmental Defense Fund case study is available at <a href="http://www.edf.org/greenfleet">www.edf.org/greenfleet</a>. EDF provides a number of tools and links for corporations interested in lowering costs and greening their fleets.

EDF recognizes Poland Spring's carbon reduction

Posted December 1, 2009
 
 Biofuels mandates are "around the corner" in New Jersey, said Norman Woolley Jr., of the state's Woolley Fuels Co., which recently increased its biodiesel blending capabilities from 5 percent to 30 percent. 
 
 "We're trying to stay ahead of the curve and were the first to put in a biodiesel pump in New Jersey," Woolley said. "It's very hard to get a blended product here, so we installed the blending facilities and buy B100 from producers." The cost of installing the pump was about $25,000, but Woolley fuels has seen increased demand month over month since offering methyl esters. But the fuel is hard to source because the development of the biodiesel industry has been slow in the state.
 
 Drivers can select what blend of biodiesel they want to fill with right at the pump. Wooley then programs the desired level via remote control to customize the fill. "Drivers are certainly finding the pump," Woolley said. "It's been a while since we've seen increased demand, but we are selling more and more biodiesel."
 
 The company has been buying soy biodiesel from Sprague Energy, a Pennsylvania-based biodiesel producer, and it usually has to wait about two weeks before receiving a load to fill its 2,000-gallon tank. "We were advised to start with soy biodiesel because it is considered to be high quality," Woolley said. "But there are very few companies in this area that we can get biodiesel from."
 
 The company has plans to add 12,000 gallons of storage capacity this coming summer in order to prepare for increased demand for bioheat-the heating oil market is Woolley's biggest sales sector. Biodiesel blends from B2 to B5 are currently priced at a discount to conventional diesel of about 10 cents-per-gallon, while higher level blends in the B20 to B30 range are about 12 cents-per-gallon more than conventional diesel, Woolley said.

New Jersey's Woolley Fuels increases biodiesel blend levels

Posted December 1, 2009
 

 Canadian support for biofuels is quite strong according to a study released at the opening of the Canadian Renewable Fuels Summit held Dec. 1 and 2 in Vancouver, British Columbia. Ontario-based Praxicus Public Strategies Inc. conducted a survey from Oct. 30 to Nov. 3 for the Canadian Renewable Fuels Association.
 
 "The poll clearly shows that Canadians want to shift from fossil fuels towards alternatives. Eighty-four percent of Canadians support the promotion of low-carbon, homegrown renewable fuels as a major part of that change," Praxicus president Dimitri Pantazopoulos said. "This support for renewable fuels is consistently strong in every region of the country. Canadians want our energy supply to grow beyond oil."
 
 Other questions found strong support for the Canadian renewable fuels industry. The survey results have a margin of error of about 3 percent. Among the findings: 
 
 <ul>
 &bull; 81 percent of Canadians expressed support for the development of a strategy to encourage the development of renewable fuel technology and production.
 
 &bull; 74 percent of Canadians support the current national requirement that gasoline consist of five per cent ethanol by 2010 and all diesel consist of two percent biodiesel by 2011. This is an eight percent increase in support for the Renewable Fuel Standard since support was measured in April 2008. At that point, 66 percent of Canadians supported the national requirement.
 
 &bull; The intensity of support for renewable fuels is growing. The number of Canadians who strongly support the national requirement is 42 percent, up 16 percent over the 2008 findings. </ul>
 
 
 "Canadians are clearly embracing the move to ethanol and biodiesel," Pantazopoulos said. "It is clear, from tracking these results over several years, the more Canadians learn about renewable fuels, such as ethanol and biodiesel, the more they like what they see."

 
 "These are numbers any politician would die for," commented CRFA President Gordon Quaiattini in his remarks at the summit. "The fact that this many people believe renewable fuels are the way to go sends an unmistakable signal to the marketplace, to farm families and to policymakers."

Canadian support for biofuels tops 80 percent

Posted December 2, 2009
 
 Nothing's definite. That's what biodiesel businessmen are saying about U.S. President Barack Obama and his commitment to the proliferation of the fuel. Looming-and that's the only word for these situations-are the expiration of the federal excise tax credit for biodiesel and implementation of RFS2, and policy decisions certainly are at the forefront of biodiesel brains as 2009 comes to an end.
 
 "If we don't get the incentive, we won't be in business," said J. Allan French of Chesapeake Custom Chemical, a 5 MMgy facility in Ridgeway, Va. Sen. Charles Grassley (R-Iowa) introduced the Biodiesel Tax Incentive Reform and Extension Act last summer, but the issue keeps being pushed back and could be lumped in a package deal with other "more controversial" tax legislation, Grassley said in a Nov. 25 release, adding that biodiesel incentives should be kept separate from others.
 
 "Grassley's bill could get us back on our feet again, but right now I have zero faith in Congress and about half that much in our President. In every speech he gives, he says something about biodiesel-and what does he do for us-nothing," French said. 
 
 In addition, some say that implementation of RFS2-mandating the use of 1 billion gallons per year by 2012-may cause as many difficulties benefits. Particularly, greenhouse gas, renewable identification number credits, and feedstock origin reporting could cause "a lot of paperwork," a Georgia producer told Biodiesel Magazine. "It could add a lot of layers to what we already have to deal with."
 
 There hasn't been a lot of movement on the positive in terms of administerial decisions, said Miamisburg, Ohio's Jatrodiesel CEO, Raj Mosali. "Even though a lot was said, most of the funding under the American Recovery and Reinvestment Act has gone to research," he said. "There's been virtually no support for existing producers to make improvements to actual fuel processes."
 

 The big picture items like the excise tax credit and RFS2 have "nothing going on," Mosali added. "This has been particularly hard as an equipment provider because nobody wants to do anything until they know what's going to happen-they're waiting for the end of the year."

Biodiesel producers respond to Obama's first year

Posted December 1, 2009
 
 The driver for biofuels usage is not limited to the United States and Europe, but is also growing in the Asia-Pacific and Latin American regions, according to Tammy Klein, executive director of global biofuels services for Hart Energy Consulting. She spoke about the global biofuels outlook on the opening day of the Canadian Renewable Fuels Summit held Dec. 1 and 2 at Vancouver, British Columbia.
 
 Thirty countries are implementing biofuels targets in 2010 alone, she said, with many of these countries in the developing world encouraging biofuels as a means of building energy security and improving their rural economies. Biodiesel demand is expected to double between 2009 and 2015, while supply is expected to grow threefold. "Currently there is massive overcapacity on a global basis in the biodiesel industry and utilization rates are generally below 50 percent," she added. Current global biodiesel capacity is already large enough to supply the demand projected for 2015 of 10 billion gallons per year. 
 
 Currently, 30 countries worldwide are blending biodiesel, with the typical B5 beginning to inch upward. Several countries in Europe are moving towards B7, with Brazil moving towards higher blends and Indonesia considering B10. In 2009, developing countries represented 17 percent of biodiesel demand and almost 50 percent of global supply. That is expected to grow to 42.6 percent of biodiesel demand and 59.2 percent of global supply by 2015. Much of that demand among developing countries will be for domestic use, she added. African nations are looking towards biofuels for job creation, economic development and domestic energy supply and are not likely to become international players. In the Asia-Pacific region, the big four-Indonesia, Malaysia, China and the Philippines-represent 74 percent of biodiesel demand in the region. Brazil is likely to produce biodiesel to satisfy its internal markets and continue to raise blending limits to absorb capacity. 
 
 Europe is expected to see the greatest penetration of biodiesel into the diesel market by 2015, although the pending implementation of sustainability standards for its Renewable Energy Directives is raising questions. "We don't know how Europe will meet its RED requirements," Klein said. With U.S. imports restricted by countervailing duties and the Brazilians using their biodiesel internally, it may leave Argentina and the Asia-Pacific producers to supply Europe, driving an expansion of the Asia-Pacific industry in particular. Europe will remain the largest consumer of biodiesel at about 44 percent of world consumption, but Asia-Pacific will come close with a 39 percent share by 2015, she projected. 
 
 Klein urged the group of Canadian Renewable Fuels Association members to be proactive about involvement in policy development and the work being done on sustainability standards, not only in dialoguing with nongovernmental organizations but also engaging with governments and organizations like the Roundtable for Sustainable Biofuels. "The complaint from the RSB is they don't have enough industry participation, and not enough producer involvement," she said. 
 
 She also predicted that the anticipated EU sustainability standards for biofuels will be challenged in the World Trade Organization as a protectionist trade barrier. At a recent international meeting, she reported, "the change in tenor was astonishing" from the EC representative who openly admitted they would have to consider WTO implications in the development of the RED. "Brazil is watching the EC closely," she said. "And Brazil has a history of winning WTO cases." If a WTO suit successfully challenges Europe's sustainable biofuels policy, it could also impact U.S. policy as well, she added.

Global biodiesel demand to double in 5 years

Posted December 2, 2009

 
 Envirotek's current production facility, Extreme Biodiesel in Corona, Calif., is expanding its capacity from 2 MMgy to 6 MMgy, the company recently announced. "When complete, the Corona facility is expected to operate six days per week with an approximate output of almost 500,000 gallons per month of biodiesel fuel," Envirotek stated. "Based on current market pricing, the annual revenues, along with the government subsidy program, would equate to be in excess of $15 million annually."
 
 Extreme Biodiesel also manufactures "mini extractors," a small business/home mini refinery system, at the Corona facility. These units are designed for small business owners and individuals to produce (non-resale) biodiesel at their own locations. "Last year, the company manufactured, sold and shipped almost $1,000,000 of these units," Envirotek said. "Production is being increased for 2010 with a projected sales target of $2,000,000 for the "mini extractors."

Envirotek expands California plant

Posted December 7, 2009
 
 Several biomass-based diesel projects are among the 19 advanced biorefinery projects receiving up to $564 million from the American Recovery and Reinvestment Act to accelerate the construction of pilot, demonstration and commercial scale facilities producing advanced biofuels, biopower and bioproducts using biomass feedstocks. The announcement was made Dec. 4 by U.S. DOE Secretary Steven Chu and USDA Secretary Tom Vilsack. 
 
 "Advanced biofuels are critical to building a cleaner, more sustainable transportation system in the U.S." Chu said. "These projects will help establish a domestic industry that will create jobs here at home and open new markets across rural America."
 
 Of the nearly $564 million in Recovery Act funding, up to $483 million will go to 14 pilot-scale and four demonstration-scale biorefinery projects across the country. The remaining $81 million will focus on accelerating the construction of a biorefinery project previously awarded funding. Collectively, these projects will be matched with more than $700 million in private and non-Federal cost-share funds, for total project investments of almost $1.3 billion.
 
 Joining Chu in making the announcement, Agriculture Secretary Vilsack noted that USDA Rural Development has selected San Diego, California based Sapphire Energy to receive a loan guarantee for up to $54.5 million through the Biorefinery Assistance Program to demonstrate an integrated algal biorefinery process that will cultivate algae in ponds, and will use dewatering and oil extraction technology to produce an intermediate that will then be processed into drop-in green fuels such as jet fuel and diesel. The actual project will be constructed in Columbus, N.M. "The development of renewable energy is a critical component of our efforts to rebuild and revitalize rural America," Vilsack said. "This Farm Bill program is instrumental in increasing our energy independence and expanding new technologies and markets for agricultural and environmental waste material." 
 
 The Biorefinery Assistance Program, authorized through the 2008 Farm Bill, promotes the development of new and emerging technologies for the production of fuels that are produced from non-corn kernel starch biomass sources. The program provides loan guarantees to develop, construct and retrofit viable commercial-scale biorefineries producing advanced biofuels. The maximum loan guarantee is $250 million per project. The loan guarantee will be subject to the availability of funds and contingent upon Sapphire Energy meeting the conditions of the loan agreement. 
 

 Other projects involving biomass-based diesel include:
 
 -	Amyris Biotechnologies Inc., Emeryville, Cal., receiving $25 million for a project producing a diesel substitute through the fermentation of sweet sorghum. The pilot plant will also have the capacity to coproduce lubricants, polymers and other petro-chemical substitutes.
 
 -	Clearfuels Technology Inc., Commerce City, Colo., $23 million for a project to produce renewable diesel and jet fuel from woody biomass by integrating ClearFuels' and Rentech's conversion technologies. The facility will also evaluate the conversion of bagasse and biomass mixtures to fuels.
 
 -	Elevance Renewable Sciences, Newton, Iowa, $2.5 million to complete preliminary engineering design for a future facility producing jet fuel, renewable diesel substitutes and high-value chemicals from plant oils and poultry fat.
 
 -	Gas Technology Institute, Des Plaines, Ill., $2.5 million to complete preliminary engineering design for a novel process to produce green gasoline and diesel from woody biomass, agricultural residues and algae.
 
 -	Renewable Energy Institute International, Toledo, Ohio, $19.9 million for a pilot plant with a capacity to process 25 dry tons of feedstock per day to produce high-quality green diesel from agriculture and forest residues using advanced pyrolysis and steam reforming.
 
 -	Solazyme Inc., Riverside, Pa., $21.8 million to validate the projected economics of a commercial scale biorefinery producing multiple advanced biofuels. The project will produce algae oil that can be converted to oil-based fuels.
 
 -	UOP LLC, $25 million for a project at Kapolei, Hawaii, to integrate existing technology from Ensyn and UOP to produce green gasoline, diesel and jet fuel from agricultural residue, woody biomass, dedicated energy crops and algae.
 
 Other projects being funded included American Process Inc. $17.9 million for ethanol and potassium acetate, Archer Daniels Midland Co., $24.8 million for ethanol and ethyl acrylate, Haldor Topsoe Inc. $25 million for wood to green gasoline, ICM Inc. $25 million for corn ethanol retrofit to cellulosic ethanol, Logos Technologies $20 million for cellulosic ethanol, ZeaChem Inc. $25 million for poplar trees to ethanol, BioEnergy International LLC $50 million for succinic acid from sorghum, Enerkem Corp. woody biomass and landfill waste to ethanol and green chemicals, Ineos new Planet BioEnergy LLC $50 million to produce ethanol and electricity from wood and vegetative residues, Bluefire LLC $81 million form ethanol from woody biomass and municipal solid waste.

Recovery act funds granted to 19 advanced biofuel projects

Posted December 8, 2009
 

 Laurel, Md., has commissioned W2 Energy Inc., headquartered in Guelph, Ontario, to build a pilot plant for the conversion of municipal solid waste into synthetic diesel fuel and electricity. W2 has deployed "a mobile plasma-assisted-gasifier" small enough to fit inside a 45 ft. trailer, with capacity to covert 4 tons of MSW per day from Laurel's landfill. "In addition to the Laurel project, we have plans to start manufacturing more of these mobile units," said Mike McLaren of W2 Energy. "We think the marketplace is huge for products like this."
 
 "As the W2 Energy 4 ton plant proves itself, the company will work with the City of Laurel to designate a second site for a full size waste to energy plant," the company said, adding that Laurel will foot the bill for the construction of the bigger plant. "Based upon estimates done for W2 Energy by their engineering partner, one metric ton of municipal solid waste will be able to generate 101.25 gallons of gasoline, diesel fuel, JP8 jet fuel and electricity from steam generated by heat recovery," the company Web site states. 
 
 One component of the plant is The SunFilter-a tubular algae bioreactor designed to sequester nitrogen and carbon dioxide gases. The gases enter the bottom manifold of the SunFilter and bubble up through the algae tubes. Low-power ultraviolet lights, in combination with the gases, feed the algae, which grow and fill the tubes with blooms, McLaren said. 
 
 "Most reactors that make diesel fuel from syngas are highly exothermic, meaning they often get too hot," McLAren said. "Our reactor (called the Non-Thermal Plasmatron) performs the conversion at lower temperature, which means greater yields. Hot spots in other plasma gasifiers or fluidized beds will generate more methane and less diesel fuel." 
 
 W2 Energy is also using this technology to make diesel fuel at their facility in Guelph. When the algae blooms have reached an appropriate density, a set of magnetic rings inside the SunFilter tubes scrape them clean and push the algae upward to the upper manifold, where compressed air pushes the algae out. The algae is then compressed and dried, and then either fed back into the NT Plasmatron to be gasified or fed into a biodiesel reactor to make biodiesel. "The advantage of making biodiesel with the algae is that biodiesel has better lubricity than Fischer Tropsch diesel, while Fischer Tropsch diesel has a higher cetane," the company stated. "The combination of the two types of diesel makes a nearly perfect diesel."

W2 Energy moves forward with pilot plant, mobile gasifiers

Posted December 8, 2009
 
 Imperium Renewables Grays Harbor had nicely begun producing after a protracted shut down due to poor economic conditions when a Dec. 2 explosion shut the plant down again. "As we continue to assess the incident we are extremely thankful that no one was injured," Imperium CEO John Plaza said. "We remain committed to restarting our plant as soon as possible to produce the highest quality biofuel." 
 
 A company statement released after the explosion said a glycerin processing tank in the glycerin refining section of the 100 MMgy biodiesel plant ruptured as a result of over-pressurization. There were no injuries and no fire. The 10,000 gallon tank contained heated glycerin. As a result of the rupture, heated glycerin in the tank mixed with cold air creating a large vapor plume. The insulation on the glycerin processing tank was wrapped in an aluminum cover. The force of the rupture scattered aluminum and insulation across the Imperium Grays Harbor property and adjacent property.
 
 In addition, the rupture damaged nearby pipes and two adjacent tanks, containing biodiesel and other materials used in the refining of glycerin, including sulfuric acid held in a 5000 gallon tank provided by the vendor. The processing tank and other tanks are located in a fully contained area and were not endangered. 

 
 A day after the explosion, the company reported representatives from the Washington State Department of Ecology and the U.S. EPA were on site monitoring air quality and measuring environmental impacts around the plant and were not finding air quality issues. It was also confirmed the sulfuric acid leak was limited to the facility's property and should not pose a threat to surrounding bodies of water or nearby residences or business. "The company if grateful for the support of local first responders and the Grays Harbor community as the clean up continues," the company said in its statement. "No additional information on the cause of the accident, or the timeline for repair is available at this time."

Explosion in glycerin refining area shuts down Imperium

Posted December 9, 2009
 
 The Copenhagen Climate Change Summit kicked off Monday and it is the largest round of political negotiations involving the environment since the Japanese talks that led to the now famous Kyoto Protocol. Several things are expected to come out of Copenhagen-if not a firm treaty-outlining a carbon pricing or cap-and-trade system. "Any deal that puts a price on carbon is bound to be good for biofuels," said Bliss Baker, spokesman for the Global Renewable Fuels Alliance. 
 
 The GRFA recently cited a report prepared by (S&T) 2 Consultants Inc. and F.O. Lichts that said "with respect to biodiesel, the forecast global production of 16.4 billion liters (4.3 billion gallons) will reduce GHG emissions by 35.9 million tons."
 
 The combined GHG emissions reduction from global ethanol and biodiesel production of 123.5 million tons represents an average reduction of 57 percent compared to the emissions that would have occurred from the production and use of equal quantities of petroleum fuels, GRFA said. "This is equal to the national GHG emissions of Belgium or Greece, as well as the combined emissions of Monaco, Liechtenstein, Iceland, Latvia, Luxembourg, Slovenia, Estonia, Lithuania and Croatia."
 
 Because of biofuels companies' carbon reducing capabilities they might be able to sell credits under a carbon pricing or cap-and-trade system, which of course would boost the economic viability of the biodiesel industry and its counterparts. "This would add to any benefits the biofuels industries would see from increased use and sales," Baker said. 
 
 But the certainty of any concrete agreement is shaky. "I expect there will be an agreement to keep talking," Baker told Biodiesel Magazine. "Most of our members (44 countries that represent nearly 65 percent of global biofuels production) are optimistic but holding their breath. Everyone is very curious as to what the larger players like the U.S, China and India are going to do."

 
 A congenial and fast solution to constructing a carbon pricing platform that might be "cap-and-trade" or a similar system is not without opposition. "The biggest industry on Earth doesn't want it to happen, so of course there is resistance," Baker said. 
 
 Other highlights of the study, "GHG Emission Reductions from World Biofuel Production and Use," were that global manufacturing surpassed 100 liters in 2009, which is displacing 1.15 million liters of crude oil per day and 215 million tons of GHG emissions regularly. To reach these conclusions analysts utilized a life-cycle assessment approach "to estimate global GHG emissions reduction achieved through the production and use of biofuels from 'cradle-to-grave', including the acquisition of raw materials, manufacture, transport, use, maintenance and final disposal."
 
 The full study can be downloaded at <a href="http://www.globalrfa.org">www.globalrfa.org</a>.

Copenhagen summit could mean big business for biodiesel

Posted December 9, 2009
 
 Dow Water & Process Solutions, a business unit of The Dow Chemical Company (Dow), and Bayer Technology Services GmbH (BTS), announced a licensing agreement for the worldwide marketing of the registered BayFAME technology, a continuous process developed by BTS for the esterification of free fatty acids (FFA) to biodiesel based on the trademarked DOW AMBERLYST BD20 catalyst. 
 
 "With BayFAME, the new clean FFA-esterification technology developed by Bayer Technology Services based on the DOW AMBERLYST BD20 catalyst, our customers will be able for the first time to turn any FFA-containing feedstock into FAME (fatty acid methyl ester) without worrying about yield loss, acids and waste," said Dr. Susanne Mueller, head of Engineering Biomass Conversion at Bayer Technology Services. "Whether customers want to use a specific feedstock like different types of animal fat, used cooking oil, trap grease, jatropha, 100 weight percent FFA, or want to achieve a maximum flexibility in feedstock, we have the solution to get the competitive advantage and flexibility to succeed in a world of volatile oil and raw material prices."
 
 Donna Rohan, EMEA biodiesel sales manager, Dow Water & Process Solutions, said, "We're excited to be working with Bayer Technology Services. Our collaboration is another example of Dow's commitment to the biodiesel industry, and demonstrates the positive impact our expertise and innovative solutions can have on the marketplace."

 
 In today's environment, the manufacturing costs of biodiesel have been strongly dominated by feedstock costs. Feedstock prices, such as those for soybean and rapeseed oil, which can be easily turned into biodiesel (FAME), have reached record highs in 2008. While less expensive potential feedstocks are available, they contain a significant amount of FFA, which cannot be processed in conventional biodiesel plants. In the past, these FFAs had to be treated as waste or as a by-product of low value. Some acid esterification techniques for these FFAs were available in the market but presented significant issues in terms of acid removal and wastewater treatment.
 
 The multi-stage concept offers a flexible process design, which ensures that feedstocks with any FFA content up to 100 weight percent can be processed with an optimum yield and minimum manufacturing costs. For low FFA concentrations, a single reaction stage will sufficiently reduce the FFA concentration to a level as low as 0.1 weight percent, and a three-stage process will cover the complete spectrum up to 100 weight percent FFA.
 
 The BayFAME esterification process can be easily tied-in between the oil pretreatment and the transesterification units of a conventional biodiesel process. The pretreated oil will be directly fed together with dry methanol into the first esterification reactor stage. After the last reaction stage, the FFA initially contained in the feedstock will be converted to FAME, and the resulting product stream can be further processed in a conventional transesterification unit to convert the triglycerides into FAME, as well.
 
 Overall, the savings of using an FFA-rich feedstock with the joint esterification BayFAME technology are significant compared to conventional feedstocks, like rapeseed or soybean oil.
 
 About Bayer Technology Services
 Bayer Technology Services GmbH offers fully integrated solutions throughout the lifecycle of chemical and pharmaceutical plants – from development, planning and construction, to the process optimization of existing plants. The Bayer subsidiary employs almost 2,600 experts worldwide at its headquarters in Leverkusen and other German sites, as well as in regional offices in Belgium, India, Mexico, Switzerland, the United States, the United Arab Emirates and China. In 2008, the company achieved sales of approximately EUR 420 million. Additional information about Bayer Technology Services is available at www.bayertechnology.com.
 
 About Dow Water & Process Solutions
 Dow Water & Process Solutions has a 50 year legacy of providing innovative water and process solutions to both communities and industries alike. A differentiated business unit of The Dow Chemical Company, Dow Water & Process Solutions offers a broad portfolio of ion exchange resins, reverse osmosis membranes, ultrafiltration membranes and electrodeionization products, with strong positions in a number of major application areas, including industrial and municipal water, pharmaceuticals, power, residential water and wastewater and water reuse. More information about Dow Water & Process Solutions can be found at www.dowwatersolutions.com and www.dow.com.

New process turns any FFA-containing feedstock into FAME without having to worry about yield loss, acids and waste process for the esterification of free fatty acids. The licensing agreement covers the worldwide marketing of BayFAME technology.

Bayer and Dow sign worldwide biodiesel technology licensing agreement

Posted December 9, 2009

 
 The World Economic Forum, a nonprofit organization that holds its annual meeting next month in Davos, Switzerland, has given an award to a biodiesel company for the first time. BiofuelBox Corp. is headquartered in San Jose, Calif., and turns wastewater sludge into biodiesel.
 
 "The World Economic Forum recognizes companies they feel have the potential to change the world," said Rick Reddy of BiofuelBox. "There are five 'pillars' WEF uses to evaluate different enterprises-energy, climate change, water, education and healthcare-they saw that what we are doing fits into to three out of five of those categories."
 
 BiofuelBox manufactures skid mounted 1 MMgy processing units that can be deployed virtually anywhere. "Any industry that produces wastewater-ethanol, timber, municipal sewer treatment, food manufacturers-we provide them with the ability to convert their waste into biodiesel, and use it in their fleets or whatever application might be beneficial to them."
 
 What separates BiofuelBox from the dozens of other biodiesel enterprises and their technologies is the ability to process an incredibly impure feedstock. "It's 90 percent to 95 percent water," Reddy said. "After we extract that, and other solids and impurities, [before transesterification] the remaining oil is 90 percent free fatty acid and wildly high in sulfur."
 
 Despite all of those challenges, BiofuelBox's technology still produces ASTM quality biodiesel. "This is not U.S-centric or Midwest-centric or California-centric-we can bring this system anywhere and anticipate building and selling hundreds or thousands of these units over the next few decades," Reddy told Biodiesel Magazine. 
 	
 BiofuelBox installed its first unit located in Idaho, in September, which is processing trap grease and is producing a premium, low sulfur, ASTM compliant biodiesel for on-road use.

BiofuelBox Corp.'s headquarters in San Jose, Calif./PHOTO: BIOFUELBOX CORP.

1885-1294331955.jpg

BiofuelBox wins World Economic Forum award

Posted December 9, 2009
 

 The newest proposal from the German government doesn't go far enough to revitalize the biodiesel market industry leaders argued at the seventh biofuels conference held in early December in Berlin. The German BioEnergy Association (BBE) and the German Union for Promoting Oil Seeds and Protein Plants (UFOP) cosponsored the annual industry conference that attracted more than 450 stakeholders in the biofuel sector from 30 countries.
 
 After a significant decline of the German biofuels market share in transportation from 7.1 percent in 2007 to 5.9 percent in 2008, the recently elected German government had promised a revitalization of the biofuels market in its draft "Law for accelerated growth." The proposal would freeze the tax on B100 and straight vegetable oils for fuel at the current rate for the next three years instead of the phasing in of full fuel taxes on biofuels as scheduled. 
 
 Helmut Lamp, BBE president, pointed the government's own report on biofuels development released in September concluded the economic production of biodiesel and pure plant oil for fuel is not feasible with the current tax rate of 18 cents per liter. "How should then a freezing of this tax rate for the next three years contribute to a revitalization of the biofuel markets?" he asked. A reduction in fuel taxes to no more than 10 cents per liter is needed. 
 
 The biofuels industry also recommended the German government withdraw the planned reduction of the biofuel blending mandate for 2015 from 8 percent to 6.25 percent, saying that the mandate reduction should not be implemented now since the new German ruling coalition has announced it would introduce E10 and consider allowing pure biodiesel or ethanol to meet mandate obligations. "Also, concerns about the impact of increased biofuel production on food prices have proven to be outdated in view of the developments of commodity prices of the last months," the BBE said. 
 
 The German organizations said they welcomed the Federal Agency for Agriculture (BLE) as the governing body for the implementation of the biofuels sustainability regulations, although they said the new rules and guidelines are urgently needed. The new regulations and the certification system as well as certifiers are unlikely to be in place by the July 2010 implementation date for sustainability, they pointed out. They urged 2010 biofuel production not be penalized since farmers and biofuel producers won't have the needed information to securely plan for compliance.
 
 "Minimum requirements on sustainable feedstock production are urgently needed as it is clear that world energy demand will increase significantly while our fossil resources will decline at the same time," said Klaus Kliem, president of UFOP. "But still the implementation of these requirements within the biofuel sustainability ordinance has proven to be quite problematic in practice. The administrative presets have been underestimated in their broad impact not only by the civil servants at the EU Commission, but also by the German government." Kliem suggested the implementation of sustainability regulations be postponed until practical solutions have been developed.

German biodiesel industry recommends policy changes

Posted December 9, 2009
 
 <a href=" http://www.originoil.com/ ">OriginOil Inc</a>.will be collaborating with Japan's Research Institute of Tsukuba Bio-Tech to develop algae-to-jet fuel technologies. RITB recently received funding to develop algae-to-jet fuel applications from the Japan Science and Technology Agency.

 
 Headed by Tsukuba University professor emeritus and algae researcher Takaaki Maekawa, RITB recently signed a memorandum of understanding with OriginOil to develop and distribute systems in Japan for aircraft fuel production, algae to oil production and other industry applications. RITB was recently approved for two years of research and development funding based on its proposal to the Japan Science and Technology agency. Maekawa's presentation, <a href="http://www.maekawabio.org/enkoukaishiryou.pdf ">available on the RITB Web site,</a> pointed to the volume of carbon emissions from Japans major industrial emitters as well the stability of jet oil prices and future demand potential.
 
 "Our funders have set a priority on sustainable aircraft fuels," Maekawa said. "Together with OriginOil we will target these fuels. We look to OriginOil for the needed technology and resources to help carry out this vast assignment."
 
 "We salute Japan Science & Technology Agency for its initiative in algae-based jet fuel," said Riggs Eckelberry, OriginOil CEO. "We are privileged to have been asked by RITB to support Professor Maekawa's high-priority efforts over the next two years. We look forward to helping make his program a major success."
 
 In the partners' first joint action, OriginOil spoke at a recent invitation-only workshop at Tsukuba University, which was attended by RITB collaborators such as Japan Airlines (JAL) Aero-Consulting, IBDAIWA, Mitsubishi Chemicals, Dow Chemical, Dentsu Tech, Tsukuba Agricultural Cooperation, NPO Genki Agricultural Production Organization, Nagata Trade Company, Tosho Merchandise Corporation as well as representatives of Aomori Prefecture and Tsukuba City. Japan Airlines was among the major airlines sponsoring biofuels test flights this year. On Jan. 30, Japan Airlines' showed an improvement in fuel-efficiency from the camelina, algae, and jatropha biofuel blended with jet fuel as compared to the 100 percent traditional Jet A fuel (kerosene).
 
 OriginOil has made several announcements this past year as it makes progress in reducing the cost of harvesting algae and extracting the oil in its proprietary process utilizing its ultrasound-based Quantum Fracturing along with pH modification and electromagnetism. The company is also working on a photobioreactor for algae cultivation.

OriginOil signs MOU with Japanese researchers

Posted December 9, 2009

 
 <a href=" http://www.metroenergy.com/">Metro Biofuels</a> hosted a panel discussion early in December at the site of its 110 MMgy biodiesel plant under construction on a reclaimed stretch of industrial waterfront in Brooklyn, N.Y.
 
 "We were very lucky to have this esteemed group of panelists who educated, enlightened and inspired all of us," said Gene V. Pullo, CEO of Metro Biofuels. "Seeing all of these attendees from such varied backgrounds- business, energy, banking, non-profit, government- come together in support of a smart, sustainable energy future reaffirmed Metro's strong commitment to biodiesel."
 
 The panel for "Fueling a Sustainable Future" included Roger Conway, USDA director of energy policy and new uses, Barbara Glickstein, director of the Hunter College Center for Health Media and Policy, James F. Gennaro, New York City Council Environmental Protection committee chair, Miquela Craytor, executive director of Sustainable South Bronx and Michael Seilback, vice president of public policy and communications for the American Lung Association of New York. The panel was moderated by Leah Archibald, executive director of EWVIDCO, a Brooklyn-based business trade association. Topics of discussion included the health and environmental benefits of transitioning to biodiesel and Bioheat, the opportunities for economic growth provided by a homegrown domestic biofuels sector, the future of various legislative efforts to promote or mandate biodiesel and local green job opportunities being created as a result of the emerging biofuels sector.
 
 Metro Biofuels was formed in 2006 as a subsidiary of Metro Energy, the N.Y. metropolitan area's largest family-owned fuel distributor. A BQ-9000 accredited distributor, the company is building a 110 MMgy multi-feedstock biodiesel processing plant adjacent to its terminal, with plans to receive feedstock via barge shipments. Construction is nearing completion and the plant is expected to be online in the early half of 2010, according to a company spokesman.

Guests arrive at Metro Biofuels' summit "Fueling a Sustainable Future" held at the site of its 110 MMgy plant nearing completion./SOURCE:Metro Biofuels

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Metro hosts event at NY plant nearing completion

Posted December 10, 2010
 

 USDA pushed its projections for soy oil prices up by a couple of pennies in the Dec. 10 World Agricultural Supply Estimates. Soybean exports were increased by 15 million bushels from the previous month to 1.34 billion reflecting the record export pace in recent weeks and higher projected soybean imports by China. U.S. export commitments were at a record high through November, the report said, up almost 60 percent from a year ago. With projected crush unchanged, soybean ending stocks for 2009-'10 are projected at 255 million bushels, down 15 million from last month.
 
 Soybeans and product price projections were all higher this month. The U.S. season-average soybean price range for 2009-'10 were projected at $8.75 to $10.25 compared with $8.20 to $10.20 last month. Soybean oil prices were projected at 35.5 to 38.5 cents per pound compared with 33 to 37 cents last month. The soybean meal price was projected at $260 to $310 per ton, up $10 on the bottom of the range. USDA's projections for soy oil use for methyl esters was unchanged at 2.2 billion pounds.
 
 Global rapeseed production was projected at a record 59.4 million tons, up 1.3 million from last month with gains for Canada more than offsetting lower production for India. Canadian rapeseed production was raised 1.6 million tons to 11.8 million based on the latest survey results from Statistics Canada. Higher-than-expected yields accounted for the change. India rapeseed production was lowered due to reduced harvested area. Hot, dry conditions during much of the planting season prevented India from reaching earlier expectations.
 
 Overall global oilseed production for 2009-'10 was projected at 428.6 million tons, down 0.3 million from last month. Foreign oilseed production accounted for most of the change with increases for soybeans, rapeseed, and cottonseed more than offset by reductions for sunflowerseed and peanuts. 
 
 Global oilseed trade was projected at 94.4 million tons, up 0.7 million from last month. Increased rapeseed exports from Canada and Australia and increased soybean exports from the United States account for most of the change. China soybean imports were raised 0.5 million tons to 41 million, just below the record 41.1 million imported in 2008-'09.

WASDE: Soy export increase lifts price projections slightly

Posted December 10, 2009
 
 Germany's biodiesel quality organization AGQM (Arbeitsgemeinschaft Qualitätsmanagement Biodiesel eV) has published the results of its second round of tests of oxidation stabilizers for biodiesel blends. 
 
 In making the announcement of the new additions to the "no-harm list", AGQM pointed out that the norm for DIN 51628 "urgently recommends oxidation stabilizers as biodiesel component in B7 fuel" and is increasingly part of contract specifications in the industry.
 
 AGQM recently completed a battery of tests on submitted additives to ensure that the chemical or technical characteristics of the fuels are not impaired, that no inadmissible interactions with other fuel components occur and that a comprehensible description of application is available. In addition, tests of the relative efficiency were also performed. 

 
 The "no-harm" list now contains information on 20 tested products from 14 suppliers in six countries. The list is available at the <a href="http://www.agqm-biodiesel.de/index.php?menu_sel=35&menu_sel2=33">AGQM Web site here</a>. AGQM has decided to start a third test period with the test results expected to be available in March 2010.

German AGQM releases second "no-harm" additive list

Posted December 11, 2009
 
 <a href=" http://www.missionnewenergy.com/">Mission NewEnergy Ltd.</a> has entered into a binding five-year biodiesel supply agreement with Valero Marketing and Supply Company, a subsidiary of <a href=" http://www.valero.com/default.aspx">Valero Energy Corp.</a> The offtake agreement also gives Valero the opportunity to buy a 25 percent stake in Mission. 
 
 Valero, a Fortune 500 company and the largest independent crude-oil refiner in North America, made its move into biodiesel supply in the same year that its subsidiary, Valero Renewable Fuels, purchased seven ethanol plants from the bankrupt VeraSun Energy Corp. giving it 760 MMgy ethanol capacity overnight. 
 
 With headquarters in Perth, Australia, Mission New Energy has a 100,000 ton per year (30 MMgy) biodiesel plant operating in Malaysia and extensive jatropha production in development in India. The company has a second, 250,000 ton per year plant under construction in Malaysia with KNM Process System SBhd as the turnkey contractor using Axen second generation heterogeneous catalyst, transesterification technology. The company is also developing a cellulosic ethanol technology that can be integrated into its planned Indian jatropha biodiesel production units. It is hoping to introduce the cellulosic ethanol technology platform internationally as well. Biodiesel Magazine featured Mission New Energy's approach to jatropha development <a href=" http://www.biodieselmagazine.com/article.jsp?article_id=3410&q=&page=1">in the May issue.</a>

 
 Under the terms of the supply agreement, Mission will supply Valero with up to 200,000 tons of biodiesel per year. Valero has the right to double that amount to 400,000 tons per year and to extend the term by an additional five years. The agreement represents gross revenue potential to Mission of over US$3.5 billion based on prevailing market prices, maximum volume and contract life. The first product shipment under the Supply Agreement is expected to occur during the second quarter of calendar year 2010.
 
 Over the course of the contract, Mission will supply Valero with palm biodiesel initially and ultimately with jatropha biodiesel as its supply chain in India expands jatropha production. 
 
 "We are delighted to be supplying Valero and look forward to expanding our commercial relationship," said Nathan Mahalingam, Mission's managing director. "The increasing demand for biodiesel driven by the renewable fuels standard and coupled with this long-term supply agreement solidifies the United States as a key market for Mission going forward."
 
 James Garton, head of corporate finance spearheaded the negotiations with Valero for Mission. "The cooperative spirit of this Supply Agreement has been crafted through a year of discussions and detailed testing of Mission-produced palm- and jatropha-based biodiesel in Valero's U.S. laboratories," he said. "Given the nature of the relationship and the potential to work together on a range of commercial matters, Mission welcomes Valero as a long-term customer and prospective investor."
 
 According to <a href="http://www.missionnewenergy.com/uploads/799917.pdf ">the Mission New Energy announcement, </a> the terms of the equity deal would provide Mission with Australian $36.6 million if fully exercised before Aug. 31, 2010. Valero has the right to purchase up to 25 percent of Mission at Australian $0.45 per common share, representing a 61 percent premium to the current 30 day volume weighted average price.Valero will be able to maintain the 25 percent equity stake through a second round of investments with the price set in the agreement at a 20 percent discount to the 20-day volume weighted average price of the publicly traded Mission. That portion of the agreement expires Sept. 30, 2012. Both transactions with Valero are subject to Mission shareholder's approval.

Mission gets boost from Valero offtake, investment agreement

Posted December 11, 2009
 
 The U.S. House of Representatives passed tax extender package H.R. 4213, which included a one-year extension of the biodiesel blender tax credit. 

 
 "While it remains to be seen when or if the Senate will take up this tax incentive provision, the NBB will continue to work with its membership and Senators to ensure this important measure is passed and signed into law," said Michael C. Frohlich, Director of Communications for the National Biodiesel Board's Washington, D.C., office. 
 
 "In terms of the five-year tax extension that would also alter the credit from a production excise credit to a producer credit, it is clear that due to the legislative calendar and the priorities currently facing Congress-healthcare being front and center-that legislation (S.1589 and HR 4070) will not be voted on this year," Frohlich said. "Therefore, the NBB has decided to endorse the one-year extension as to ensure that the tax credit does not expire, and will continue to work towards a multiyear producer credit in the future."
 
 The bill passed 241 to 181, and was referred to the U.S. Senate where it was received and read twice, then referred to the Committee on Finance.

House passes biodiesel tax credit extension

Posted December 11, 2009
 
 North Carolina is converting traditional tobacco acres to other crops, so the state's Southeastern Community College in Whiteville, N.C., has initiated a program to educate farmers on the ins-and-outs of biodiesel manufacturing, anticipating producers will be growing more oilseeds in the future. Southeastern Community College will be using a mobile biodiesel processor built by Jerome, Arizona-based Verde Biofuel for this program.
 
 Verde's Project F2F is a "self contained mobile unit" that fits into a trailer-Verde Biotrailers can make several thousands of gallons of biodiesel per month. It has the capability to take a batch of raw seeds, "such as soy seeds and press the seed, extract the oil, clean the oil and process it." 
 
 Company founder Tim McClellan launched Verde Biofuel as a subsidiary of Western Heritage Furniture, which he started in Seattle several years before. "We started taking slash and burn timber and materials from old barns and recycling it for furniture," McClellan told Biodiesel Magazine. "This was a green product we were soon delivering to dozens of states and decided we should be delivering it with a green fuel."
 

 While the units are small, they allow students and other would-be biodieselers to view the basic components of methyl ester manufacturing including seed crushers, centrifuges, reactors, methanol recovery apparatuses, fuel polishers, fire suppression and more. "The idea is to be able to transport these units out to farms and show farmers how to make biodiesel," McClellan said.

Verde Biofuel's F2F mobile process unit/PHOTO: VERDE BIOFUEL

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Verde's processor combines extrusion, transesterification

Posted December 15, 2009
 
 Leaked reports, negotiation walk-outs and other issues have fueled a media hype surrounding the United Nations 15th conference of the parties (COP 15) on climate change in Copenhagen this month. Actual results, however, like a legally binding agreement, or consensus among nations are disappointingly distant, says Greenpeace spokesman, Rolf Skar. 
 
 "So far we've seen a failure of leadership from the bigger players in Copenhagen," Skar says, adding that instead of dealing with more concrete issues and the legality of any treaty on the international stage, the U.N. talks are instead mired in very "broad-brush, big picture" issues that lack detail and specificity. 
 
 "Most likely, at the very best, this will give the negotiations some momentum heading into Mexico City next year," Skar says. "It will be a political agreement more than it will be a legal treaty. Obama and his staff show up later this week, however, so we could be surprised."
 
 In regard to biofuels, transparency and accounting directives that track the supply chain are very important for Greenpeace and its position on an international climate change treaty. "We don't have a one-size-fits-all stance when it comes to biofuels," Skar says. "We definitely support those technologies that reduce carbon footprints, but we do not think we see that across the biofuels industries. Everyone should be in favor of rigorous scientific accounting and life-cycle analysis when it comes to biofuels and right now we don't think we see that." 
 
 Providing incentives for developing countries such as Indonesia, Malaysia and Brazil to produce feedstocks for biodiesel on existing agricultural lands instead of clearing more forest land and "driving species to extinction," is an important priority for Greenpeace. 
 
 Several oppositional NGO's have iterated that Greenpeace and other environmental watchdog organizations are "heartless and out-of-touch" with the world's poor and are using international stages like the Copenhagen summit in a campaign to prohibit the proliferation of palm oil and other products that have links to deforestation. 
 
 "I think this is a bunch of hogwash," Skar says. "These are big companies trying to hide their destructive practice behind the face of the poor, and none of them have very good human rights records to begin with-they've been tied to some pretty nasty stuff."

 
 Big news from the summit last week was the leak of a document prepared by the Danish government, "the Danish Text" as Britain's The Guardian called it. The Guardian initially published the document and subsequently said that "it would appear that the Danish government has been trying to establish some kind of underlying consensus among the big western players. This will not warm the delegates from the developing world to the already cold and wet experience of being in Copenhagen." 
 
 Tension between industrialized and developing countries is certainly bearing on the negotiations in Copenhagen. The ways in which European interests, the U.S and other "wealthy" nations help others like Indonesia and China finance their carbon reduction strategies could include biodiesel technologies. "Greentech transfer is a major component of the negotiations right now," Skar says. "[Biofuels] companies might license their products to developing countries at a discount or for free. This would help with carbon reduction strategies and develop new markets for these technologies."

Greenpeace says Copenhagen climate talks flawed, biofuel incentives far-off

Posted December 15, 2009
 
 The Dallas Group of America Inc., the company behind Magnesol dry wash, is offering a new line of adsorbents to help biodiesel producers purify their fuel and pass the cold soak filtration test (CSFT). Called D-Sol, the new product line removes sterol glucosides and other contaminants that cause CSFT failure. 
 
 D-Sol can be used either during regular dry wash purification or as a post-purification treatment after water-wash or ion exchange purification. 
 
 The Dallas Group reports that when D-Sol is used as a part of the regular adsorbent purification process, the incremental cost to the producer is zero. When utilized as a post-purification treatment, the incremental cost is between 1 cent and 2.5 cents per gallon. 
 

 Unlike other post-purification filter treatment systems, D-Sol works at normal process temperatures so there's no need to waste time and energy chilling the fuel down prior to filtration. 
 
 For more information, call the Dallas Group at (800) 367-4188.

Dallas Group offers new cold soak remedy

Posted December 18, 2009
 
 Abstracts are now being accepted for the 2010 Advanced Biofuels Workshop to be held June 14, 2010, in St. Louis. The one-day event, now in its third year, will be co-located with the Fuel Ethanol Workshop & Expo. 
 
 The revised renewable fuel standard (RFS2) calls for 21 billion gallons of advanced biofuels to be blended into the nation's fuel supplies by 2022, 16 billion of which is specified as cellulosic ethanol. The remaining 5 billion gallons will be a mix of undifferentiated advanced biofuel that meets a 50 percent life-cycle greenhouse gas emissions reduction from the petroleum baseline, and will include a mix of methyl ester biodiesel and other forms of biomass-based diesel, cellulosic ethanol, green gasoline, pyrolysis oil, biobutanol, bio-dimethyl ether, and more. 
 
 Conference organizer BBI International expects more than 400 people dedicated to the advanced renewable fuels industries to attend. Speaker abstracts on any advanced biofuel, in addition to algae and next-generation feedstock development, advanced process technology, markets, policy, finance and more, will be considered. To submit an abstract via the 2010 Advanced Biofuels Workshop Web site, click <a href="http://www.advancedbiofuelsworkshop.com/Speaker.aspx">here</a>. Abstracts must be submitted by Jan. 11, 2010.

December 2009

Business Briefs

Dec. 09 BDM Business Briefs

Columns

Partnering to Improve Biodiesel's Outlook

The Ubiquitous Diesel, Positive Biodiesel News

Featured

Sophistication and Delivery

A New Class of Jet Fuel

B20: The Best of Both Worlds

Expanding the Feedstock Portfolio

December 2009.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

Dec. 09 BDM Business Briefs

Columns

Partnering to Improve Biodiesel's Outlook

The Ubiquitous Diesel, Positive Biodiesel News

Featured

Sophistication and Delivery

A New Class of Jet Fuel

B20: The Best of Both Worlds

Expanding the Feedstock Portfolio

December 2009