Credit is tight. Whether you're trying to finance or refinance a project or simply stay afloat, credit issues have undoubtedly had an impact on your business in 2009. Securing financing for biodiesel facilities has never been an easy task. Even in 2007, when gas prices reached $4 a gallon and the credit markets contained a sufficient number of lenders willing to make a deal, biodiesel plant owners were required to doggedly pursue sources of investment and credit. Two years later, with gas at $2.60 a gallon and a recession that has battered the credit markets, biodiesel plant owners must have a laser-like focus on securing and maintaining financing to keep their business operating. Remaining viable in current economic conditions requires owners to consider how credit-both upstream and downstream of their operations-affects their ability to do business.
 
 
 Upstream: Working with Lenders
 
 The Federal Reserve recently reported that credit during the third quarter of 2009 remained especially tight for commercial and industrial loans. Banks that tightened credit requirements for business loans cited a reduced tolerance for risk, an uncertain economic outlook, and "industry-specific problems." During the quarter, 14 percent of polled banks increased standards for large commercial and industrial loans, while none reported relaxing standards. When credit is tight, the following approaches can help you achieve favorable outcomes with lenders. 
 
 Build your case Engage in some strategic thinking about why your business is uniquely qualified for credit in this market. What advantages do you have over your competitors that could reassure lenders of your ability to repay compared to others? Be realistic, but present this to your current or prospective lender in a convincing manner. Supplying numbers from reputable sources as evidence (of sales trends or market demands, for instance) will give your statements credibility and make them more compelling. 

 
 Disclose your weaknesses Lenders don't like surprises. Negative information will go over a lot better if you reveal it upfront rather than if it is discovered by your lender. Equip yourself with a practical plan for counteracting your weaknesses, including projected time frames for doing so. This is important whether you're working with your current lender or trying to find a new one. Disclose your problems before they show up in a periodic report. For example, maybe your earnings have been weak-or negative-over the past year. That's a weakness but certainly not a deal killer if you can realistically project positive cash flows and earnings in the near future.
 
 Choose your lender wisely If you can, do business with financially secure lenders. Particularly if you are relying on a line of credit for working capital, you need assurance that your lender will be available to provide it. You can learn a lot about FDIC insured banks by looking at the FDIC's website, www.fdic.gov. The site will provide financial information on insured institutions and reveal any formal enforcement actions that have been taken. 
 
 
 Downstream: Protect Yourself from Nonpaying Customers
 
 All businesses, including biodiesel producers, need to plan to avoid or minimize losses from customers who do not pay or file for bankruptcy. Facility operators can protect themselves by making extra efforts. 
 
 Know the customer If you're selling on credit terms, evaluate your customer's creditworthiness. Know what lines of credit and other resources your customer has available, and evaluate your customer's stability. You don't want to become your customer's long-term lender.
 
 Minimize credit exposure Tighten your credit terms and don't let your customers get too far behind on payments if you continue to supply them with fuel. Consider whether your credit terms need to be tightened, and require cash upfront or letters of credit where appropriate.
 
 No business will be successful in the long term without prudent credit management. These economic times have proven that point to far too many companies. Now is a good time to evaluate what has and hasn't worked during this downturn. Make immediate improvements where you can, and don't slack off when the economy improves.
 

 
 Ron Vaske is a partner in the Financial Institutions and Commercial Lending Practice Group of Lindquist & Vennum PLLP. He can be reached at (612) 371-3211 or r<a href="mailto:rvaske@lindquist.com.">vaske@lindquist.com</a>.

1963-1294331990.jpg

Doing Business in a Tight Credit Market

Now that the U.S. EPA's Clean Air Act 2010 mandate to reduce nitrogen oxide diesel emissions is in effect, transportation professionals are no longer planning for the future-we're living it. The promise of 5 percent better fuel efficiency using SCR systems is a substantial economic carrot, but before we can bite into it, we have to overcome integrating new technology into our fleets and training our teams on best practices. 
 
 Randy Weiss, vice president of sales for Mid-Town Petroleum in Chicago, said there has been a lot of hype in the trucking and heavy-duty industry communities about diesel exhaust fluid (DEF). Last December, Mid-Town trained 12 team members in how to properly store, manage and distribute Air1, the DEF offered through Mansfield Oil's supply partner, Yara, the world's largest DEF manufacturer. Weiss cited that the extensive training offered by Mansfield and Yara was a core reason to go with the Air1 brand. Yara first began offering its DEF product in Europe four years ago, and now more diesel-powered vehicles worldwide use the Air1 solution than any other. 
 
 Mansfield is a national fuel distributor operating the largest commercial fuel distribution network in the U.S., and delivers more than 2 billion gallons of fuel to customers annually. The Mansfield DeliveryOne approach to supplying fleets accents local service, delivering DEF down the last mile through existing fuel, petroleum and lubricant jobbers, to fleets that are already doing business with Mansfield. The DeliveryOne network distinguishes itself as the only national DEF supply option backed with international supply depth. 
 
 Yara's Sluiskil plant in Netherlands is the largest DEF production facility on the planet. Mansfield partnered with Yara because it wanted a long-term partner with global reach. There is enough domestic DEF production right now, but when the demand curve for DEF spikes, Yara is in a supply position to meet demand from the large North American market. 
 
 Most North American DEF producers have already locked down supply arrangements. Cherokee Chemical, for example, supplies Yara and Mansfield exclusively, while Dyno Nobel provides DEF to highly specialized urea distributor Cervantes-Delgado. But domestic demand for DEF is going to be sluggish for the next few years. The investment to bring a plant online to produce at today's volumes doesn't make good business sense, which is why Mansfield's DeliveryOne offering relies not only on domestic production, but can also access the mature European DEF market through Yara.
 
 Looking at U.S.-based options, a company to watch is AirGas, a spin-off division of La Roche, a 100-year-old ammonia producer headquartered in Atlanta with 24 locations. Recently separated from its parent company, AirGas has deep experience in ammonia-related chemical manufacturing and distribution across a spectrum of industries, and has set its sights on being a DEF supply contender. 
 

 Another early supply contender is Terra Industries. The $2.8 billion dollar chemical company has 6 locations. They've chosen leading chemical distributor Brenntag as their exclusive partner.
 
 Air1 DEF was in place nationally as early as late last November. Mansfield's DeliveryOne locations weren't alone in getting product in place early. A number of truck stops are also carrying quantities of DEF. Pilot has 100 of its 310 truck stores stocked with DEF, and plans to add 25 facilities per quarter until each location carries both 2.5 and 1 gallon jugs. 
 
 Tom O'Brien, CEO of TravelCenters/Petro, said his company's 230 locations will offer gallon jugs of DEF for sale, bulk DEF dispensing tanks in all 1,000 maintenance bays in its service shops, and some bulk dispensing tanks at its fuel islands. "We have no concerns that we won't have enough DEF supply-we're getting all we need right now," he was quoted as saying in Fleet Owner in March. 
 
 National demand for DEF is projected to grow steadily but slowly in the next decade as fleet owners bring new engines online, replace existing engines with SCR-equipped ones, and rebalance fleets to take advantage of the fuel efficiencies around DEF. Overall national demand is expected to hit approximately 1 billion gallons per year by 2019. As you build out your own DEF strategy, consider these resources for up-to-date information:
 
 &bull; DEF information hub: OPIS offers an outstanding information portal on DEF news and developments at www.opisdef.com.
 &bull; DEF demand projections: Mansfield provides a free, interactive map of the U.S. on its Web site, www.mansfieldoil.com, under the tab "Air1 DEF," which shows the demand in annual gallons per state.
 &bull; DEF consumption calculator: At the same Web site, Mansfield provides a consumption calculator that allows you to enter the average fleet miles per truck, average miles per gallon, number of SCR-fitted trucks, to find out how much DEF you'll need for your fleet and how many DEF fill-ups to schedule per month.
 &bull; DEF legislation: Yara compiles global legislative information regarding nitrogen oxide emissions and DEF at http://us.air1.info/en/all-about-def/legislation/.
 
 Bob Gray is director of biofuels with Mansfield Oil, and Doug Haugh is executive vice president and chief information officer for Mansfield Oil. Reach them at (800) 695-6626.

1964-1294331990.jpg

1965-1294331991.jpg

SCR Systems Go Mainstream

As we put the final touches on this February issue of Biodiesel Magazine, there is little good news to report on the industry right now-as you must know. For the first time since it was passed in 2004, the federal blender tax credit, a staple for the industry, has lapsed. 

 
 Biodiesel was barely cost competitive with the $1-per-gallon incentive, and with the much lower diesel prices of 2009, it was still rare to find a gallon of B99 cheaper than No. 2 diesel. Now, without the credit, B100 and No. 2 diesel prices aren't even close. A source close to legislators in Iowa tells me it may be March before Congress even begins to remedy the situation. 
 
 The biodiesel industry has faced major challenges for years. Despite this, the industry hangs on, driven by all of the dedicated individuals in the forefront and behind the scenes. The core of the industry must be comprised of optimism.
 Being an optimist myself I believe this entire experience could be used for the industry's benefit. What better time to make a compelling argument to Congress for a longer-term biodiesel tax credit than when the incentive disappears and production screeches to a halt on the brink of the U.S. EPA implementing the first federal biomass-based diesel fuel standard, making fulfillment of the standard economically unfeasible? 
 
 Expiration of the tax credit will have a number of different effects outside of meeting RFS2 requirements. In underground mining operations, biodiesel has become a preferred, low-cost method of reducing carcinogenic particulate emissions-by 47 percent compared to No. 2 diesel-that miners are exposed to from the equipment exhaust. Also, various government fleets are required to use renewable fuels such as B20 where available. If production stops, there will be little or no biodiesel for these fleets to meet their requirements. A handful of states , including Minnesota and Illinois, have biodiesel mandates, the fulfillment of which may be jeopardized as a result of the tax credit situation. The fact is, allowing renewable fuel blending obligations to slide because of the lack of available supply is a dangerous road we as a nation should not go down. It's a slippery slope-and we had better put our cleats on. 
 
 I hope you find this month's issue interesting and informative. In my feature article, "Year of the SCR System," on page 44, I review how urea selective catalytic reduction (SCR) systems work at controlling nitrogen oxide emissions from new diesels and the potential technological glitches yet to be fully worked out. Despite some of the issues associated with SCR systems, there are few concerns about the interaction of biodiesel blends with the sophisticated exhaust technology. 
 
 In "Europe's Diesel Portfolio," on page 32, Associate Editor Nicholas Zeman profiles the relationship between biodiesel and the extensive diesel passenger vehicle offerings in Europe. Interestingly, Zeman finds there is disappointment and concern at automakers' unwillingness to embrace biodiesel blends greater than 7 percent.
 
 Assistant Editor Susanne Retka Schill's review of the Canadian Renewable Fuels Summit held in Vancouver, British Columbia, in December, is featured on page 38. This is Schill's last issue as assistant editor of Biodiesel Magazine, as she has taken over editorship of Ethanol Producer Magazine. 

 
 Enjoy the 2010 National Biodiesel Conference & Expo!

1920-1294331971.jpg

Feeling the Effects

Most biodiesel processes use a catalyst to increase the rate of reaction, but various studies have been conducted on eliminating its use. One example is supercritical transesterification, which occurs at 350 degrees Celsius at pressures of 20 bar, exceeding the critical conditions of methanol. According to laboratory experiments, reaction time is only 15 minutes and high alcohol to oil ratio (42:1) is required1. A simpler process requiring less equipment makes supercritical transesterification an attractive alternative. 
 
 The high cost of biodiesel compared to petroleum diesel impedes its commercialization. It was analyzed that 70 to 95 percent of total biodiesel production costs depend on raw materials costs2. Jatropha oil has gained popularity as biodiesel feedstock because of the ease of planting at minimal cost. In the Philippines, government and industry members are taking action to increase jatropha planting. The Philippines Biofuel Act (Republic Act 9637) mandates mixing 1 percent biodiesel in petrodiesel. Coconut methyl ester (CME) is the only product used for blending today. Jatropha biodiesel would open alternatives for consumers.
 
 The objective of this study is to design the process of supercritical transesterification using crude jatropha oil as feedstock, and to conduct an economic study assessing its feasibility in the Philippines using material and energy balance calculations from ASPEN Plus simulation software. 
 
 
 Process Design and Simulation Basis
 
 ASPEN plus version 12.1 was used. Non-Random Two Liquid (NRTL) was chosen to compute thermodynamic and transport properties. The plant capacity is 9 x 106 liters per year per hectare (l/ha), which requires about 12,000 hectares (29,653 acres) of cultivated land. The conversion of 730 l/ha was used3. A simplified process flow sheet is presented in Figure 1. Methanol, stream 101, and crude oil at 25 degrees and 1 bar (102) were mixed and pumped to the system at a pressure of 20 bar. Fresh methanol was combined with recycled methanol (201) from DC-1, and the series of heat exchangers, HX-1 and HX-2 in the diagram, increased the stream temperature. The reactor converts the triglyceride to fatty acid methyl ester (FAME) at 350 degrees and 20 bar with 94 percent conversion. Temperature, pressure and conversion were recommended based on laboratory experiments4. Stream 107 pressure was reduced and cooled through HX-1 and HX-2. Stream 109 was fed to methanol distillation column DC-1 where the reaction products and methanol are separated.
 

 DC-1 operates at a pressure of 1.013 to 1.063 bar, and temperature of 64 to 202 degrees. There are seven theoretical stages including the condenser and reboiler as a stage. The feed enters at stage 3, and an optimum reflux ratio of 3.29 is established. The cooling water for the condenser, and medium-pressure steam (11 bar) for the reboiler, are what utilities are required in the process. This separation is energy intensive, using more steam and cooling water compared to the second distillation process. 
 
 In the laboratory, methanol is typically evaporated5, which is unacceptable in commercial applications since methanol can still be used as a reactant, especially when the methanol-to-oil ratio is high. In the feed of DC-1, 99.7 percent of methanol was recovered and recycled. The bottom product from DC-1 is cooled through HX-3 and then sent to the gravity settling tank (DE-1). DC-1 is a tray type, or bubble cap, column. The software calculated the diameter and height based on conventional tray spacing of 0.6 meters and the Fair flooding calculation method.
 
 Stream 202 (FAME, glycerol and unreacted triglycerides) is cooled and then sent to the decanter (DE-1). Due to the polarity of glycerol, it can be easily separated by gravity settling with the same separation as applied in experiments5. More than 99 percent of the glycerol was recovered. 
 Stream 301 is the feed to the second distillation column (DC-2) where purification occurs. The total number of theoretical stages is 13 including condenser and reboiler. Feed enters at stage 9. Utilities used were cooling water and high pressure steam for condenser and reboiler, respectively. Pressure ranges from 0.5 to 0.6 bar, and temperature from 140 to 370 degrees. DC-2 was set to operate at vacuum conditions to lower the operating temperature. Distillate (405) and bottom (406) products from DC-1 are subsequently cooled for storage. Recovery of biodiesel is 99.96 percent, and product purity is 99.8 percent biodiesel. DC-2 is a tray type (bubble cap) column. ASPEN Plus calculated the diameter and height based on the tray spacing at 0.6 meters and Fair flooding calculation method.
 
 
 Economic Analysis
 
 Basis and assumptions Costs were generated based on 9 x 106 L/yr capacity, operating 8,040 hours per year (335 days per year), 3 shifts per day and continuous operation. A Class 4 estimate was used, with accuracy ranging from minus15 to 50 percent. The estimating method used was equipment-factored6. Equipment costs were from historical cost database of purchased equipment priced in dollars and converted to Philippines peso (PhP). The conversion used was 1 U.S. dollar equals 48 PhP. The database accounted for escalation price based from the year it was purchased. Utilities costs were taken from the actual cost of an industrial plant in the Philippines dated February 2009. Seventy percent pump efficiency was assumed for electricity cost. 
 
 Manufacturing cost7,8 Price of jatropha crude oil was assumed to be PhP15.85 per kilogram. Base comparison of the price was coconut oil cost, which was around PhP 30/kg to 40/kg. The commercial jatropha price is expected to be lower compared to coconut oil. The price of methanol used was based on October 2008 market prices, which was PhP 21/kg. The price of crude glycerol used was PhP 10/kg. Glycerol from biodiesel production is sold and can be used as a feed in the soap industry. No monetary credit was allotted for Triolein waste (stream 406). 
 

 Factors used to obtain the manufacturing cost were taken from Ulrich, 1984 and Turton et al 1998, with some minor adjustments. The price of jatropha feedstock is the major contributor in the total manufacturing cost consisting of 46 percent. This plays an important factor in making japtropha more favorable than coconut oil as a feedstock. 
 
 ROI, PBP and breakeven price Manufacturing costs show a positive return on investment (ROI) and short payback period (PBP). This year, the domestic interest rate of Banko Sentral ng Pilipinas Central Bank of the Philippines ranges from 6 to 6.5 percent9. To attain 7 percent ROI, the crude oil price should be lower than PhP 16/kg and a selling price of biodiesel should not be less than PhP 45.72/l. The selling price of CME in the Philippines as of February 2009 is PhP 41/kg. The significant difference in price opens an opportunity, especially as Biofuel Law RA 9367 is strictly implemented in the country, along with the possibility of increasing biodiesel's blend percentage in petroleum products in the future. 
 
 In supercritical process, although costs of catalysts and other chemicals are eliminated, high costs of utilities arise as a result of methanol recovery. Feedstock and utilities costs are the two major factors that contribute to manufacturing costs. 
 
 A biodiesel plant utilizing supercritical transesterfication requires a high capital investment, despite being one of the simplest ways to produce biodiesel. To attain a 7 percent ROI, which is higher than government interest rates, the crude oil price should be lower than PhP 16/kg and selling price of biodiesel not less than PhP 41/kg. 
 
 Presently, it is not economical to replace diesel with biodiesel only. The price of diesel is still lower compared to biodiesel. Jatropha biodiesel is a possible alternative to CME for blending purposes.
 
 References
 1. Kusdiana, D., Saka, S. (2001). Kinetics of transesterification in rapeseed oil to biodiesel fuel as treated in supercritical methanol. Fuel 80, 693-698.
 2. Krawczyk, T. (1996). Biodiesel. INFORM 7 (8), 801-822.
 3. Mendoza, T., Castillo, E., Aquino, A. (2007). Towards making Jatropha "tubang bakod" a viable source of biodiesel in the Philippines. College of Agriculture, University of the Philippines Los Baños, Laguna Philippines, 9 pp.
 4. Ngamprasertsith, S., Bunyakiat, K., Makmee, S., Sawangkeaw, R. (2006). Continuous production of biodiesel via transesterification from vegetable oils in supercritical methanol. Energy and Fuels 20, 812-817.

 5. Petchmala, A., Goto, M., Sasaki, M., Shotipruk, A., Yujaroen, D. (2008). Production methyl esters from palm fatty acids in supercritical methanol. Chiang Mai Journal of Science 35(1), 23-28.
 6. Coker, A.K. (2007). Ludwig's applied process design for chemical and petrochemical plants, volume 1, 4th edition. Gulf Professional, Oxford: U.K.
 7. Ulrich, G.D. (1894). A guide to chemical engineering process design and economics. John Wiley & Sons Inc., Hoboken: U.S.
 8. Turton, R., Bailie, R.C., Whiting, W.B. Shaeiwitz, J.A. (1998). Analysis, synthesis, and design of chemical processes. Prentice Hall PTR, New Jersey: U.S.
 9. Banko Sentral ng Pilipinas. (2009, May 19). Daily News Release. Retrieved May 19, 2009, from http://www.bsp.gov.ph/statistics/keystat/keystat.htm.
 
 Miriam Abigail Chang and Raul Bicol are process engineers with Fluor Daniel Inc.–Philippines. Chang can be reached at <a href="mailto:Miriam.abigail.chang@fluor.com">miriam.abigail.chang@fluor.com</a>.

Figure1. After transesterification, the system pressure is lowered to atmospheric. DC-1 operates at ~1.013 bar with 7 stages. DC-2 operates at ~0.5 bar with 13 stages.

1952-1294331985.jpg

Table 1. Methanol recovery is 99.7 percent, 99.5 percent for glycerol and 99.96 percent for biodiesel. Product purity is 99.8 percent biodiesel.

1953-1294331985.jpg

Table 2. Factors were from Sinnot, 1998. Costs of equipment were evaluated- reactor, columns, transfer pumps, heat exchangers and storage tanks. Highest percentage of the investment accounts for the equipment cost and design and engineering fee at 18

1954-1294331986.jpg

Minimizing production costs through new technology is the focus of much research in biodiesel. Supercritical transesterification eliminates some costs and reduces environmental and safety concerns, but higher utility costs could offset those benefits.

Conceptual Design Study of Supercritical Transesterification

Poland Springs Bottling of Maine was recognized by the Environmental Defense Fund for its performance in curbing carbon emissions. Mostly recently, the company has drastically reduced idling time by 70 percent. The greening of the Poland Springs fleet began with using B5 in 2007. The company estimates it used enough B5 over two years in its fleet of 36 tractor-trailers to reduce its carbon emissions by 1.8 million tons. Fleet manager Chris McKenna added they have seen an increase in overall fleet fuel economy, amounting to a 0.1 mile-per-gallon savings over 17 months compared to the previous 17 months. The gain in fuel efficiency is attributed to improved lubricity of biodiesel blends. Poland Springs has also seen a $70,000 savings in fuel cost, McKenna said, with the biodiesel blend prices ranging between 6 cents and 12 cents per gallon less than ultra low sulfur diesel.

1921-1294331972.jpg

Poland Springs praised  for greening efforts

Swedish manufacturer of modular biodiesel production systems, Ageratec, has announced the release of its new feedstock pretreatment system, which the company has named Advanced Glycerol Pretreatment. The AGP unit, developed by Ageratec and its U.S. representative, Seattle-based E3 Energy Partners, can be incorporated into Ageratec's existing PE24000 processor models or retrofitted as a standalone pretreatment into biodiesel plants of any design. When incorporated into existing Ageratec PE24000 processors, which can already esterify 24,000 liters (6,340 gallons) per day of feedstock with up to 10 percent free fatty acid (FFA) content, AGP will allow the same throughput of feedstock ranging from 10 to 100 percent FFA content, such as brown grease or palm fatty acid distillates.

Ageratec introduces new  modular pretreatment unit

The UK Sustainable Biodiesel Alliance's lobbying efforts to prevent the loss of a 20 pence per liter duty differential was successful. In early December, the UK government announced that the duty differential for used cooking oil biodiesel will continue for two years. The government had earlier announced it would drop the tax discount on all biodiesels because it could not distinguish between sustainable biofuels and those that raise greenhouse gas emissions or cause wider sustainability concerns. The UK SBA argued that removing the differential would make sustainable biodiesel uneconomic to produce when compared against fossil-based fuels, threatening jobs and increasing carbon emissions.

UK preserves duty differential

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 extractor" refinery systems at the Corona facility. These units are designed for small business owners and individuals to produce (nonresale) biodiesel at their own locations. "Last year, the company shipped almost $1million worth of these units," Envirotek said. "Production is being increased for 2010 with a sales target of $2 million for the "mini extractors."

Envirotek projects future sales numbers

Johann De Nysschen, president of Audi North America, has a message for the current U.S. administration-refrain from "prejudging winning and losing technologies" as it makes policies depending on the future of the automotive marketplace. Nysschen said there has been favoritism shown to the electric vehicle sector. "Clean diesel, done correctly, is more efficient, has lower emissions, with better performance characteristics, at a lower price,'' Nysschen said. "And then we haven't even touched on the potential of biofuels, using biomass to produce clean diesel, which would come very close to a carbon neutral footprint much sooner and far more cost efficiently than having to cope with the disadvantages of prematurely switching to electrical vehicles for high-volume passenger cars."

1922-1294331973.jpg

Audi tells Obama 'think biodiesel'

Over the next year, select Canadian producers will evaluate biodiesel's quality retention and performance in farming equipment and bulk storage facilities in all seasons including the coldest winter months, as part of a demonstration project led by the Saskatchewan Research Council in Regina. SRC said results from the study will assist in moving the federal government's renewable fuels regulation forward-it would require a 2 percent blend of biodiesel in the country's diesel and heating oil pool in 2012.

Saskatchewan Research  Council to evaluate biodiesel

The newest proposal from the German government doesn't go far enough to revitalize the biodiesel market, leaders argued at the seventh biofuels conference held in December in Berlin. The German BioEnergy Association and the German Union for Promoting Oil Seeds and Protein Plants (UFOP) called for a reduction in fuel taxes on biodiesel to no more than 10 cents per liter instead of freezing the current rate of 18 cents per liter as proposed instead of phasing in full fuel taxes over the next three years. The German organizations also recommended the German government withdraw the planned reduction of the biofuel blending mandate for 2015 from 8 percent to 6.25 percent. "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 past months."  The president of UFOP recommended the implementation of sustainability regulations be postponed, saying "the implementation of these requirements within the biofuel sustainability ordinance have proven to be quite problematic in practice."

German industry  recommends policy changes

Canadian Pacific Railroad announced in late November that it has partnered with Natural Resources Canada to test biodiesel in locomotives as part of the National Renewable Diesel Demonstration Initiative. It is the first time biodiesel will be used in Canadian cold-weather rail service. Canada's government is evaluating the technical feasibility in advance of implementing a B2 mandate, scheduled for 2011.

1923-1294331973.jpg

Canadian Pacific tests biodiesel in cold weather

In December, Germany-based SMOTEC Plus opened its new 60,000 ton per year sodium methylate manufacturing facility in Dammam, Saudi Arabia. SMOTEC Plus, which is short for sodium methoxide technology plus other related chemical products, is targeting biodiesel producers and other customers in the U.S., Canada and Brazil for the marketing of product from its newly added catalyst production capacity. Prior to the opening of the Dammam plant, the company was marketing its then-existing sodium methylate production volume to customers in Europe, India, Argentina and Brazil. 
 
 "Our sodium methylate manufacturing process uses raw materials such as caustic soda and methanol, unlike other manufacturers whose processes are based on mercury cell-based chlorine and sodium metal," said Prasad Devineni, SMOTEC Plus director. "In addition to sodium methylate solution, our new plant produces sodium methylate powder, which is used in the transesterification of oils for the food industry. To comply with food industry standards, all production processes and operations adhere to strict quality requirements mandated by the food industry certifications." 
 
 By utilizing caustic soda and methanol rather than mercury-cell based chlorine and sodium metal, Devineni said SMOTEC Plus' sodium methylate is much more desirable for the food industry and biodiesel producers seeking to sell their refined glycerin into the food, beverage, pharmaceutical and nutraceutical markets. 
 
 "The food industry and glycerin markets do not like catalyst that comes into contact with mercury," Devineni said. "The sodium metal process is used in the production of sodium methylate in the U.S. Because of our caustic-based process, we can locate our future sodium methylate production facilities close to the consuming markets so that we have shipping cost advantages." 
 
 Germany-based SMOTEC Plus anticipates bringing another 50,000 tons of annual sodium methylate production capacity on line by 2011, mainly to meet the anticipated global demand growth for biodiesel markets, Devineni told Biodiesel Magazine. "Ideally, it is cost effective to expand at the same location," he said. "However, markets will dictate where we have to locate our additional capacity. We cannot rule out the possibility of Brazil at this time for our next expansion in a year." 
 
 Devineni said its biodiesel customers typically pay between 5 cents and 7 cents per gallon of biodiesel produced for SMOTEC Plus' sodium methylate, depending on which feedstocks-and ultimately the free fatty acid content of those feedstocks-producers use.

SMOTEC Plus, new sodium methylate manufacturing plant markets to the U.S., Canada and Brazil. PHOTO: SMOTEC PLUS

1924-1294331973.jpg

New biodiesel catalyst plant opens in Saudi Arabia

Two global powerhouses, Bayer Technology Services GmbH and Dow Water and Process Solutions, joined forces recently to offer a new biodiesel process, trademarked BayFAME. Based on the Dow Amberlyst BD20 solid acid catalyst, which Dow acquired when it purchased Rohm and Haas in early 2009, the BayFAME process allows producers to convert feedstocks of any free fatty acid (FFA) content to methyl esters "without worrying about yield loss, acids and waste," said Susanne Mueller, BTS head of engineering biomass conversion. "[BTS], working with Dow Water and Process Solutions, has designed the complete esterification process from reaction kinetics, process design, mass-to-heat balances and equipment design, with global patents filed." She said customers can choose from feasibility studies, engineering packages or turnkey operations for FFA esterification using the licensed BayFAME process. 
 
 For feedstock streams with lower FFA content, a single reaction stage can reduce the FFA concentration to as low as 0.1 percent by weight. "Depending on the necessary conversion needed to ensure excellent downstream transesterification kinetics, more than one [esterification] stage may be necessary, with inter-stage water removal, to drive the equilibrium and complete the reaction," Mueller said. Thus, for high-FFA feedstocks, a three-stage BayFAME process can be employed to handle up to 100 percent FFA streams. 
 

 BayFAME is being offered as both an inline and offline esterification process. "Inline means FFAs and the triglyceride portion is going through all stages," Mueller explained. "Offline includes an FFA separation step. The standard process is the inline version." 
 
 Donna Rohan with DWPS said there are numerous advantages from basing the BayFAME process on the Amberlyst BD20 catalyst. "There's less waste, improved safety and handling, less stringent metallurgy for reactors, potentially less sulfur in the product, and more environmentally benign processing," she said. "During the development of Amberlyst BD20, a novel solid acid catalyst with the correct polymer structure and morphology was created, which has an environment amenable to both hydrophobic and hydrophilic substrates." 
 
 Rohan couldn't say exactly how long the solid acid catalyst is guaranteed to remain active and effective. "Since all feed streams are not created equal, this is a difficult question to answer directly," she told Biodiesel Magazine. "What we can say is that none of the raw materials of the reaction, meaning fatty acids, methanol, water or glycerides, will harm the catalyst. Its lifetime is dependent on the impurities present in the feedstock. These impurities can be classed as chemical or physical foulants." To help extend catalyst life, Rohan said scientists have developed the trademarked Dow Ambersep BD19 guard-bed material to remove impurities before they can deactivate the catalyst. 
 
 The BayFAME esterification reaction is run at similar pressures and temperatures as traditional transesterification. 
 
 "Being able to use a variety of feedstocks, those less expensive than virgin refined oils, is clearly advantageous," Mueller said. "It all boils down to minimizing production costs."

Resins, in a close-up image shown above, help purify biodiesel made in Bayer's BayFAME process, which uses Dow's BD20 solid catalyst for FFA esterification. PHOTO: DOW WATER AND PROCESS SOLUTIONS

1925-1294331974.jpg

Bayer, Dow join biodiesel forces

Valero Marketing and Supply Co., a subsidiary of Valero Energy Corp., recently entered into a binding five-year biodiesel supply agreement with Mission New Energy Ltd. Valero is North America's largest petroleum refiner, and in December the company's media liaison Bill Day told Biodiesel Magazine that the developing renewable fuels sector has offered the company a chance to diversify. "It's still a relatively small part of our business, but it's growing rapidly with our biodiesel deal and the acquisition of three new ethanol plants," Day said. "As for our marketing and sales strategy for biodiesel, Valero is preparing for government mandates that will require the blending of biodiesel into diesel fuel."
 
 The new offtake agreement gives Valero the opportunity to buy a 25 percent stake in MNE. Valero obviously has many options as to which companies it can invest in and deal with. Platform and price are what made MNE stand out from the hundreds of potential companies that would value the opportunity to partner with Valero. "Their work with jatropha is really what interested us," Day said. "And we were able to work out a really good arrangement."
 
 With headquarters in Perth, Australia, MNE 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 Axens' second-generation heterogeneous catalyst technology. 
 
 MNE is also developing a cellulosic ethanol technology that can be integrated into its planned Indian jatropha biodiesel production units, and which it anticipates introducing internationally, as well. 
 

 Under the terms of the supply agreement, MNE 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 MNE of more than $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 second quarter 2010. Over the course of the contract, MNE 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, MNE managing director. "The increasing demand for biodiesel driven by the renewable fuels standard, coupled with this long-term supply agreement, solidifies the U.S. as a key market for Mission going forward." 
 
 James Garton, head of MNE corporate finance, spearheaded the negotiations with Valero. "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 the MNE announcement, the terms of the equity deal would provide the company with $36.6 million in Australian dollars ($33.4 million) if fully exercised before Aug. 31, 2010. Valero has the right to purchase up to 25 percent of MNE 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 MNE. That portion of the agreement expires Sept. 30, 2012. Both transactions with Valero are subject to MNE shareholder approval.

Valero's Corpus Christi refinery, which was completed in 1983, is one of the U.S.'s newest and most complex petroleum refineries. PHOTO: VALERO ENERGY CORP.

1926-1294331974.jpg

Valero builds its renewables base, prepares for mandates

Chicago-based Carbon Solutions Group is working towards approval for a methodology that will award biodiesel producers carbon credits. The CSG methodology uses data compiled by the U.S. DOE Energy Information Administration as well as plant-specific information. 
 
 The process of quantifying the carbon throughout the life cycle of the biodiesel begins with the feedstock, and is applied throughout the process until the biodiesel is consumed. Variables such as the distance the feedstock travels to the plant, methanol usage and recovery, and fossil fuel consumed at the production facility are used to calculate the carbon content of the fuel from a specific biodiesel plant. Finally, the producer must track how the product is transported so the energy used for trucking, rail or pipeline transport, and ultimately the destination market, can be included. The carbon value from each step is totaled and compared to a baseline to generate a carbon credit that can be sold in the voluntary carbon market.
 
 Mark Maloney, vice president of business development for CSG, said the last step was actually the trickiest. "The challenge is to create an emission factor for every gallon in the diesel market," he explained, so the reduction in carbon emissions from waste-based biodiesel can be calculated. CSG has proposed using data compiled by the EIA in its five reporting districts, which show the amount of renewable fuel being blended into the distillate pool at any given time. The carbon assessment for biodiesel from a specific facility can then be compared to the emission factor for the reporting district where the biodiesel is destined, and the reduction in carbon calculated. The system also satisfies another requirement for carbon trading-that the carbon credit be assigned to new, additional reductions in carbon emissions.
 
 In the CSG system, qualifying biodiesel producers must use waste feedstocks such as waste vegetable oil, animal fats or corn oil from ethanol distilleries. The company is also developing a protocol for producers using virgin oils, if they can verify the oilseeds were grown on degraded or under-utilized land.
 
 CSG has worked with biodiesel producers to formulate the methodology, Maloney said, and anticipates helping producers walk through the data collection and validation steps. "The process requires quality data that will be audited by a third party," he explained. "We will have to identify the feedstock, the location, transportation method, and so forth." The company estimates the smallest capacity facility where it will make sense to generate carbon credits is a 1 MMgy plant, as long as the necessary records are being kept. 
 

 The initial analyses using the CSG methodology indicate a biodiesel producer will be able to generate total carbon reductions roughly equivalent to one metric ton of carbon for every 1 percent of capacity. Credits are generated over 10 years from the start of production, or until there is an increase in plant capacity. Since carbon credits can only be used once, CSG also anticipates helping biodiesel producers create a multi-year strategy to manage credits, anticipating value is likely to rise over the next several years. Current voluntary markets are valuing a ton of carbon reduction at $5 to $7, which CSG analysts estimate would amount to roughly 4.5 cents per gallon of biodiesel.
 
 Generating an approved carbon credit is only half of the process though, since a carbon credit has no value unless it can be sold. CSG has experience working with companies and utilities selling carbon credits for their renewable power generation, and it expects many of the same investment firms and banks, as well as power utilities and other regulated carbon emitters, to be attracted to biodiesel carbon credits when anticipated regulations become law.
 
 CSG's plan to assign carbon credits to waste-based biodiesel production has been through a round of peer reviews, which will be repeated for a revised methodology reflecting recent changes of the Clean Development Mechanism created under the Kyoto Protocol as the process to develop and approve carbon projects. The CDM framework was used by CSG in developing its methodology for voluntary U.S. carbon markets. The initial peer review affirmed the validity of the methodology, Maloney said, and he expects the required validations by two third-party organizations to be completed between April and June.
 
 The CSG team has experience with a wide range of environmental assets including carbon credits, renewable identification numbers and renewable energy certificates, as well as brokering biofuels and glycerin. The consulting arm of CSG has helped its customers understand the implications and compliance requirements for a number of energy-related policies, including renewable fuel standards, state renewable portfolio standards and state and federal cap-and-trade schemes.

CSG devises method to  capture biodiesel carbon value

Biodiesel demand will continue to grow globally, with the Asia-Pacific and Latin American regions increasing their participation in global production and markets, according to Tammy Klein, executive director of global biofuels services for Hart Energy Consulting. "The driver for biofuels usage is not limited to the United States and Europe," she said in a presentation on the opening day of the Canadian Renewable Fuels Summit held Dec. 1 and 2 in Vancouver, British Columbia.
 
 Thirty countries are implementing biofuels targets in 2010 alone, she said. Many of them are in the developing world and are encouraging biofuels as a means to build energy security and improve rural economies, she said. 
 
 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," Klein added. Current global biodiesel capacity is already large enough to supply the demand of the 10 billion gallons per year projected for 2015. 
 
 At present, 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 to higher blends and Indonesia considering B10. In 2009, developing nations 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, Klein added. African nations are banking on 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 regional biodiesel demand. 
 
 Brazil is likely to produce biodiesel to satisfy its internal markets and continue to raise blending limits to absorb capacity. Argentina is expected to expand biodiesel exports, looking to supply Europe. 
 
 Europe is likely to maintain its standing as the largest consumer of biodiesel with a 44 percent share of the global market by 2015. Asia-Pacific will be close behind with a projected 39 percent share. 

 
 Europe is expected to see the greatest penetration of biodiesel into the domestic 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, Klein projected. 
 
 She urged the group of Canadian Renewable Fuels Association members to be proactive about involvement in policy development, and in the creation and development of sustainability standards, not only through dialogue with nongovernmental organizations but also by engaging with governments and organizations such as 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, Klein reported, "the change in tenor was astonishing" from the European Commission 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." Klein added that if a WTO suit successfully challenges Europe's sustainable biofuels policy, it could also impact U.S. policy.

Tammy Klein fields questions after her presentation on the global biofuels outlook at the Canadian Renewable Fuels Summit in Vancouver this December. PHOTO: SUSANNE RETKA SCHILL

1927-1294331975.jpg

Global biodiesel demand to double in 5 years

Biodiesel has become a major product for the palm oil sector in Asia. This business has been at the center of an international controversy involving tropical deforestation, agricultural competition and the Copenhagen Climate Summit.
 
 Tension between industrialized and developing countries certainly influenced negotiations in Copenhagen. One issue involved a plan called Reducing Emissions from Deforestation and Degradation in developing countries that would compensate for certain measures instituted by the Kyoto Protocol, which is set to expire in 2012. This program would essentially curb palm plantation expansion in Malaysia and Indonesia, but both countries summarily rejected it for various reasons.
 
 "Palm oil is 5 percent of the area planted and accounts for 30 percent of oil production volumes in the world," said W.H. Leong of Carotech Inc., working out of the Malaysian company's U.S. satellite office. "Rapeseed (canola) accounts for 13 percent of the planted area, and only 16 percent of the total production volume. An oil palm is also a perennial plant, whereas most other major oilseeds are annuals that have to be replanted every year."
 
 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. Transparency and accounting directives that track the biodiesel supply chain are very important to Greenpeace and its position on an international climate change treaty. Palm oil, because of its association with deforestation, could actually increase life-cycle carbon emissions compared to petroleum, said Greenpeace's Rolf Skar. 
 
 "We don't have a one-size-fits-all stance when it comes to biofuels," Skar said. "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 that we see that."
 
 The ways in which the EU, U.S. and other "wealthy" nations help developing countries such as Indonesia and China finance their carbon reduction strategies could include biodiesel technologies. "Greentech transfer is a major component of the negotiations right now," Skar said. "[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."
 

 Big news from the summit 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."
 
 Other political organizations have said 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 said. "These are big companies trying to hide their destructive practices 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."
 
 Leong reiterated throughout a recent conversation with Biodiesel Magazine that Malaysia "is not Indonesia and should not be characterized as Indonesia," and that the palm oil plantations there are more than 25 years old, not new. "All of the rest of the Malaysian forest has been set aside as national parks and reserve," Leong said. "So there is no more land to expand, and the palm plantations are on traditional agricultural lands." Carotech also reported that the palm oil industry employs more than 500,000 people in Malaysia, and is essential to reducing poverty there. 
 
 In addition to programs meant to curb palm oil expansion at the expense of rain forests, several items were 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 based in Canada. 
 
 The GRFA recently cited a report prepared by (S&T)2 Consultants Inc. and F.O. Lichts, which said that "with respect to biodiesel, forecast global production of 16.4 billion liters (4.3 billion gallons) will reduce greenhouse gas (GHG) emissions by 35.9 million tons." 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 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.
 
 Other highlights of the study, "GHG Emission Reductions from World Biofuel Production and Use," were that global manufacturing of biofuels surpassed 100 billion liters in 2009, which is displacing 1.15 million barrels (48.3 million gallons) of crude oil per day and 215 million tons of GHG emissions regularly. Malaysia and Indonesia are not members of the GRFA.

Denmark's Prime Minister Lars Rasmussen addresses delegates at Copenhagen COP 15. Denmark's government was accused of attempting to broker a secret deal on climate change among several of the world's most powerful nations. PHOTO: MINISTRY OF FOREIGN 

1928-1294331975.jpg

Palm oil expansion, biodiesel  factors in Copenhagen drama

As I thought of the topic for this month's "NBB In Sight" column, I couldn't help but think about how different things may-or may not-be by the time you are actually reading it. This is the February issue, which will be distributed at our annual conference. But now, at Christmas time, watching Congress adjourn before extending the tax credit, and watching EPA delay its RFS2 notice once again, it occurs to me that Nostradamus would have had a tough time writing an insightful and timely biodiesel article for February. I am tempted to do what Nostradamus did, and write the article in spooky-sounding, ambiguous quatrains that could apply to almost anything after the fact. 

 
 Because the annual conference is such a central event for the biodiesel industry to come together to network, plan, learn and do business, the February magazine article is especially important. In retrospect, it would have been a more impressive demonstration of clairvoyance if, at last year's conference in San Francisco, we would have distributed 2009 Calendars from Gary Larson's Far Side "Trouble Brewing" series. My favorite was the one of Ed's Dingo Farm located next door to Doreen's Nursery-and the one of the depiction of cavemen tying a brave volunteer to a round boulder atop a hill, with the caption, "Early experiments in transportation."
 
 At the conference in San Francisco last year, I laid out the case for why I believed that the RFS2, specifically the treatment of indirect land use change (ILUC) analysis, would be one of the most important factors impacting the biodiesel market moving forward. At that time and continuing today, most of the "research" being published on ILUC was about as scientific as interpreting Nostradamus' quatrains. Based on the assumptions you use, you can make it say whatever you want. And biofuel opponents were shamelessly using the most unreasonable and unscientific assumptions to deliberately disadvantage biodiesel. 
 
 NBB invested significant resources to develop the real science and data necessary to introduce reason into the discussion. Based on that effort, 2010 will see an implementation of RFS2. It is our hope and expectation that this will translate to a program that is reasonable and workable for the biodiesel industry, one that results in the required volumes without requiring overly burdensome and costly compliance measures. If it does, I will make this bold prediction: implementation of RFS2 will have the single most significant market impact for calendar year 2010. 
 
 A longer term federal incentive and restructuring of the biodiesel tax credit will remain NBB's top legislative priority, and it will be a cornerstone of our public policy platform for years to come. The tax credit is, and must remain, the primary market driver for the biodiesel industry. RFS2 is intended to provide a backstop or safety net, to offer stability to this fragile, emerging industry from what is otherwise violent volatility. 2008, with its 700 million gallons of production, was a good example of how the tax credit was highly effective as a demand driver for the industry-without an RFS2 in place. The year 2009, however, with crude prices dropping by half and biodiesel volumes dropping below 500 million gallons, was a good example of why we need both the tax credit and RFS2. The tax credit is the market driver and the RFS2 is the safety net. This platform worked well for the ethanol industry under the first RFS.
 
 My prediction that RFS2 will be the biggest market influencer in 2010 is based on the fact that we can expect 2010 market conditions in the energy sector to be similar to those in 2009. Many of the same economic fundamentals still exist. Therefore, the RFS2 will be necessary to stabilize those conditions in 2010. The transition rules call for 2009 and 2010 volumes to be combined for a total obligation of 1.15 billion renewable identification number (RIN) credits to be acquired by December. When estimating valid RINs already generated and available in 2009, carry-over allowances, and other variables, this creates a requirement for 2010 somewhere between 700 and 800 million gallons. This estimate would put the industry back in the range of or above 2008 production levels.
 
 While NBB continues to work on behalf of its members to see that RFS2 is more meaningful and less burdensome, the program is complicated. For those wishing to participate in opportunities arising from RFS2, it is imperative that they understand the details of the program and how the markets will respond to it. That is why we have placed an emphasis on the RFS2 at our conference in Grapevine, Texas. We will have experts from the petroleum industry discussing their plans to implement the standard, including infrastructure investments, intake, offtake, and RIN management. We'll hear from the U.S. EPA directly on specific elements of the program. And we'll hear from other leading experts in different areas of the biodiesel spectrum.
 These observations are based on my best judgment and analysis of how 2010 is likely to play out. However, I must say that I claim no powers of clairvoyance, and virtually anything can happen. So just for fun, I thought I would turn to Nostradamus himself, who, of course, did claim such powers. What I found was inspiring. In Century X, Quatrain 15, Nostradamus made the following shocking prediction: 
 
 
 "Father duke old in years and choked by thirst,
 On his last day his don denying him the jug:

 Into the well plunged alive he will come up dead,
 Senate to the thread death long and light."
 
 Clearly Nostradamus was describing the state of the biodiesel industry in 2009, having been "choked" by a series of challenges only to see Congress deny the tax credit or the "jug." In line three, he describes how this event will cause many to go out of business, before predicting a breakthrough of "light" in the Senate for those hanging on by a thread. Any reasonable reader would see how Nostradamus was calling to us through the centuries with razor-sharp accuracy. On the other hand, this quatrain was also used to assert that Nostradamus predicted McCain over Obama in the 2008 elections.

1929-1294331975.jpg

2010: The Year of the RFS

Miners have several ways of knowing whether the air they breathe hundreds of feet below ground is cleaner. Mine companies Rogers Group and Hutchinson Salt Co. both have extensive testing that shows biodiesel cuts emissions in their mines. Employees have their own proof: less black soot in their handkerchiefs when they blow their noses. 
 
 The Mine Safety Health Administration recently added even more verification. MSHA published a 206-page report that updates the mining community on biodiesel's continued positive effects underground. After testing multiple biodiesel blends, MSHA concluded that biodiesel reduces emissions-especially when combined with the use of aftertreatment devices on diesel engines. "The result is a cleaner and healthier working environment for miners," MSHA states.
 
 Hutchinson Salt was the first mine of any kind to use B99. Since 2003, the company has used between 17,000 and 30,000 gallons of B99 a year, depending on the demand for salt. 
 
 Its employees noted cleaner air in the mines within days after the switch to biodiesel. B99 powers all its underground diesel equipment, ranging from loaders to diesel pickups to tractors. Max Liby, vice president of manufacturing, says they have seen no reduction in performance even when machines run 20 consecutive hours. 
 
 In Kentucky, Rogers Group has three years of cleaner air with B99 at below sea-level aggregate mines. The company uses B50 at another mine that has more natural air flow. Routine maintenance found their diesel equipment engines are much cleaner. 
 "We at Rogers Group constantly look for opportunities to create a safe work environment for our employees and to minimize our effect on the environment," says Darin Matson, vice president for aggregate operations. "Biodiesel emits fewer diesel particulates than conventional fuels, and when used in the underground mining operations, that translates to a safer work environment for our employees."
 
 To help promote biodiesel's benefits underground, NBB's communications team identified mines using biodiesel, and worked to help spread the news about their success stories.

NBB helps promote biodiesel's benefits underground

Biodiesel leaders in Texas were pleased to host this year's conference. 

 
 "We are very proud to host the National Biodiesel Conference in the Dallas-Fort Worth area," said Mindy Mize, a Clean Cities co-coordinator for DFW. Clean Cities is a U.S. DOE program targeted at petroleum reduction through the use of alternative fuels. "We are home to a biodiesel plant and many biodiesel users, including the cities of Dallas, Irving and Fort Worth, as well as Denton Public Schools and more," Mize said. "All of them have a great story to tell and help make our area a national leader in biodiesel."
 
 In 2011, the role of conference host will be passed a few states west to Arizona. 
 
 The four-day event will be held at the Phoenix Convention Center and Venues, from Feb. 6 to 9. The Wyndham Phoenix and Hyatt Regency Phoenix will provide easy access to the conference and local activities. 
 
 Located in the heart of the Sonoran Desert, widely considered the most ecologically diverse desert in the world, Phoenix averages more than 310 sunny days per year. With more than 200 golf courses, a wide array of cultural attractions and countless opportunities for recreation, Phoenix offers a great destination city for conference goers. We hope to see you there next year.

Sunny skies of Phoenix will welcome biodiesel stakeholders to the 2011 conference.

1930-1294331976.jpg

2011 Biodiesel Conference & Expo heads west to Phoenix

Regulations and environmental compliance parameters are being tightened, public perception of industrial manufacturing's impact on the environment is heightened and concerns are mounting over the quality and quantity of our water supply. As a result, zero liquid discharge (ZLD) systems have become more prevalent. ZLD is a term used to describe the complete elimination of liquid discharge from a manufacturing process. More companies and industries have to treat or eliminate waste streams to a much higher standard than ever before. There are several approaches to solving this problem, some of which can be integrated into existing processes. Thorough evaluation of the impact of feasibility, cost-both capital and operational-and complexity are very important before selecting a treatment strategy. This paper explores various traditional ZLD options, as well as some alternative approaches currently in use. 
 
 The goal of a well-designed ZLD system is to minimize the volume of liquid waste that requires treatment, while also producing a clean stream suitable for use elsewhere in the plant processes. Typical sources for waste streams in an industrial setting include cooling tower blow down, reverse osmosis (RO) concentrate, multimedia filter backwash and spent ion exchange (IEX) softener regenerant. The key to reducing overall wastewater flow is to select and/or optimize the equipment in order to optimize the flow stream quality generated by the equipment.
 
 Cooling tower blow down volumes can be greatly minimized with the use of high-quality makeup water. This can be achieved by treating the makeup water for cycle-limiting ions such as hardness and silica. RO concentrate volumes can be minimized by integrating high efficiency systems to condition the water upstream of the RO units, such as softening, alkalinity removal and pH adjustments. A typical RO system rejects roughly 25 to 50 percent of the water it treats as waste; while a high efficiency system only has about 5 percent water waste. Filter backwash waste can be minimized by integrating backwash methods incorporating air wash scouring or simultaneous air and water techniques. The collected backwash water can be captured, settled and recycled, while the settled solids are collected in a filter press and disposed of. IEX backwash and regenerant waste can be recycled and reused.
 
 A common ZLD approach is to concentrate (evaporate) the waste water and then dispose of it as a liquid brine, or further crystallize the brine to a solid. A typical evaporator uses tube-style heat exchangers. The evaporated water (distillate) is recovered and recycled while the brine is continually concentrated to a higher solids concentration. 

 
 Concentrated brine is disposed of in a variety of ways, such as sending it to a publicly owned treatment works, using evaporation ponds in areas with net positive evaporative climates (evaporation exceeds precipitation), or by treatment in a crystallizing system, such as a circulating-magma crystallizer or a spray dryer. Crystallized solids can be landfilled or applied to land, depending upon the crystal characteristics.
 
 In April 2009, U.S. Water Services completed a complex water treatment system in Galva, Ill., combining high efficiency RO with evaporation/crystallization technology for the first time ever in an ethanol facility, in order to achieve ZLD. Due to environmental restrictions, applications such as these were necessary for the plant to operate. This particular facility integrated four major processes for the water to travel through. The first process is dual softening, consisting of a strong acid cation cycle and a weak acid cation. The second process is decarbonation, which greatly reduces carbon dioxide. A high efficiency RO unit was put in place as part of the third process, enabling water recoveries of 95 to 97 percent to be achieved, thus greatly reducing discharge volumes. The last process is evaporation and crystallization, where ZLD results can be achieved by evaporating down the waste stream volume by 80 to 90 percent. The remainder is then crystallized to a landfillable solid-in this case a salt cake-which is not hazardous to the environment.
 
 Some industrial water consumers have installed cold lime softening (CLS) systems to precondition the water used for plant processes. CLS is a technology that has been around for decades. It is used to remove minerals, principally calcium, magnesium, iron and silica, from water fed to the cooling towers and RO systems, subsequently increasing efficiency and reducing waste volume. 
 
 In 2006, the first dry grind ethanol plant in the country to be designed and operated with no liquid discharge to the environment came on line in California. The process that allows for this environmentally friendly system was developed by U.S. Water Services. 
 
 Listed as an environmentally sensitive area, California's San Joaquin Valley does not allow any industrial aqueous discharge. In order to build the plant in this prime agricultural location, a process for reusing the discharge from the cooling tower, pretreatment equipment and process streams needed to be developed. 
 
 After carefully analyzing the local water quality, as well as the plant process demands, U.S. Water Services designed a process using CLS to precipitate many of the minerals from the water. The minerals, which are rich in calcium, are then added to the dried distillers grains with solubles, supplementing the nutrient value of this valuable animal feed byproduct of ethanol production.
 
 As environmental, political and public health entities place more focus on waste water management, ZLD strategies are more often being evaluated for feasibility in industrial facilities. The ZLD approach taken, however, greatly depends on the quality of water available for use. Precipitation, evaporation, crystallization, recycling and other creative approaches, such as CLS, are all viable approaches to this end. 
 
 While most plants don't have the restriction of zero discharge from their facilities, CLS may still be a useful application. Depending on the specific permit regulations that a plant faces, it's often possible to significantly reduce liquid discharge volumes without actually eliminating it. In addition, many state permitting agencies see CLS as a means to pollutant control, as it is one of the few available processes that actually removes minerals from the water rather than simply discharging them in a concentrated waste stream as RO and IEX systems do. 
 

 The other important feature of CLS systems is that they allow the plant management much greater flexibility in the sources of water that can be utilized. For example, an ethanol plant in Minnesota needed to reduce the impact on the local aquifer, so it contracted with U.S. Water Services to design a CLS system that could treat river water. The plant has benefited in a number of ways from this project. Water usage for its cooling water and process systems dropped by more than 30 percent (roughly 45 MMgy) as a result of the improved water quality. More importantly, the water treatment system design allows it to utilize river water, well water and even water from a storm drainage pond, depending on which makes the most sense for the situation.
 
 Through the use of new treatment technologies, and by using old technologies in novel ways, a significant impact can be made on the amount and quality of water that a process facility uses and discharges.
 
 Amelia Jordan is a design engineer with U.S. Water Services. Reach her at (763) 553-0379 or <a href="mailto:ajordan@uswaterservices.com">ajordan@uswaterservices.com</a>.

1955-1294331987.jpg

Cold lime softening units, such as this one designed by U.S. Water Services, are designed to precipitate minerals from the water. PHOTO: U.S. Water Services

1956-1294331987.jpg

U.S. Water Services built the cold lime softening system, shown above, for the Pacific Ethanol plant in Madera, Calif. PHOTO: U.S. Water Services

1957-1294331987.jpg

This type of cold lime softening system allows process facilities much greater flexibility in sourcing their water supply. PHOTO: U.S. Water Services

1958-1294331988.jpg

Process facilities can use zero liquid discharge systems to effectively address tightening environmental regulations and the world's dwindling fresh water supplies.

Zero Liquid Discharge

Earlier this year, the European Biodiesel Board reported that about half of EU biodiesel capacity is idle. The National Biodiesel Board gave a similarly discouraging outlook-production had fallen to 2006 levels. While much of this can be attributed to changes in regulations, volatile feedstock prices and a drop in demand for fuel, it is not all doom and gloom. Certain aspects of a biodiesel plant can be optimized to achieve higher yields and greater feedstock flexibility.
 
 The design of a biodiesel production facility is based on many parameters, including feedstock quality, reaction technology-coping with specific challenges such as very high free fatty acid (FFA) feedstock-and the quality of the fuel and coproducts.
 To increase the capacity of a biodiesel plant, the bottlenecks first need to be identified. These can result from inadequate design of process and/or equipment, installation of low-cost equipment, the changing of production parameters or operation modes, varying feedstock properties, and problems in fulfilling the requested biodiesel standards and/or purchasing requirements.
 
 Using the wrong equipment, control problems and inadequate control systems are the most likely causes for unexpected halts in production, which lead to downtimes and a reduction in capacity.
 
 
 Higher Yields

 
 The plant yield is defined as the ratio between the amount of on-spec biodiesel produced and the feedstock input stream, with both based on mass. The input stream includes all fatty materials (tri)glycerols, and FFAs, convertible into biodiesel.
 Yield losses are crucial for plant economics. Just 1 percent less output causes losses of more than $1.1 million a year, based on 100,000 tons a year, or 30 MMgy at a biodiesel selling price of $3.77 per gallon (including the tax credit). 
 
 Basic biodiesel technologies can only convert feedstock with an FFA content of less than 0.1 percent, but those premium feedstocks are only available at a high price. Valuable FFAs are then lost during the upfront refining process, or neutralization, of the crude oil.
 
 Critical yield losses can also occur due to the poor design of the transesterification unit as well as the subsequent purification steps. Missing internal recycling of all fatty material sidestreams is the main cause of this.
 
 The practical integration of FFA conversion and internal recycling for maximum yield needs to be carefully designed, taking into account the effect on other process units (e.g., existing materials of pipes and vessels), as well as the influence on overall plant efficiency.
 
 
 Improving Product Quality
 
 Recent changes in major biodiesel standards, such as ASTM D6751 and EN 14214, provide an added challenge for biodiesel producers.
 
 These include a reduction of the phosphorous content to 4 parts per million (ppm), the introduction of new parameters such as the cold soak filtration test to reduce the filter blocking tendency of some contaminant-laden biodiesel, and meeting low sulfur levels using such feedstocks as tallow.

 
 "Big Oil" and the petroleum industry are demanding an even higher quality product to meet their blending obligations. For example, they are typically specifying a maximum content of monoglycerides (0.3 percent or even less) and a water content of less than 300 ppm.
 
 
 Byproducts
 
 Glycerin, the main byproduct from a biodiesel production facility, is often treated as a waste stream, or as a low value byproduct, but it can increase the profitability of a plant when it is upgraded to pharmaceutical grade, for example.
 
 Other valuable byproducts include fatty materials: all soaps from the transesterification reaction can be split and transferred into methyl esters to gain a 100 percent yield, a process patented by BDI-BioDiesel International. Excess methanol from the reaction process can be distilled and reused, water can be separated and purified for recycling in order to minimize fresh water consumption, and when using potassium for the transesterification process, the residues can be transferred into a valuable fertilizer.
 
 
 Feedstock Diversification
 
 Producers can cut costs dramatically by using technology that can process lower cost feedstock such as waste cooking oil or tallow, but the quality of the end product cannot be compromised. Alternative types of feedstock demand a completely different feedstock pretreatment and methyl ester purification technology when compared to traditional vegetable oil-based biodiesel plants. 
 

 Therefore, knowledge of each individual alternative feedstock, as well as extensive experience about the interaction within the process-in particular the effects on transesterification, purification and side-product preparation units-is essential for a successful retrofit.
 
 Distillation, for example, can be used to fulfill the ASTM cold soak filtration test. Distillation can easily be integrated in an existing plant, but it cannot cure all deficits caused by improper design of the previous process steps.
 Additionally, producers should recycle the distillation sidestreams into the process in order to achieve the best yields and plant economics.
 
 
 Reducing Materials, Energy and Waste
 
 Choosing the right purification technology is crucial. Many water-free methyl ester purification technologies have the disadvantage of very high operating costs combined with a high amount of solid waste. Waterless purification may also reduce the biodiesel quality when using yellow grease or tallow.
 
 Low-value side products are often destroyed as waste, which incurs an extra cost. Upgrading these streams by extracting valuable components offers a double benefit: saving operating material consumption and avoiding waste. Therefore, a modern process design will close operating loops by recycling methanol, FFAs (split soaps) and water.
 
 Where waste streams are unavoidable, anaerobic treatment of various residues, organic wastes and sidestreams substantially increases the plant's efficiency.
 
 Energy consumption usually has the least impact on the profitability of the biodiesel production process. However, when referring to glycerin treatment or the distillation processes for methyl ester production, an economical energy-saving design is essential.
 

 Plant Automation
 
 Operating all the plant's devices in ideal conditions requires electronic support. Similarly to motor racing, the perfect car, a powerful engine and the best driver have to be fine-tuned to each other using mathematical models, simulations and telemetric systems.
 
 Advanced process control (APC) is a model-based, second-layer control and online process optimization system. Every minute, it calculates the optimized settings for single devices to meet the final goal-quality biodiesel at the highest productivity level but the lowest cost.
 
 The APC solution works integrated in the distributed control system and the guidelines of this process optimizer are executed by established proportional–integral–derivative controllers.
 
 The technology can help optimize single units such as recipe handling, demethanolising, biodiesel distillation and glycerin separation.
 
 Missing online quality measurements (FFA content, neutralization number, etc.) are substituted via soft sensors; a model-based online calculation of actual quality values. The process models can also be used for offline process simulations, especially for operator training.
 
 APC can be added to a plant with very little effort or investment. The installation does not impact daily production and the results can guarantee a payback within a few months.
 
 
 Is it All Worthwhile?

 
 Retrofitting an existing plant is only worthwhile if the limitations of the current operations are identified through a careful and detailed analysis. If deemed suitable, a retrofit can take place in months, rather than years, leading to significant profit increases-a necessity in today's low margin, highly competitive biodiesel industry.
 
 Hermann Stockinger is sales director at BDI-Bio-Diesel International. Reach him at +43 316 4009 100 or <a href="mailto:sales@bdi-biodiesel.com">sales@bdi-biodiesel.com</a>. Klaus Ruhmer is North American business development manager at BDI-BioDiesel International. Reach him at (623) 570-8186 or <a href="mailto:klaus.ruhmer@bdi-biodiesel.com">klaus.ruhmer@bdi-biodiesel.com</a>.

Extensive research and development is required to keep up with the latest biodiesel feedstock challenges. PHOTO: BDI-BioDiesel International

1959-1294331988.jpg

BDI-BioDiesel International, which headquarters in Grambach/Graz, Austria, has been in the biodiesel business since 1991. PHOTO: BDI-BioDiesel International

1960-1294331989.jpg

Distillation is an efficient way to meet current and future quality requirements. PHOTO: BDI-BioDiesel International

1961-1294331989.jpg

For maximum process efficiency, quality equipment and components must be used during retrofit projects. PHOTO: BDI-BioDiesel International 

1962-1294331990.jpg

Finances willing, retrofitting biodiesel plants with the latest technology is one route to squeezing more out of a company's returns.

Returning to Biodiesel Profitability

NBB successfully captured media attention, including that of the Wall Street Journal, New York Times online and Associated Press, with the release of an economic study on the negative impact to the biodiesel industry from allowing the tax credit to lapse. Economic analyst John M. Urbanchuk concluded that without the biodiesel tax incentive, there will be: 
 
 -a loss of jobs and income 
 -increased demand for petroleum diesel 
 -a degradation of energy security 
 -decreased demand for soybean oil and lower soybean prices, leading to a negative impact on farm income 

 -stranded investment as biodiesel capacity is idled, and lost tax revenue for state and local governments 
 
 "Since it was enacted in 2004, the biodiesel tax incentive has allowed the nation to reap the economic, energy security and environmental benefits associated with commercial-scale production and use of biodiesel," stated Manning Feraci, NBB vice president of federal affairs. "Allowing the credit to lapse will compound the already daunting challenges facing the industry and will cost the nation another 23,000 jobs in addition to the 29,000 jobs that were shed in 2009."
 
 The study helped provide objective analysis to verify the many benefits of a strong and vibrant biodiesel industry. Reporters from across the nation continue to cite the data and conclusions as they cover elected officials' action in the nation's capital, and the local impact. 
 
 To read the full report by Urbanchuk, visit the NBB's Tax Incentive Action Center on the Web site.

Wall Street Journal, others feature NBB study on need to extend tax credit

Visit the National Biodiesel Foundation at the National Biodiesel Conference & Expo in Grapevine, Texas, in February, where the foundation will host its annual silent auction. The goal of the auction is to fund projects of importance to the biodiesel industry. In 2010, the NBF will pursue projects in sustainability awareness, feedstock development and infrastructure. 
 
 The fundraiser will auction biodiesel fuel, subscriptions to popular trade magazines, 2011 National Biodiesel Conference package, tickets to the 2011 National Biodiesel Conference Super Bowl Party, resources for biodiesel producers, private boat tours, jewelry and more. The Foundation is still collecting auction items, so if you would like to make a tax deductible donation of cash, goods, or services, please contact Susan Susanke at susan@biodieselfoundation.org.
 
 During the three years the Foundation has been active, it has hosted fleet education and fuel quality workshops in conjunction with the U.S. DOE's Clean Cities Program and has been awarded grants for biodiesel infrastructure and education projects that promote biodiesel's sustainability and mechanic education. It also received funds to promote BioHeat in the state of Massachusetts. The Foundation is a recipient of a Tiger Team award, which enables it to provide technical assistance to Clean Cities coordinators nationwide.
 
 The NBF, a (501(c)(3)), was established to accomplish outreach, education, research and demonstration activities for the advancement of biodiesel and its coproducts to improve rural economic development, national security, air quality and the environment. To learn more about the NBF, visit its Web site at www.biodieselfoundation.org.

1931-1294331976.jpg

National Biodiesel Foundation to host silent auction

NBB members play a major role in defining the long-term objectives and programs for their trade association. Members recently completed an online survey to provide input and identify priorities for the draft 2011 NBB Program Plan. The comprehensive, directional plan for the biodiesel industry will be the number one order of business at the membership meeting on Tuesday, Feb. 9, at the National Biodiesel Conference & Expo in Grapevine, Texas. 
 

 Developing the NBB Program Plan takes shape over the course of several months. Through technical, marketing and regulatory meetings, a member-led process identifies opportunities, as well as issues facing the industry. In addition to committee meetings, direct member input, and a survey, the planning process also includes a Webinar presentation and member review. This allows NBB to prepare a clear direction to ensure the trade association continues to meet members' needs. 
 
 "In order to march as an integrated army and charge past the battles facing us, we must have a comprehensive plan," said NBB Vice Chair Gary Haer. "The NBB Program Plan encompasses technical, marketing, legislative and regulatory priorities of the members of this association."

NBB members completed a survey as part of the member-led process to identify opportunities and issues facing the industry.

1932-1294331977.jpg

NBB continues planning process at Biodiesel Conference & Expo

BiofuelBox, headquartered in San Jose, Calif., is the first biodiesel company to be selected for an innovation award from the World Economic Forum, a prestigious and historic nongovernmental organization that holds its late January meeting each year in Davos, Switzerland. BiofuelBox manufactures skid-mounted 1 MMgy processing units that turn wastewater sludge into biodiesel and can be deployed virtually anywhere. By working with such an impure feedstock, the company managed to stand out to the WEC, said Rick Reddy, the company's CEO. 
 
 The company behind Magnesol dry wash, The Dallas Group of America Inc., now offers a line of adsorbents called D-Sol to help biodiesel producers purify their fuel and pass the cold soak filtration test (CSFT). D-Sol removes sterol glucosides and other contaminants that can cause fuel to fail the CSFT, and can be used during regular dry washing or as a post-treatment after water washing or ion exchange purification. 
 
 The Iowa Power Fund Board recently approved a $3.9 million grant to help transform Central Iowa Energy LLC, a 30 MMgy biodiesel plant in Newton, Iowa, managed by Renewable Energy Group Inc., into an integrated biorefinery for production of specialty chemicals and renewable jet fuel from oils and fats. The demonstration retrofit project will be based on Elevance Renewable Sciences Inc.'s Nobel Prize-winning technology, called olefin metathesis. 
 
 Biodiesel consulting firm Lee Enterprises of Little Rock, Ark., recently welcomed Tess Castillo to its team of consultants. Firm owner Wayne Lee said Castillo will fill a much-needed role matching plant managers with plants seeking experienced personnel. Castillo speaks fluent Spanish, and with clients all over the world, that's a benefit for his consulting firm, Lee said. 
 
 OriginOil Inc. signed a memorandum of understanding with Japan's Research Institute of Tsukuba Bio-Tech to develop technologies for converting algae to jet fuel. RITB was recently approved for two years of research and development funding based on its proposal to the Japan Science and Technology Agency. RITB is headed by Tsukuba University professor emeritus and algae researcher Takaaki Maekawa who said he looked forward to incorporating OriginOil technology and resources into the project, which is focused on algae-to-oil production, aircraft fuel production and other industry applications. California-based OriginOil has made several announcements this past year regarding progress in developing algae harvesting and extraction technology. 
 
 A Dec. 2 explosion at Imperium Renewables Grays Harbor shut down the plant that had only recently started producing after being idled for several months. 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 or fire. The force of the rupture scattered aluminum and insulation across the Imperium Grays Harbor property and damaged nearby pipes and two adjacent tanks. The processing tank and other tanks located in a fully contained area were not damaged. In mid January, clean up had been completed but the plant was not back in production.
 
 Metro Biofuels hosted a one-day event in early December on the site of its 110 MMgy biodiesel plant under construction in Brooklyn, N.Y. "Fueling a Sustainable Future" included USDA and local officials discussing the health and environmental benefits of biodiesel and Bioheat, the opportunities for economic growth provided by a homegrown domestic biofuels sector and the future of various legislative efforts to promote or mandate biodiesel. Metro Biofuels is a subsidiary of Metro Energy, a family-owned fuel distributor in the New York metropolitan area. The biodiesel plant being built adjacent to the distribution terminal is expected to be online in the early half of 2010.
 

 Grabner Instruments has introduced a recently upgraded, portable IROX Diesel FTIR Analyzer to determine biodiesel content in diesel fuel. The IROX Diesel is a compact mid-FTIR spectrometer that measures the complete absorption spectrum to determine fuel composition and predict properties such as cetane number, total aromatics, polynuclear aromatics and density. The IROX Diesel is available in North America from Ametek Petrolab Co., a division of Ametek Inc. 
 
 Rentech Inc. and AltAir Fuels announced separate memorandums of understanding (MOU) on the same day involving nearly identical lists of airlines to which they will supply renewable jet fuel. Seattle-based AltAir fuels, a sister company to Targeted Growth Inc. and camelina developer Sustainable Oils Inc., is proposing a 100 MMgy plant to be built alongside the existing Tesoro oil refinery in Anacortes, Wash., using technology developed by UOP LLC, a Honeywell company. Rentech is proposing a 400 MMgy plant in Adams County, Miss., using Rentech-SilvaGas biomass gasification that converts multiple biomass feedstocks into syngas. Rentech technologies based on Fischer-Tropsch chemistry produce synthetic fuels, specialty waxes and chemicals. Final product upgrading is provided under an alliance with UOP. The Air Transport Association of America Inc. helped develop both nonbinding MOUs involving 16 airlines expressing an interest in negotiating future purchases. 
 
 Crown Iron Works Co. of Minneapolis has offered oil crushing and extraction technology for years but now has a different "route to reach the same end" by acquiring a similar system from Hamburg, Germany's Harburg Freudenburger. "This gives us a name and a reputation to reach more agricultural interests in Eastern Europe that might be much more familiar with Harburg than they are with Crown. This [acquisition] doesn't add a specific process to our portfolio of services but gives us more exposure to certain parts of the world," said Derek Masterson of Crown Iron Works. 
 
 W2 Energy Inc., headquartered in Guelph, Ontario, has been booked by the City of Laurel, Md., to convert municipal solid waste into synthetic diesel fuel and electricity after construction of a pilot plant. W2 Energy is deploying "a mobile plasma-assisted-gasifier" small enough to fit inside a 45 ft. trailer for this 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." 
 
 Southeastern Community College of Whiteville, N.C., will be using a mobile biodiesel processor built by Jerome, Arizona-based Verde Biofuel for a program to introduce farmers to biodiesel. The Verde processor presses raw seeds, extracting the oil, which it then cleans and processes. North Carolina is converting traditional tobacco acres to other crops and state interests are looking to educate farmers on biodiesel manufacturing specifics, anticipating increased oilseed production in coming years.

1933-1294331977.jpg

1934-1294331977.jpg

1935-1294331978.jpg

1936-1294331978.jpg

1937-1294331979.jpg

Business Briefs

Fiat's headquarters in Lingotto outside of Turin, Italy, is a flagship of world diesel production. Now the largest vehicle factory in Europe, original construction began in 1916, reaching completion in1922. From its halls and assembly lines have come many compression ignited innovations.
 
 The Multijet engine, which began production in 2009, is an example of Fiat's continued work with the diesel motor. "The new system-born of the evolution of the common rail principle-is the basis of the new second-generation Fiat engines: the small 1.3-liter, 16-valve Multijet, the sporty 1.9L Multijet 120- or 150-horsepower engines, and the powerful 1.4L Multijet 90-horsepower engine," Fiat literature says.
 
 Fiat's new partner, Chrysler, was the first major original equipment manufacturer (OEM) to warranty B20 in its heavy-duty Dodge Ram trucks, but similar moves from Fiat are not forthcoming even though the diesel engine is part of the company's often high-profile green publicity campaign. 
 
 Because Europe is a large producer of biodiesel and the most prolific manufacturer of diesel vehicles, it would seem reasonable to assume that there might be some exciting synergies to develop a solid market for the renewable fuel. Not so, says the European Biodiesel Board. "Peugeot clearly stated that their vehicles could use 20 percent to 30 percent blends, but technically they're still blocking increased blending requirements," says Raffaello Garofalo, general secretary for the EBB. 
 
 In general, the efforts of auto manufacturers to promote the use of biodiesel in Europe have been lackluster. "We've made great strides in increasing quality and normalization," Garofalo says. "Many of the [automakers] attempted to block efforts to increase the blend requirement in the EU from 5 percent to 7 percent."

 
 Higher blends need a special clearance from the OEM, but there are many cars on the road capable of running on B100-especially heavy trucks, says Jakob Seiler of the German Vehicle Manufacturers Association (VDA). "Due to latest diesel- technologies, B100 clearances will not be possible any more for future cars," Seiler says. "Some manufacturers in Europe are testing B30, but only within closed fleets."
 
 Some companies have publicly stated that they were making moves to accommodate use of higher biodiesel percentages. "Renault's commitment to biofuels, made by the company as part of Renault Commitment 2009, [projected that] all diesel engines sold in Europe by 2009 will be able to run on fuel blends containing 30 percent biofuel," the company said in December 2006. "Renault sees biofuels as one of the most efficient and economic ways of controlling CO2 emissions in the medium term, since it's easy to fit this technology on volume production models." 
 
 That never happened. "That's been over three years, and there's been nothing from Renault," Garofalo says. "What these companies claim, and the image they want to portray, is often very different than what they are doing-and they should be criticized." 
 
 
 New Offerings
 
 The 2010 Ford Focus ECOnetic gets more than 74 miles per gallon. "Power comes from Ford's 109 PS 1.6-liter Duratorq TDCi engine with standard coated diesel particulate filter," states Ford Motor Co. Also, this model features an "auto-start-stop" system that automatically shuts down the engine when the vehicle is idling to save fuel. 
 
 In addition to its diesel motor marketing efforts in Europe, Ford recently approved B20 for use in its Super Duty trucks in the U.S., but have not followed suit in Europe. Jennifer Moore of Ford tells Biodiesel Magazine that availability, feedstocks and government policies influenced Ford's geographical biofuels strategy, which was stronger in other parts of the world than in Europe. "They've done nothing like [approving B20] here," says Garofalo from the EBB's headquarters in Brussels. "It's very curious why they do this in other parts of the world and not here."
 
 Conversely, smaller Ford models with diesel engines are not offered in the U.S., causing consumer complaints. There have been more diesel models coming to the U.S. from Europe in recent years, but those still make up a relatively small percentage of the huge selection offered in the EU. 
 

 Opel Insignia, Europe's best selling mid-sized sedan built by GM Europe, is another example of a diesel model that is not offered stateside. This often has to do with laws, emissions regulations and other requirements that differ from country to country, even state to state. In Europe, "the brand has nearly doubled its share of the European high-volume mid-sized segment" in the first 10 months of 2009, states GM Europe, adding that the diesel models in the line burn just 5.2 liters (1.37 gallons) of fuel per 100 kilometers (around 62 miles). 
 
 It has been an exciting year for new diesels in Europe. In fourth quarter 2009, Peugeot launched its 1.6L HDi FAP diesel engine. "Between this new 1.6L HDi and its predecessor more than 50 percent of the parts have been entirely redesigned," the company reports. Earlier in the year, the company had introduced 2.0L and 3.0L engines out of anticipation of new emissions requirements and respect for the environment-but virtually nothing has been said about biodiesel. 
 
 Volvo's diesel offerings for 2010 include the new C30, which use just 3.8 liters of diesel per 100 km and emits less than 100 grams of carbon dioxide per km. Infrastructure could be a problem if the fuel requires separate systems. For Volvo cars and biodiesel, so far the only approval it has given for biodiesel use is for 7 percent low blending. 
 
 "Biodiesel is not yet a part of our CO2 reductions strategy simply because our knowledge is limited and there are not yet any commercially available high blends on the market," says Anders Karrberg, executive director of governmental affairs for Volvo. "We have tested 100 percent renewable synthetic diesel with good results, both for regulated and CO2 emissions. We are about to test a new blend of 20 percent renewable and 80 percent fossil diesel, which is about to be introduced to the Swedish market."
 
 
 HVO, Renewable Diesel
 
 "Biodiesel is standard in Germany, and [in the EU] we have a general blending of biodiesel of up to 7 percent," Seiler tells Biodiesel Magazine about VDA's official position on biodiesel. "Every [diesel engine] in Europe is capable of using so-called B7."
 In terms of production capacity, Germany is still a leading global biodiesel producer, and is the birthplace of the diesel engine, so it would seem that methyl ester makers and auto magnates would have some interesting partnerships there. But the industry is keeping its options open when it comes to committing to future fuel platforms. "The German automotive industry is promoting interesting alternatives to biodiesel," Seiler says. "One alternative that's already available in large amount is hydrogenated vegetable oil (HVO)," or renewable diesel.
 
 It seems that auto manufacturers are watching the developments in the renewable fuels sector and hedging their bets as to what technologies and fuel platforms they choose to invest in. "HVO, in terms of CO2 reduction, is as efficient as biodiesel, but can be blended in higher rates than biodiesel," Seiler says. "A 20 percent blending of HVO will be possible without the need to change the general fuel standards."
 

 HVO and synthetic diesel, which were mentioned by Volvo and VDA in their communications with Biodiesel Magazine, are associated with fuel production technologies other than transesterification. Companies such as Neste Oil of Finland, with its NexBTL renewable diesel brand, supply this kind of fuel. Surprisingly, Seiler says the best alternative fuel is not biodiesel, but biomass-to-liquid (BTL). "This fuel has outstanding quality and can be blended in any rate, and there is a lot of research, development and industrial projects to produce BTL in future times." 
 
 
 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>.

Fiat headquarters in Turin, Italy PHOTO: FIAT

1938-1294331979.jpg

The Fiat 500 is one of many sporty, small diesels produced by the Italian automaker for the European market. PHOTO: FIAT

1939-1294331980.jpg

Many diesel models made by U.S.-based auto companies, such as Ford's ECOnetic, are not offered in their home country. PHOTO: FORD MOTOR CO.

1940-1294331980.jpg

The Opel Insignia, manufactured by GM Europe, is the continent's best selling mid-sized sedan. PHOTO: GENERAL MOTORS CORP.

1941-1294331980.jpg

Volvo's diesel offerings for 2010 include the new C30, which uses just 3.8 liters of diesel per 100 kilometers and emits less than100 grams of carbon dioxide per kilometer. PHOTO: THE VOLVO GROUP

1942-1294331981.jpg

Auto manufacturers in Europe are committed to the diesel platform, touting their environmental programs and having abundant access to biodiesel, but they have been slow to support or incorporate methyl esters as an official part of their business models and carbon reduction schemes.

Europe's Diesel Portfolio

The Canadian renewable fuels industry enjoys exceptionally high public support. At the Canadian Renewable Fuels Summit, the Canadian Renewable Fuels Association President and CEO Gordon Quaiattini said this is because the industry delivers on its promises. "We're delivering the jobs and growth that Canadians so badly need," Quaiattini said. "We're delivering greenhouse gas (GHG) reductions that Canada requires. We're delivering for farm families looking to diversify. We're delivering for the forestry sector that sees renewable fuels as a new source of growth and vitality. And we're delivering for all those who worry about the security and abundance of clean and affordable transportation fuels." Quaiattini cited three recent reports supporting his claim in his state-of-the-industry address at the early December summit held in Vancouver, British Columbia.
 
 Quaiattini cited a life-cycle analysis (LCA) issued a week before the summit on Canadian renewable fuel production between April 2008 and March 2009. The LCA, conducted by Ontario-based Cheminfo Services Inc., using the GHGenious model, found Canadian biodiesel reduced GHG emissions by 99 percent. Three biodiesel plants totaling 94 MMly (about 25 MMgy) of production were analyzed, which represented 85 percent of the total Canadian biodiesel capacity active during the data reporting period. The plants were primarily using waste-based feedstocks. The study also found that ethanol reduced GHG emissions by 62 percent from participating plants representing 65 percent of the country's active ethanol capacity during the data reporting period. A second study released by CRFA on the opening day of the summit analyzed the economic benefits of a 150 MMly ethanol plant in Southwestern Ontario. Farmer-owned Integrated Grain Processors Cooperative created more than 1,000 jobs and a direct investment of $276 million while under construction, and an ongoing $50 million in economic spending annually, in addition to tax benefits at the municipal, provincial and federal levels. 
 
 Such results have earned impressive support for renewable fuels, as illustrated by a third study released by CRFA at the summit. A public opinion poll conducted by Praxicus Public Strategies showed 89 percent of Canadians believe renewable fuels are part of a move toward a low-carbon economy; 84 percent recognize renewable fuels boost economic activity and employment in rural communities; 82 percent believe any plan to tackle climate change should include renewable fuels to lower GHG emissions; and 85 percent of Canadians see renewable fuels as a source of value-added production and new, high-tech employment. Support for the renewable fuels standard that mandates ethanol and biodiesel use in the next couple of years was only slightly lower at 78 percent, while 86 percent of Canadians believe the country needs a long-term plan to boost domestic production. "I've worked in politics for more than 20 years," Quaiattini added, "and any politician would die for these numbers." 
 
 
 Politicians Voice Support
 
 Two government officials addressing the summit demonstrated that politicians understand Canada's public support for renewable fuels. Blair Lekstrom, British Columbia's minister of energy, mines and petroleum resources, voiced his strong support for Canadian biofuels in his welcoming remarks. "Anytime we work towards diversifying markets for our agricultural sector, it is a good thing," he said. The clean renewable fuels sector will create needed jobs, though he added he knows the challenges faced by industry. One ethanol project has been talked about since 1993 and still hasn't been built, although another canola biodiesel project is being actively considered. "We have the ability to be a renewable fuel powerhouse," Lekstrom said. 

 
 Lisa Raitt, the Canadian minister of natural resources, also expressed her support for biofuels in a videotaped presentation played at the summit. She pointed to the stakeholder roundtables her department has hosted this year as the government's $2.2 billion investment in a renewable fuels strategy is implemented. Of the 57 applicants to the ecoEnergy program, 23 agreements have been signed so far, she said, supporting existing Canadian producers and new projects in development. The Canadian renewable fuels standard takes effect in September 2010, mandating a 5 percent renewable content in gasoline, followed by a 2 percent renewable content in diesel and heating oil in 2012. In a panel discussing the political landscape in Ottawa, Scott Reid, a partner with Feschuk-Reid, referred to the government support-the mandates and $2 billion in financing-as "monster wins" with party platforms of both conservatives and liberals showing support for renewable fuels. "Your fundamental job is to remind and reinforce that [supporting renewable fuels] is good politics," he told the audience. Reid's fellow panelist, Tim Power, Summa Strategies, echoed Reid's remarks, adding that in the next election cycle "biofuels need to frame themselves in the economic discussion, rather than environmental." 
 
 
 Expansion Anticipated
 
 Biodiesel producers at the Canadian Renewable Fuels Summit were looking forward to new mandates over and above existing ones, such as Manitoba's B2 mandate that took effect a month prior to the event, British Columbia's B5 standard taking effect Jan. 1, and Alberta's B2 mandate taking effect July 1. The provincial mandates ramp up demand in advance of the federal B2 to take effect in 2012. In anticipation of increased demand, organizers of a proposed 50 MMly biodiesel plant near Chin, Alberta, were at the conference courting interest in the canola biodiesel project. Vancouver-based biodiesel marketer, Canadian Bioenergy Corp., is also considering a large canola biodiesel project, with a feasibility study nearing completion on a 256 MMly plant to be built as a joint venture alongside Archer Daniels Midland Co.'s canola crushing facility in Lloydminster, Alberta. "Canola is Canada's number one crop now," said Doug Hooper, CEO of Canadian Bioenergy. "We have a production surplus here, and the canola crush will double to 8 million tons in the next two years." There is a big difference between the biodiesel situation in Canada and the U.S., he added. "Our market is not in an overcapacity situation." Hooper pointed out the mandated volume coming into effect in the next couple of years will amount to 700 MMly, with the current Canadian biodiesel capacity at 120 MMly. Currently, Canadian biodiesel is mostly made from rendered materials. "We need oilseeds to kick in," said Todd Moser, vice president alternative fuels at Rothsay Biodiesel. "The first layer of biodiesel production was met with lower cost feedstocks, we're going to push that up to the next level with traditional oilseeds," Moser said. Rothsay Biodiesel, a division of Maple Leaf Foods Inc., operates a 35 MMly plant at Ville Ste. Catherine, Quebec, producing biodiesel from rendered fats. Canada's producers are expecting the mandates to help biodiesel penetrate the country's diesel market. "We have a very concentrated industry with a small handful of petroleum majors," Hooper explained. "They're very efficient, covering very long distances with few players." Getting policy tools and programs to build infrastructure has been critical for the industry, he added. "You can't break into monopolistic markets."
 
 
 Perspectives on the Decade Ahead 
 
 Hooper, the incoming CRFA chair, highlighted important points made during the summit in his closing remarks that also reflected on the state of the Canadian industry at the close of a decade. "This has been the coming of age decade for biofuels with capacity being built," he said. "We got the attention of government and held on to it." In the next 10 years, the energy sector will be transformed with emerging carbon policies presenting opportunities and challenges that will introduce new trade disputes regarding different views on proper carbon accounting, he suggested. "Green protectionism is going to be normal." It is notable that the best organized groups at the recent climate talks in Copenhagen were the nongovernmental organizations, he added, saying Canadian renewable fuel producers need to open dialogues with NGOs. "We need to earn and gain their trust and support."
 
 Avrim Lazar, CEO of the Forest Products Association of Canada, also contrasted the past decade's experience with emerging policies, describing a progression in climate change policy development. The first generation of climate change responses involved finger pointing, platitudes and good will gestures that were then followed by a second generation, he said. "Kyoto was second generation because it was done in slices," he said. "Cap-and-trade offsets are a second-generation response because it's like paying someone else to diet." The third generation response is beginning to emerge now, and ultimately will require "a deep retooling of the economy, the changing of the fuel source," he said. The third generation will be holistic, doing total carbon accounting, and incorporating nature's cycles. "If any industry is well situated [for the third generation of climate change policy developments], it is this industry," he told the audience during the closing session of the summit.	
 

 Susanne Retka Schill is assistant editor of Biodiesel Magazine. Reach her at (701) 738-4922 or <a href="mailto:sretkashill@bbiinternational.com">sretkashill@bbiinternational.com</a>.

Todd Moser PHOTO: BBI INTERNATIONAL, SUSANNE RETKA SCHILL

1943-1294331981.jpg

Doug Hooper PHOTO: BBI INTERNATIONAL, SUSANNE RETKA SCHILL

1944-1294331981.jpg

Avrin Lazar PHOTO: BBI INTERNATIONAL, SUSANNE RETKA SCHILL

1945-1294331982.jpg

Gordon Quaiattini PHOTO: BBI INTERNATIONAL, SUSANNE RETKA SCHILL

1946-1294331982.jpg

A public opinion poll shows 89 percent of Canadians believe renewable fuels are part of a move toward a low-carbon economy, said CRFA CEO Gordon Quaiattini, in Vancouver. PHOTO: BBI INTERNATIONAL, SUSANNE RETKA SCHILL

1947-1294331983.jpg

Company executives brought the CRFS up to date on their progress towards advanced biofuels, from left, Tim Haig, Biox Corp.; Vincent Chornet, Enerkem Inc.; Ross MacLachlan, Lignol Energy; Christian Morgen, Inbicon. PHOTO: BBI INTERNATIONAL, SUSANNE R

1948-1294331983.jpg

Solid Canadian support for renewable fuels, along with new mandates and positive results from biofuels development, undergird a positive outlook at the Canadian Renewable Fuels Summit.

Canadians Backing Biofuels

For diesel exhaust system suppliers, the past several years have been consumed by development and fine-tuning of emission control technologies so that original equipment manufacturers (OEM) can meet very strict U.S. EPA regulations on particulate matter and nitrogen oxides (NOx). That huge body of work culminates in the 2010 production year as unprecedented design and function result in ultra-sophisticated commercial systems. Liquid urea and a storage tank, injectors, mixers, catalysts and sensors are just some of the items many aftertreatment systems utilize to convert NOx into nitrogen and water. Upstream from NOx control in many designs is a diesel particulate filter (DPF), which traps virtually all of the black soot typically associated with diesel trucks. Before the DPF, most systems have a diesel oxidation catalyst (DOC) to oxidize the hydrocarbons. 
 
 Much like a catalytic converter for gasoline systems, or a DOC, the body of the selective catalytic reduction (SCR) catalyst is a cylindrical honeycomb-like substrate with an extremely high surface area through which exhaust gases can flow encountering minimal backpressure. The material can be copper zeolite or iron zeolite. In Europe, vanadium pentoxide is used. A catalytic wash coat is applied to the body of the substrate. Depending on exhaust temperatures, urea dosing occurs via an injector and mechanical mixer in the exhaust to help atomize the fluid and disperse it evenly across the inlet face of the catalyst. The catalyst can also store a certain amount of ammonia, which, in certain conditions, can temporarily preclude the need to dose more fluid until the stored amount decreases. In a chemical reaction with the exhaust heat, the urea is transformed to ammonia and byproducts such as HNCO. The exhaust passes through the catalyst and reactions take place all along its surface, changing NOx into nitrogen and H2O. 
 
 As sophisticated as this technology might be, it is certainly not foolproof. Even though commercial production is underway, several potentially serious issues are being investigated, which, if not satisfactorily settled, could cost OEMs millions of dollars in warranty payouts-and that's without biodiesel in the picture. 
 
 
 Potential Issues Unrelated to Biodiesel
 
 While some DPF regeneration schemes have issues with late post-injection and fuel dilution in the engine oil crankcase, SCR technology is prone to its own types of technological glitches. For one, the issue of ammonia slip is a common concern. Ammonia slip is when unreacted ammonia, derived from the injected urea, exits the tailpipe into the atmosphere. There are no ammonia tailpipe-out limits for mobile sources today, but this may change. Many aftertreatment designs include what's called a slip catalyst after the SCR catalyst to, for example, reduce ammonia slip from 50 parts per million (ppm) to 5 ppm. Not only can unreacted ammonia escape, but a reverse reaction may occur in which ammonia, nitrogen and water can recombine to produce tailpipe-out NOx-precisely what the system is designed to eliminate. 
 
 According to an engineer for an OEM supplier, another potential issue with SCR systems is the buildup of urea deposits on the catalyst surface. "It's one of the big issues," the source says. "It's an indirect failure when these spots of concentrated urea can block the passage of exhaust gas either on or around the mixers, or at the injection mount, or downstream even at the face of the catalyst. The best way to avoid this is to make sure the exhaust pipe and everything from the point of urea injection down through the catalyst is insulated well, at minimum with air gap insulation. One reason for this is to keep the heat in, but more importantly, to elevate the temperatures of the inner wall and the mixer." Essentially, the more insulated the system, the more likely urea deposits will be avoided. 
 

 There is also the potential for hydrocarbon absorption on the SCR catalyst, depending on how the systems are designed. Rasto Brezny, deputy director for the Manufacturers of Emissions Control Association, says, "This is a topic that came up a number of years ago from testing where the SCR was upstream of the DPF, which is not a conventional way of doing things these days. In most light duty and heavy duty designs, it's the DOC followed by the DPF with the SCR downstream. The DOC and DPF are very effective at oxidizing hydrocarbons. I know our members are aware of this issue, and since it arose and appeared in the scientific literature, most systems have been designed to minimize that interaction." 
 
 Aaron Williams, engineer with National Renewable Energy Laboratory in Golden, Colo., says the iron zeolite catalysts have demonstrated many more issues with hydrocarbon absorption. "The copper zeolite seems to tolerate the hydrocarbons better," Williams tells Biodiesel Magazine. In the event that hydrocarbon loading is an issue for a particular system design, at best it could mean blocking the reaction site disallowing catalysis to take place in certain regions of the substrate; at worst, catastrophic failure of the catalyst from an exothermic reaction if all the hydrocarbons burn off at once. 
 
 Speculation has arisen as to whether the urea, also called diesel exhaust fluid (DEF), infrastructure will be in place soon enough to meet expected demand. SCR systems will not fail per se if the DEF is not replenished immediately, but it will be out of emissions compliance and, moreover, the system is designed to go through what's called a derate strategy, which involves depowering the engine and having terrible fuel economy-incentive for the driver to fill up on the proper fluid. But putting uncertified fluid such as water in the tank, as to fool the low-level DEF indicator, could "definitely drive some warranty issues," one source says. "If the driver is injecting water or fuel so he can keep driving and his low-level indicator shows a full tank, this could cause the SCR cat to be irreparably damaged, including injectors and everything else. That's why they're incorporating NOx sensors into the system so, even if you have some fluid in your tank, are you truly reducing NOx? And second, there may be urea quality sensors in the tank to look at the pH levels of urea to determine if it's an appropriate pH."
 
 One of the lesser known potential problems that could arise from SCR technology is unintentional formation of dioxins, very toxic compounds. "All the conditions are ripe for dioxin formation when you look at the things you need to create dioxins: copper, heat, chlorine and water," the source says. "This has been an ongoing thing with EPA. MECA is putting together a bunch of new tests to try and disprove the formation of dioxins in diesel aftertreatment systems. So that's in process now. From our standpoint, if we're collecting all this data and we're finding negligible formation of dioxins, we shouldn't continue wasting everyone's time and money and just call it good." The concern is with the copper zeolite catalysts, not the iron-based variety. "Worst case scenario, we might see a quadruple in dioxin formation with copper SCR, which might change the direction of some system designs, including Cummins, since they've claimed copper is their prime catalyst path." Some systems, however, could employ one iron and one copper catalyst-a "two-brick strategy." 
 
 
 Enter Biodiesel 
 The most researched, and really the only known, potential problem with using biodiesel blends in diesel SCR systems involves trace metals left in the biodiesel from processing-sodium or potassium, and calcium or magnesium. "Over time these metals, once they go through the combustion process in the engine, they end up in the exhaust and that ash can attach itself to different aftertreatment devices, including SCR catalysts," Williams says. "And it can attack those devices. After 435,000 miles," the full useful life of aftertreatment systems for heavy duty vehicles, "you'll see a lot of ash from biodiesel-from these metals-and that could foul the catalyst." Williams says on systems where the DOC and DPF are upstream of the SCR catalyst, the chance of fouling will be reduced, but he adds that some metals from the ash, when in a vapor state, can still pass through the DPF to enter the SCR catalyst. He also says some light duty applications have the SCR system upstream of the DPF, in which cases metals entering the SCR is much more of a concern. 
 
 The limit on these ashes in ASTM D6751 is 5 ppm for calcium and magnesium, and 5 ppm for sodium and potassium, but most B100 on the market comes nowhere near those amounts. "Based on NREL's fuel quality surveys, you hardly ever find detectable levels of these metals in the fuel," Williams says. The detectable limit is 1 ppm. "So we're talking about down to the parts-per-billion (ppb) range as far as at what levels these trace metals are in quality biodiesel. But if you do a back-of-the-envelope calculation and look at the current spec for allowable metals in biodiesel, a combined 10 ppm, and if you consider a B20 blend, the amount of accumulated ash that could lead to equivalent to the amount of ash you would get from lubricant oil over time, roughly speaking." He says what is really needed is a new method to detect these metals in the ppb range. This would be necessary to eventually lowering the limit in the quality spec, and adjusting the spec may be exactly the impetus to encourage more OEMs' endorsement of B20. 
 
 Lou Wenzler, on-highway marketing communications director for Cummins, says all of Cummins' on-highway engines for 2010 are B20 compatible. "We're fine with biodiesel," Wenzler says. "There are no issues for Cummins on using B20 in all our 2010 systems, specifically SCR. We're B20 compatible today, and tomorrow." Cummins does have a long, thorough history in testing biodiesel and understanding its performance in new systems, so it appears this greater understanding justifies the company's unconditional acceptance of ASTM quality B20.
 

 According to Williams, though, this matter of alkali metals is a show-stopper issue for most OEMs. This is why NREL is conducting a study supported by all the major OEMs and the National Biodiesel Board, the Engine Manufacturers Association and MECA, to take an SCR system that is connected to an engine running on B20, with metals content at the threshold limit, to its full useful life of 435,000 miles to determine exactly what effect this truly has on the catalyst. "If our tests show that limit is too high and it's detrimental to the SCR cat or the other devices, we'd go to ASTM and recommend that the limit be lowered, which couldn't be too much of a challenge considering most of the biodiesel comes in much lower than the current limits," Williams says. Other than this possible long-term concern over using biodiesel blends with SCR systems, Williams says there aren't really any other potentially negative interactions to speak of. 
 
 NREL recently conducted another study, this time with Ford Motor Co., to investigate how biodiesel might play a role in the issue of hydrocarbon absorption. "Since biodiesel hydrocarbons are different than petroleum hydrocarbons, we wanted to see how biodiesel might affect this," Williams tells Biodiesel Magazine. They tested straight B100 in this study. "One thing we found was you get less hydrocarbon absorption because the amount of engine-out hydrocarbons is lower with biodiesel. Another thing we found was that if you saturate the catalyst with hydrocarbons from biodiesel, they come off a lot easier than hydrocarbons from ULSD do. We're doing follow up studies to see exactly why that's the case. But the basic conclusion is that the hydrocarbon poisoning issue for SCR catalysts is no worse at least from using biodiesel."
 
 Ron Kotrba is the editor of Biodiesel Magazine. Reach him at (701) 738-4942 or <a href="mailto:rkotrba@bbiinternational.com">rkotrba@bbiinternational.com</a>.

Aaron Williams, an engineer with the National Renewable Energy Laboratory, tests a urea SCR system. PHOTO: NREL

1949-1294331983.jpg

A schematic shows the BlueTec SCR system, which uses AdBlue-brand urea as a reductant. PHOTO: DAIMLER AG

1950-1294331984.jpg

This year marks the onset of widespread commercial application of selective catalytic reduction systems for on-highway diesels, to reduce nitrogen oxide emissions per U.S. EPA regulations. Researchers say there are no short-term negative effects from using biodiesel blends in diesel SCR systems, but long-term performance is much less understood.

Year of the SCR System

The U.S. fuel infrastructure involves an intricate web of highways and rail links, pipelines, truckers, jobbers, vessels, terminals and tank farms. This vast network often includes dozens of independent oil companies in every state that ruthlessly compete for market share at various levels of the supply chain. 
 
 Because renewable fuels compete with their petroleum counterparts as "substitutes," biodiesel producers and marketers cannot pass on their transportation costs-if it costs 20 cents-per-gallon to get a load of fuel from the plant to a terminal or an end user, they have to absorb that expense themselves.
 
 Building out infrastructure for renewable fuels has to be done in a way that makes the industries able to compete, function and cooperate with existing modes of liquid fuel transport. Subsequently, biodiesel logistics coordinators-along with states, rail and freighters-have been creative in developing platforms in the industry. 
 
 Jerry Wilburn of Double Diamond Energy Inc., a 30 MMgy plant in Dimmit, Texas, told Biodiesel Magazine that retailers from the immediate vicinity come to his plant to pick up biodiesel. That paradigm, however, only works for some plants positioned near demand centers. 
 
 Like many of the major oil companies that sell biodiesel, BP and ExxonMobil for instance, most large biodiesel plants such as Double Diamond Energy have to move product out of state to reach areas of high demand. Corroborating Wilburn's statements, however, is the fact that in Texas, the city of Austin alone-with dozens of pumps-is a nice market for area producers. Love's Travel Stops, Signature Fuels and ExxonMobil are among the leading retailers of biodiesel in the state. 
 

 National Renewable Energy Laboratory's fairly new TransAtlas tool, which maps retail stations as well as biodiesel production plants, is available to help supply chain managers make the most economical decisions. The interactive map shows that North Carolina has the greatest cluster of biodiesel retail pumps. The U.S. DOE's Alternative Fuels Data Collection service reports that North Carolina leads the U.S. with 137 pumps. States ranked second and third are California and Washington with 51 and 47 pumps, respectively.
 
 
 Local Model
 
 Plant-to-pump paradigms aren't just about supply and demand and developing shrewd transportation management skills; they can actually be a part of a biodiesel company's core business model and even a part of its overall philosophy. Sometimes biodiesel has to be moved great distances but some production schemes take advantage of outlets in their immediate vicinity. One state that has made this possible is North Carolina. "The [Research] Triangle Area probably has about the greatest density of B100 users in the country," says Marc Dreyfors of Carolina Biodiesel in Durham. A state mandate requires government fleets to use biodiesel, which may have helped position North Carolina in its number one ranking in biodiesel pumps.
 Indeed, fleets are some of the biggest customers of biodiesel salesmen and marketers. Large corporations and municipalities often have hundreds of diesel vehicles used in daily operations. The U.S. government is the biodiesel industry's biggest single customer, but more efforts are being made to generate private-sector retail demand. 
 
 Carolina Biodiesel delivers fuel via a 2,500-gallon tanker truck for a minimum charge of $45 "or seven cents-per-gallon, whichever is higher," Dreyfors says. In addition, there's no charge if the purchaser picks up the fuel from the terminal or if the tank is part of the Triangle Tank Trail delivery system, developed by Carolina Biodiesel and Piedmont Biofuels. "We can help you set up fuel tanks, deliver fuel to you and even help you work through the first stages of setting up a biofuels co-op," Carolina Biodiesel states. The company also sells and leases fuel tanks. Purchasers, retailers and others in the distribution chain can become a part of the Triangle Tank Trail by joining the Piedmont Biofuels Cooperative. 
 
 Carolina Biodiesel does a lot of business with Piedmont Biodiesel, which Dreyfors calls "the granddaddy" of biodiesel in the state. Piedmont engineered and constructed the first B100 fuel terminal in North Carolina. "We can fill top-loading tanker trucks, bottom-loading tractor trailers, 250 gallon totes, 55 gallon drums, and everything in between," the company says. "We can fill a shot glass with B100 if you would like."
 
 
 Building Demand, Networks
 

 Logistics continue to be a challenge directly related to profit margin. Furthermore, there's not enough demand in certain major production areas such as Iowa, for instance, so large plants must truck their goods long distances-sometimes across the country-to reach solid markets. The Northeast, though not heavily populated with on-highway pumps, buys a lot of heating oil and Bioheat.
 
 Last summer, DOE's office of Energy Efficiency and Renewable Energy released a report on the creation of the I-65 Biofuels Corridor. From the Great Lakes to the Gulf Coast, the interstate features five B20 pumps strategically located so travelers can drive the 886-mile stretch using renewable fuel blends the entire way. Some locations were given grants to install biofuel pumps through the DOE's Clean Cities program, which convinced other stations planning construction or expansion projects to include biofuels in their renovation plans. "This saved them a third of the cost," EERE says.
 
 Growmark, Countrymark and other distributors operate biodiesel handling facilities and terminals in states served by I-65, such as Indiana, where methyl esters are widely offered by such companies as Thorntons Convenience Stores and Gas City Ltd. 
 Some aspects of distribution certainly involve diversifying the customer base. Retail customers pay a premium but do not use the fuel in high volumes, and fleets contribute more to volume but are not willing to a pay a premium-but Dreyfors says between the two is where Carolina Biodiesel can break even. "And breaking even is a beautiful thing," he says. "It's nearly impossible to make money-you either have to increase your volumes or increase your margins."
 
 Also, waterways and pipelines have proven to be modalities of superior efficiency. Kinder Morgan spent some effort publicizing its shipment of biodiesel through a section of its pipeline network, but pipeline testing and transport can take years before any serious volumes are moved. And most biodiesel plants don't move enough volume to put barges to work. So the two cheapest modes of fuel transport-pipelines and fuel barges-are conspicuously absent from biodiesel distribution schemes. "Ethanol and biodiesel aren't really fuels, they're fuel additives," says Michael Cooper of Chicago-based Ultra Green Energy Services. "Gasoline and diesel fuel aren't delivered by rail car, it's mostly barge and pipeline transport." 
 
 Highways are often built by the federal government, states often build and repair their own roads, and towns and cities manage and maintain commercial and residential streets. This model exemplifies a tiered distribution and transport system. Similarly, the dominating paradigm of biodiesel distribution often operates in the following way. A producer sends biodiesel either by rail or truck to a fuel terminal where the fuel is stored. It is either then preblended to percentages selected by the terminal managers, or blended at the rack, often to customer specifications. UGES says it has the largest network of fuel terminals in the state of New York, which services a relatively exciting region for biodiesel sales, but UGES often buys biodiesel from producers in the Midwest. Fuel oil dealers and other retailers pick up a blended product from B20 to B99 at these "racks."
 
 "Spoke-and-wheel" logistics models, used in several industries including commercial air traffic, are used in the biodiesel industries as well. Biodiesel production does remain relatively centralized in areas such as Texas, the upper Midwest and the "Great Lakes" states of Michigan, Indiana, Ohio and Illinois. Minnesota, Wisconsin and Iowa combine with the states already listed to form the majority of the production stronghold. In addition, Washington and California show significant clusters of biodiesel production. 
 
 Access to barge and pipeline remains an advantage for petroleum companies when it comes to competing with alternative fuels in the marketplace. Meanwhile, producers will continue to be creative when it comes to building local demand, brokering freight deals and managing risk. "The biggest hang-up for the biodiesel industry is the price volatility of commodities," Dreyfors says. "I don't see a cap-and-trade system being put in place and I don't see the price of energy going up anytime soon. Policies will dictate the playing field." 
 
 Prices are so competitive, and sales are squabbled over ferociously. Hoping to avoid bidding deals or fighting for sales, some distributors are even uncomfortable talking about specifics involving their customer lists. "It can be pretty ruthless," Cooper says. "People are getting circumvented all the time." UGES, however, publishes its customer list online and Cooper says that he refers business to his own customers-ultimately that means they're buying more fuel from him. 
 

 Each opportunity has to be maximized, each transport transaction managed meticulously. "Rail is the challenging part of what we do," Cooper says. "Sometimes you have to call the railroad to come pick up your cars. Otherwise, they'll sit at the terminal for a week."
 
 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>.

Pipelines are one of the most efficient ways to transport fuel, but little biodiesel is moved this way. 

1951-1294331984.jpg

Many biodiesel producers consider their customer lists proprietary, but whether it's a small plant in Texas that has off-take agreements with retail stations in the immediate vicinity, or a large, corporate-owned facility working for ExxonMobil shipping fuel all over, Biodiesel Magazine traces methyl esters from source to spigot.

Plant to Pump Paradigms

Posted January 20, 2010

 
 With the 2010 National Biodiesel Conference & Expo only weeks away (Feb. 7 – 10 in Grapevine, Texas), the National Biodiesel Board is enticing people who have yet to sign up by offering a buy one, get one free registration offer. Those who have already registered can also qualify for the deal. This could be a savings of as much as $775. 
 
 To qualify for this offer, registrants must reserve their hotel accommodations with the Gaylord Texan Hotel and Convention Center, and confirm a minimum of four paid room nights. This can be through the purchase of two rooms for two nights, one room for four nights, or any combination thereof, to reach a total of at least four paid room nights at the Gaylord over the conference dates.
 
 The discount code for NBB members is "nbb_member_discount_coupon".
 The discount code for nonmember is "nbb_non_member_discount_coupon".
 
 The offer is not limited per company or organization, and it expires when the Gaylord becomes unable to fulfill conference lodging requests. There are no cancellations of the minimum four room nights once NBB issues the free registration.
 
 For more information, visit <a href="http://www.biodieselconference.org">www.biodieselconference.org</a>.

NBB offers buy one registration, get one free

Posted January 20, 2010

 
 Australian jatropha developer, Jatoil Ltd., is preparing integrate a crop into its Asian biofuel farms that is valued for its sweet leaves, being 40 times sweeter than sugar. Along with two other Australian firms, Nuflora and Floraquest, Jatoil will "intercrop" Stevia, a member of the sunflower family with origins in the Americas, which is said to be in strong demand from global food and beverage manufacturers as a natural low-calorie sweetener. 
 
 A joint venture company, JatlC Pty Ltd, will own the intellectual rights and provide the seeds and marketing support developed through the project. "The initial work with NuFlora and Floraquest will involve the identification of suitable crops, nursery management techniques and plant breeding," the company stated in a release.
 
 Jatoil further stated that intercrop planting is becoming a best-practice in large-scale biofuel ag operations worldwide, providing significant additional revenue before jatoropha has reached maturity. 
 
 "Jatoil's biofuel farms will remain focused on producing oil from renewable sources, but a significant portion of future revenues were always going to come from the sale of products other than oil," said Jatoil CEO Phil Hodgson. "We will be able to sell waste biomass seedcake that is produced during the crushing process and also carbon credits. Now we see great potential in intercropping of products like Stevia."

Intercrop planting at biodiesel farms

Posted January 26, 2010
 
 To power its new biodiesel plant in Gulfport, Miss., Go Green Energy LLC turned to Mastry Engine Center for a specially-built MasPower MEC45DSA generator. The Go Green Energy facility utilizes two water wells and a geothermal unit for heating and cooling. Powering the equipment, as well as the building, its 45 kilowatt MasPower generator features a heavy-duty Yanmar 4TNV98T engine. Achieving 90 percent efficiency, even motor waste heat is recycled in the biodiesel manufacturing process, as well as in additional hydronic heating during the winter. 
 
 "We're very happy with our MasPower and with Mastry Engine Center for being able to provide us with a complex generator built to our exact specifications," said Go Green Energy chief engineer Dave Carlson. "The Yanmar is an added bonus. They're the best, most efficient diesel engines on the market today."
 
 Running on B100, Go Green Energy's MasPower generator uses only 20 to 30 gallons per day to produce 2,500 gallons of biodiesel a day and 4,000 gallons a day of specialty green product, including cleaners and automotive additives. It also supplies spare electricity to power 40 pumps and other equipment. 
 

 "The MasPower generator is integral to our business," Carlson said. "It's really the heart of our system."
 
 Founded in 1962, Mastry Engine Center provides power solutions to the industrial and marine markets. The company has a reputation as the team to turn to for challenging gas and diesel powertrain applications and engine installations. It supports a network of over 140 authorized dealers throughout the US and Caribbean.
 
 SOURCE: MASTRY ENGINE CENTER

The Go Green Energy biodiesel plant in Gulfport, Miss., installed a new MasPower generator to power its process. //PHOTO: MASTRY ENGINE CENTER

1966-1294332190.jpg

Mississippi plant installs MasPower generator

Posted January 26, 2010
 
 Massachusetts-based renewable energy company Bodega Algae LLC, and Bigelow Laboratory for Ocean Sciences in West Boothbay Harbor, Maine, have received a six-month, $150,000 Small Business Innovation Research (SBIR) grant from the National Science Foundation to develop and test a prototype for growing high concentrations of algae, for use as biofuel. The grant is titled Light Delivery Enhancement of Photobioreactors and will be used to develop advanced photobioreactors. 
 
 A photobioreactor cultivates algae efficiently by delivering optimal supplies of nutrients and light for growth.
 
 Sam Hill, Bodega Algae's president, said, "The first phase of our SBIR project addresses the technical challenges involved in cultivating large amounts of algae needed for producing and using algal biofuel at an industrial scale."
 
 Willie Wilson, a senior research scientist at Bigelow Laboratory, is the interim director of the laboratory's Provasoli-Guillard Center for the Culture of Marine Phytoplankton, the nation's official collection of marine algae, and the largest micro algae repository on the east coast. Wilson will test methods of light delivery developed at Bodega Algae for their effect on cell growth rates for a range of algal strains.
 
 "A key goal of the project is to identify the best methods and design for capturing and sending light to algae in larger volumes under varying conditions in order to grow algae," Wilson said. "This grant gives us a chance to test methods to grow high volumes of algae quickly and efficiently. This would open one of the major bottlenecks in the production of biofuel."

 
 The central focus of Bodega Algae is the development of next-generation commercial algae photobioreactors for high-volume commercial production of algae biomass. Bodega was recently identified by <a href="http://www.earth2tech.com">Earth2Tech</a>, a website tracking innovations in green technology, as one of the top 15 biofuel companies in the country to watch.
 
 Bigelow Laboratory for Ocean Sciences is a center for global ocean research. An independent, nonprofit research institution, the Laboratory is supported by federal research grants and private funds. The Laboratory's research ranges from microbial oceanography-examining biological productivity in the world's oceans at the molecular level-to the large-scale biogeochemical processes that drive interactions between ocean ecosystems and global environmental conditions.
 
 SOURCE: BIGELOW LABORATORY FOR OCEAN SCIENCES

Bodega Algae, Bigelow Lab receive NSF grant

Posted January 27, 2010
 
 Simply Green Biofuels and M.L. Halle Oil Service Inc. have partnered to bring the benefits of Bioheat to Manchester, N.H., nicknamed the Queen City. 
 
 M.L. Halle started delivering Simply Green Biofuel's B5 blend late last year, becoming the first exclusive partner for Simply Green in the state thus far. 
 
 Andrew Kellar, founder of Simply Green Biofuels, said, "Judging by the amount of inquiries that we have received, the Manchester area has been looking for a Bioheat supplier for some time, but we logistically haven't been able to accommodate them. Being able to partner with a company that is so in tune to its community's needs has expedited the process of bringing these fuels to Manchester." 
 

 Halle had its "Grand Green Opening" on Wednesday, Jan. 13th, to a crowd of 25 local dignitaries, fellow business owners and members of both the NH Oil Heat Council and the National Biodiesel Board. One of those in attendance was Lou Nazzaro, operations manager for advanced fuel solutions, which acts as the petroleum liaison to the NBB. 
 
 "The partnership between Simply Green and M.L. Halle sends a message to the community that the future of heating oil-Bioheat-is in their backyard," Nazzaro said. "When two leaders in their respective market come together for a win-win relationship, it's great news for the markets that they serve. " 
 
 Halle's commitment to going green has also led it to run its entire fleet on biodiesel, which will reduce the company's carbon dioxide emissions by almost 4 percent, nearly 9,000 pounds. Halle also sends all of its newsletters, invoices and statements electronically, which has reduced its waste stream. 
 
 Simply Green's biodiesel is made from waste vegetable oil. Blends are available from 5 percent up. No system modifications are needed to run up to a B20 blend.
 
 SOURCE: SIMPLY GREEN

Shannon Hill, Director of Business Development Simply Green Biofuels, Mark Halle, President ML Halle Oil, Pam Giordano Operations Manager ML Halle Oil, Roger Davis General Manager, ML Halle Oil, Andrew Kellar, Founder Simply Green Biofuels//PHOTO: SI

1967-1294332191.jpg

Bioheat comes to N.H.'s 'Queen City'

Posted January 27, 2010
 
 Nathan DeMartino, president of Dexter Biodiesel Solutions in Pearland, Texas, said his company recently sold its first BCC900 Cold Clear unit to Keystone BioFuels, a 20 MMgy facility in Shiremanestown, Pa., and said that it is the largest unit sold "anywhere in the world," and the largest install to date.
 
 The larger models consist of completely different housing and filter systems than the smaller counterparts. They filter 45 gallons per minute of biodiesel fuel and can process 120,000 gallons to 200,000 gallons before the filters need to be changed.
 
 This shows blenders and other high-throughput producers that the unit can handle their loads, DeMartino told Biodiesel Magazine. "I'm really excited about blenders and the market that is there for this system," he said. "This installation at a 20 MMgy per year plant demonstrates to blenders that these larger units can be used to lead to better cloud point, pour point, cold filter plugging point and oxidation stability." 

 
 Keystone BioFuels will use the Cold Clear unit as a quality control measure to ensure that the biodiesel they produce is consistently below the ASTM cold soak standard for biodiesel, which will "help them achieve the coveted BQ9000 status," DeMartino said.

Dexter installs largest Cold Clear unit

Posted January 27, 2010
 
 Biofuels producers combine to make up an $8 billion dollar industry in Iowa and support about 80,000 jobs, but they're suffering. "With volatile oil prices, the global credit crunch and the lapse of the federal biodiesel tax incentive, almost half of the state's biodiesel plants have gone idle or have already closed their doors," the Iowa Biodiesel Board said on Jan. 21, the same day Gov. Chet Culver was in Washington testifying before a U.S. Senate subcommittee on extending the tax incentive.
 
 "This is an exciting time for our country and we have to keep these industries alive that have had a positive environmental and economic influence on our country," Culver, chair of the Governor's Biofuels Coalition, said. 
 
 Also, on Jan. 21, Randy Olson testified before the Iowa's House Transportation Committee in Des Moines, to discuss the Iowa Biodiesel Fuel Quality standard measure, which passed the state senate last year and would require petroleum companies to blend a modest five percent biodiesel into the state's diesel fuel, the IBB said. 
 
 "The B5 initiative will save our state's green jobs," Olson said. "It would create demand for 45 million gallons of Iowa-made biodiesel a year, reducing our dependence on foreign oil by a corresponding amount."

Iowa officials campaign for biodiesel

Posted January 27, 2010
 
 Fighting short-term exposure to nitrogen dioxide (NO2) is a new priority for the U.S. EPA. The agency announced on Jan. 25 that a "new one-hour standard will protect millions of Americans from peak short term exposures, which primarily occur near major roads," and that the threat was linked to increased respiratory infections and impaired lung functions, especially for those who suffer from asthma. 
 

 The American Petroleum Institute responded immediately, issuing a statement the same day, which accused EPA of using "faulty science" to establish the new standard. 
 
 "EPA rushed to a decision without completing a thorough review of the science in a manner that allowed proper public participation. Today's standard is bad public policy and does not justify the additional economic burdens placed on consumers, states and industries," API stated. "There is no significant evidence that the short-term NO2 standard established today by the administrator is necessary to protect public health. EPA is over-regulating this air quality standard for political-not health-reasons." 
 
 "Refineries and biorefineries could have to put in additional NOx controls at considerable cost," Howard Feldman of API told Biodiesel Magazine. "EPA in general has a set of programs that are burdening industrial sources, to what purpose I can't speculate. But they are in the process of revising all of their ambient air quality standards, and that is unprecedented." Feldman didn't elaborate on why API believes this new standard is politically motivated. 
 
 The new one-hour standard for NO2 is set at 100 parts per billion (ppb). The ruling puts pressure on vehicle manufacturers, power plants and other industrial emitters-such as petroleum companies-to change its practices. NO2 is a component of NOx and meeting the new standard may influence some fleet owners and municipalities to buy 2010 model or later diesel vehicles that are equipped with diesel particulate filters and NOx traps. 
 
 Now, monitoring will be required by EPA to measure NO2 levels near roadways in cities with at least 500,000 residents. "Working with the states, EPA will site at least 40 monitors in locations to help protect communities that are susceptible and vulnerable to elevated levels of NO2," the agency said.
 
 For more information from EPA, click <a href="http://yosemite.epa.gov/opa/admpress.nsf/0/eb9d73686196b38e852576b60059fbd5?OpenDocument">here</a>.

API: New NO2 standard politically charged

Posted January 29, 2010

 
 Biofuels have received presidential utterances in past State of the Union addresses, but results have not always been forthcoming. "First of all, there were no specifics, so there was really nothing there," said Jatrodiesel president Raj Mosali, of U.S. Pres. Barack Obama's Jan. 27 address to the nation. "The president mentioned biodiesel specifically when he was campaigning, and now he's talking about 'biofuels,' which could mean anything-and that's concerning."
 
 In addition, grants, loan guarantees and even American Recovery and Reinvestment Act funds are not going to biodiesel producers for the purposes of plant optimization and upgrades. "That's 100 percent true," Mosali says. "All of this assistance is being directed toward things like fuel cells, cellulosic ethanol and electric motors-all technologies that are still far off." 
 
 The National Biodiesel Board said it was pleased that the president noted the important role advanced biofuels play in the nation's energy policy, but action is needed more than words to help the faltering biodiesel industry. "If Congress and the Administration truly want to protect and promote green job creation, they should act immediately to extend the biodiesel tax incentive," said Manning Feraci of NBB's Washington office. 
 
 Biodiesel Magazine sources indicate that many plants are shut down, eagerly awaiting the extension of the $1-per-gallon federal blender tax credit, which expired on Dec. 31, 2009. Some have tried to pass the now additional $1-per-gallon cost for biodiesel along to customers, with little result. Others don't have the cash to float waiting for payback from the government when the credit-expected by industry insiders to be retroactive- does get reissued.
 
 "Absent quick action to rectify this problem, the environmental, energy security and job creation benefits that are derived from the domestic production and use of biodiesel are at immediate risk," NBB said.

Obama says 'biofuels,' industry wants action

Posted February 2, 2010
 
 Amidst the worst economic times in the biodiesel industry's short history, a new refinery, built around the cooperative model, is starting production in Temecula, Calif. Promethean Biofuels Cooperative Corp., a 1.5 MMgy production facility transesterifying used cooking oils into quality methyl esters, is holding its grand opening ceremony on Feb. 19 at 10 a.m. 
 

 A press conference will be held followed by refreshments, a ribbon cutting, raffles, and tours of the plant and the production of its first road-grade batch of biodiesel. Most of Promethean's new facility is made of repurposed or reused material. The 17,000-sq.-ft. plant is located adjacent to a community recycling facility, which the co-op said helped during the plant construction and allows a place for consumers to drop off used cooking oils and other recyclables. 
 
 The cooperative told Biodiesel Magazine that its plant was designed as a chemical blending and off-specification product rework facility. Its biodiesel production process uses alternating high temperature and high pressure, and employs a deep-vacuum process. Its fuel production is batch with continuous purification. In addition to running its own plant, Promethean undertakes design/build projects for other biodiesel producers. 
 
 "With our cooperative biofuels model, we are ideally suited to collaborate with citizens, businesses and [government] officials in an effort to lead the way to a clean, community-based, innovative, renewable, sustainable energy production and consumption way of life," said Todd Hill, Promethean's managing principal and founder. 
 
 Promethean is also seeking community service volunteers and interns for various projects at its Temecula biodiesel plant. The co-op stated, "Our cooperative business model lends well for students to complete community service or intern hours." 
 
 For more information, visit <a href="http://www.prometheanbiofuels.com">www.prometheanbiofuels.com</a>.

A Promethean worker makes adjustments on Psiclops, a proprietary pressure vessel. //PHOTO: PROMETHEAN BIOFUELS

1968-1294332191.jpg

Promethean Biofuels starts production

Posted February 2, 2010
 
 On Feb. 2, the National Biodiesel Board forwarded a letter from 179 biodiesel companies and stakeholders to the Leadership of the House and Senate, as well as the Chairmen and Ranking Members of the tax writing committees, regarding the urgent need to retroactively extend the biodiesel tax incentive, which expired on Dec. 31. 

 
 The letter notes, among other things, "expiration of the tax incentive has essentially caused the production and use of biodiesel in the U.S. to cease and has placed the 23,000 jobs that are currently supported by the domestic biodiesel industry in immediate jeopardy. Companies have already started laying-off employees, and this situation is certain to worsen the longer the tax incentive is allowed to lapse." 
 
 Biodiesel is a diesel replacement fuel made from agricultural oils, fats and waste greases that meets a specific commercial fuel definition and specification. The $1-per-gallon biodiesel tax incentive is structured in a manner that makes biodiesel price competitive with petroleum diesel in the marketplace. Absent the tax incentive, biodiesel is more expensive than conventional diesel.
 
 "The sentiment expressed in this letter accurately reflects the dire situation facing the U.S. biodiesel industry," noted Manning Feraci, NBB's vice president of federal affairs. "Biodiesel producers are hanging on by a thread, idling their plants, laying off employees, and closing their doors. As these letters indicate, it is imperative for Congress to act quickly and save these green jobs."
 
 Click <a href="http://www.biodiesel.org/news/taxcredit/docs/BiodieselIndustryLetter-SenateLeadership1-29-10.pdf">here</a> to read the letter to the Senate.
 
 Click <a href="http://www.biodiesel.org/news/taxcredit/docs/BiodieselIndustryLetter-HouseLeadership1-29-10.pdf">here </a>to read the letter to the House of Representatives.
 
 SOURCE: NBB

Congress urged to act swiftly on tax credit

Posted February 3, 2010

 
 Metro Biofuels of Brooklyn, N.Y., secured a supply contract with Kaufman Astoria Studios in Queens to deliver its branded biodiesel-blended heating oil, Greenheat, to the longtime television studio founded in 1920. Previously, Kaufman Astoria Studios was using straight residual heating oil (No. 4 and No. 6 fuel oils), but now the studio that's been home to Sesame Street for 17 years and other television shows, movies and commercials, is using 5 percent biodiesel in its residual heating oil. 
 
 Metro will supply Kaufman Astoria Studios with 80,000 gallons a year of Greenheat, which amounts to about 4,000 gallons of B100 in the B5 blend. 
 
 The president of the studio, Hal Rosenbluth, said, "We decided it was a perfect time to make a change, as we've been looking for ways to green around the complex. The initiative to switch our heating oil fit naturally into our plans and we now have a new heating plant in the studio. We are thrilled to answer the Mayor's call to action for a greener New York by using Metro's biodiesel fuel."

Metro inks supply deal with Kaufman Astoria

Posted February 3, 2010
 
 After being named as a multi-million dollar recipient of U.S. DOE's latest round of research handouts, certain scientists at Argonne National Laboratory in Argonne, Ill., aren't focused on algae oil extraction or making jet fuel.
 
 Instead, Seth Snyder, biochemical engineer for Argonne, told Biodiesel Magazine that it's focusing on ways to make bio-based diesel "molecules" that are compatible with the existing fuel infrastructure in the United States. "Esterified molecules, like the ones in biodiesel, are [hygroscopic], which doesn't work for pipeline transport," Snyder said. "We are working to develop molecules that are more similar to actual diesel fuel-hydrocarbons-yet made from the same biologically based sources."
 
 Argonne is a part of the National Advanced Biofuels Consortium, led by NREL, whose sole purpose is to "develop infrastructure-compatible, biomass-based hydrocarbon fuels." 

 
 Fuels made with catalysts such as sodium methylate, used by biodiesel producers to convert bio-based oils into B100, can cause blending problems with standard petroleum fuels, Argonne said. "We're going way past sodium hydroxide," Snyder said. "If we can make fuel that does not consist of caustic bonds it will be a more direct diesel replacement, meaning that fuel wholesalers can base their purchases of biofuels on the competitive market and not on blend levels. B5 and E10 cannot achieve the goals set by the United States for renewable fuels usage."
 
 Snyder added that the incompatibility of biofuels with current fuel infrastructure "hurts the economics" and that Argonne will be announcing "pathways" for the production of pipeline-ready biofuels within the next few weeks.

Argonne to develop pipeline-ready biofuels

Posted February 3, 2010
 
 Imperial Oil, the Canadian Petroleum Products Institute and Natural Resources Canada have issued a report on biodiesel performance and quality, preparing for-or delaying-the implementation of a possible federal Canadian blend mandate. The study was not endorsed by the Canadian Renewable Fuels Association and information suggests the research focused on issues to which the answers are already known. 
 
 The key "technical outcomes" of the research were that long-term furnace performance was "negligibly impacted by fuel up to B10, that mono-glycerides had a "deleterious impact" on the low temperature operability of filters in fuel handling systems and need to be limited, and that "long-term stability of renewable diesel fuel can be assured via the use of commercially available oxidation control additives."
 
 A source close to the CRFA indicated that this study, led by an oil company under Canada's National Renewable Diesel Demonstration Initiative, was basically a delay tactic meant to inhibit the implementation of a biodiesel mandate and work toward the adoption of a B100 quality spec that would be the most stringent in the world. In addition, the source said that biodiesel is often blamed for the "shortcomings of ultra-low sulfur diesel."
 
 "We have complete confidence that biodiesel will more than satisfy the strongest doubters when it comes to technical feasibility when all the evidence has been collected," said Gordon Quaiattini, President of the CRFA. "It is important to remember that on-road performance was also questioned at one point and in the final report issued in 2009, those questions were put firmly to bed. By June, a further half dozen demonstration projects for off-road performance will have been completed. All feedback to date has been positive and we look forward to the mandate proceeding without delay." 
 
 The Canadian Trucking Association also participated in the study and spoke with Biodiesel Magazine about its stance on the renewable fuel, saying the report provided valuable information but more work was needed before a government-imposed mandate took effect. "We're not particularly opposed to biodiesel and we have no love for the oil companies or anything," said Doug Switzer, vice president of public affairs for the Canadian Trucking Association. "We just have a lot of questions that we feel need to be answered before a blend requirement [is implemented]." 

 
 Switzer said that CTA viewed "biodiesel" as a brand that covered a wide variety of products, some of which have superior quality and performance characteristics. He added that Canada needs a comprehensive national standard for biodiesel fuel and not a "hodgepodge" of ASTM and EU guidelines that assure a consistent, high-quality renewable fuel at the nation's pumps. "Having nine out of 10 issues covered isn't good enough," he said. "That is why we have been involved with this research." 
 
 Others stakeholders disagree and do not believe that the Canadian General Standards Board needs its own biodiesel quality standard, and say the existing ASTM channels are more than sufficient for addressing any potential quality-related biodiesel issues. 
 
 "The Government of Canada supports biofuels and other alternative fuels as part of our commitment to reducing Canada's total greenhouse gas emissions by 17 percent from 2005 levels by 2020," the Minister's office of Natural Resources Canada said. "Our government is working closely with industry partners to allow for the integration of renewable diesel in the Canadian fuel market by 2011 or earlier, subject to technical feasibility."
 
 NRC added that this round of testing is intended to determine the safety and effectiveness of renewable diesel in all applications under typical Canadian conditions. "We will be guided by the results of this testing and only after successful demonstrations would the federal government move forward with its intention to regulate renewable fuel content in the diesel pool," NRC said. 
 
 The full report can be viewed at <a href="http://www.cppi.ca">www.cppi.ca</a>.

Contentious Canadian biodiesel report issued

Posted February 3, 2010
 
 The final rule for the revised renewable fuel standard (RFS2) was issued by U.S. EPA on Feb. 3, and soy biodiesel comes in at a 57 percent reduction in greenhouse gases (GHG) compared to petroleum diesel, making it eligible to meet the biomass-based diesel carve-out. During a press conference on Feb. 3, EPA administrator Lisa P. Jackson said, "The ruling makes it clear that up to a billion gallons of soy biodiesel by 2022 is a good investment." 
 

 To qualify as a biomass-based diesel or an advanced biofuel under the Energy Independence and Security Act of 2007-which RFS2 was part of-soy biodiesel was required to meet a 50 percent reduction in GHG emissions compared to petroleum. 
 
 The National Biodiesel Board noted that EPA's uncertainty analysis recognizes that the GHG reduction for soy biodiesel could be as high as 85 percent. 
 
 The EPA also confirmed that the combined 2009/2010 volume requirement for biomass-based diesel is 1.15 billion gallons, the sum of 2009 and 2010 blend requirements as laid out in EISA, which has been thought probable for some time. 
 
 Jackson went on to say that indirect land-use change is still part of the final rule, but the models used are "based on the soundest available science," and are "more sophisticated" than previously, and "better data" was available to the agency. 
 
 She also said EPA considered public comment and worked closely with USDA to implement a more realistic characterization of biofuels' GHG reductions, and learned its original accounts for crop productivity and yield, for instance, were incorrect. Jackson also said in its proposed rule, EPA only considered 40 nations but when 160 countries were pulled into its indirect land-use change modeling, the "impacts were different and lesser than we thought-we got a very different result," she said. 
 
 Jackson said she did not agree with the premise of a reporter's question about EPA "changing the science to fit an outcome" for which there was a lot of pressure being given, and said EPA did not "dumb down the standards to favor a particular outcome." 
 
 "Through the public comment process, EPA staff came forward with recommendations based on what we know now, and including indirect land-use change-not excluding it. Renewable fuels are getting cleaner, and there's a real benefit to this country and to the environment," Jackson said.
 
 Ag secretary Tom Vilsack said one reason the numbers were different in the final RFS2 rule versus the proposed rule is because crop productivity is continually evolving and rapidly changing, and technology impacts and effects what happens on land. Vilsack also said there are resources in the farm bill for first-generation biofuel producers to retrofit their plants in order to update the process technology. 
 
 "The U.S. biodiesel industry stands ready to provide the fuel that will be needed to meet the readily attainable biomass-based diesel goals established in RFS2," said Joe Jobe, CEO of the NBB. "We look forward to working with all industry stakeholders to successfully implement this worthwhile program."

 
 Director of the National Resources Defense Council Nathanael Greene said, "The final rule confirms that some biofuels reduce global warming and some pollute more than gasoline and diesel. This proves how important it is to put policies in place to make sure public dollars go to support real renewable energy instead of going after options that do not work and could actually do more harm than good." He added that a reform to the bio tax credits and a low carbon fuel standard like California's are "best next steps."
 
 Click <a href="http://www.epa.gov/OMS/renewablefuels/">here</a> to navigate to EPA's final RFS2 rule.

RFS2: soy biodiesel meets GHG reductions

Posted February 5, 2010
 
 Dow Water and Process Solutions will be exhibiting at its first National Biodiesel Conference, where it will launch its new Ambersep BD19DRY fuel polishing resin that can help producers pass the cold soak filtration test. 
 
 This is an expansion of the biodiesel product line that Dow acquired from Rohm and Haas in 2009. "Dow is committed to the biodiesel industry," said Alfred Schultz, senior scientist with Dow Water and Process Solutions. "We've expanded our biodiesel products to include increased purification and catalysis services, which can help biodiesel producers reduce their costs by 20 cents to 30 cents per gallon."
 
 Dow's solid catalyst FFA esterification technology can process 36 feedstocks, opening the possibility for producers to utilize inputs that are considerably low quality. "There's a correlation between free fatty acid content and cost," Schultz said. "The higher the FFA content, the lower the cost." 

 
 Entering the biodiesel industry at a tumultuous time for the industry, Dow said it saw an opportunity in helping the biodiesel industry with products that could buffer the volatility of raw materials costs. "Feedstock costs are 80 percent to 90 percent of a biodiesel producer's overall expense," Schultz said. "Our products can help with the ebb and flow of market costs and maintain a more firm price range for producers."
 
 Dow Water and Process Solutions will be exhibiting its biodiesel process solutions at booth 1005 at the NBC, which starts Sunday, Feb. 7, in Grapevine, Texas.

Dow unveils new biodiesel product for NBC

Posted February 8, 2010
 
 At the first general session of the 2010 National Biodiesel Conference & Expo in Grapevine, Texas, Coleman Jones, director of biofuels implementation for General Motors Corp. announced that its new Chevrolet Silverado and GMC Sierra pick-ups, as well as Chevrolet Express and GMC Savanna full-size vans, will be B20 compatible. 
 
 "This is the result of a lot of work," Jones told Biodiesel Magazine. "But we've got our suppliers on board, and these models will be on sale later this year."
 
 The seals, gaskets and other components that need to accommodate certain unique characteristics of biodiesel, GM usually outsources. "We've wanted to approve higher blends of biodiesel before, but we don't build the whole vehicle," Jones said. "Our vendors said, 'You want biodiesel, it's going to cost you 20 more bucks.' Well, when it was time to do a major upgrade, we decided to do this and told our vendors, 'If you want this business, you're going to provide us with biodiesel-compatible parts [at a competitive price].'"
 
 To make the Duramax 6.6L, which will power GM's new models, compatible with B20, GM upgraded some seals and gasket materials to withstand the ester content of biodiesel and included an upgraded fuel filter that includes a coalescing element, the company stated. "It improves the separation of water that may be present in the fuel, because biodiesel can attract and absorb water. Also, additional heating of the fuel circuit was added to reduce the chance of fuel gelling or waxing that could plug filters."

 
 The diesel particulate regeneration system features a downstream injector that supplies fuel for the regeneration process. This greatly reduces potential oil dilution, important with using biodiesel. Downstream injection saves fuel and works better with B20 than in-cylinder post injection. 
 
 "B20 capability in our new heavy-duty trucks is the latest addition to a growing number of alternate fuel options offered by General Motors," said Mike Robinson, vice president, Environment, Energy and Safety Policy. "We are seeking different paths to fuel solutions in order to maximize efficiency, reduce emissions and minimize the dependence on petroleum."

GM: 2011 models B20 compatible

Posted February 8, 2010
 
 At an educational session on the first day of the 2010 National Biodiesel Conference & Expo in Grapevine, Texas, the National Biodiesel Board's technical director, Steve Howell, spoke about potential future adjustments to the ASTM quality specification for biodiesel, D6751. 
 
 Since D6751 is supposed to be process and feedstock neutral, Howell said emerging biodiesel conversion techniques may force an adjustment to the specification. The example he gave was LS9 Inc.'s process that uses microorganisms to convert sugars-not fats and oils-to methyl esters. D6751 specifies fats or oils as feedstocks to produce alkyl esters. "We may have to change the scope of the definition of biodiesel," Howell said.
 
 He also raised the question of whether minor components found in a sugar-derived biodiesel would be covered in the current ASTM specification. 
 

 In addition, Howell told the audience that up to 5 parts per million of biodiesel in the jet fuel spec has been approved by engine makers, which is being balloted in D1655. Jet fuel, and the obvious sensitivities of potential contamination from methyl ester trailback, is one of the major reasons biodiesel is not transported in pipelines. Some believe 5 ppm biodiesel contamination in jet fuel is not high enough, and Howell said a large program is underway to approve up to 100 ppm biodiesel in jet fuel. 
 
 The biodiesel industry may also see the addition of separate specifications for winter-grade and summer-grade methyl esters, much like petroleum diesel has No. 1 and No. 2 grades. "It's one option being discussed by the filter clogging group," Howell said. "If I were a betting man, I'd say it will be balloted this spring."
 
 Finally, ASTM will ballot a measure this spring to include the Cognis Quality Trait Analysis system, Ck2-09, which can analyze several parameters in only minutes with one drop of fuel. The American Oil Chemist Society passed the new test method already. According to Howell, "The wet chemistry tests will be maintained as the referee methods. Once this makes it through the complete balloting process and is an official option in D6751, the National Biodiesel Accreditation Commission will accept Congnis QTA system results for BQ-9000 compliance."

Future changes to biodiesel quality spec

Posted February 9, 2010
 
 USDA's projections for increased exports and crush in the current marketing year brought the projected U.S. soybean ending stocks for 2009/'10 down 35 million bushels from last month to 210 million bushels, in the latest World Agriculture Supply and Demand Estimates report released Feb. 9.
 
 Soybean exports are raised 25 million bushels to 1.4 billion as export shipments continue to exceed earlier projections. Although a record South American harvest is expected to reach the market in coming weeks, tight old-crop South American supplies resulting from last year's historic drought in Argentina continue to support U.S. exports. Soybean crush is raised 10 million bushels to 1.72 billion reflecting strong soybean meal exports and a lower soybean meal extraction rate. Soybean oil stocks are projected higher this month as the increased crush more than offsets a small reduction in the soybean oil extraction rate. 
 
 Soybean oil used for methyl ester is unchanged this month despite reduced production due to the loss of the $1 per gallon blending credit at the end of December. The recent Environmental Protection Agency announcement of final rules for the 2009 and 2010 biodiesel mandates is expected to result in offsetting production gains through the end of the 2009/'10 marketing year.

 
 The U.S. season-average soybean price range for 2008/'09 is projected at $8.70 to $10.20 per bushel, down 20 cents on both ends of the range. The soybean oil price is projected at 33.5 to 36.5 cents per pound, down 2.5 cents on both ends of the range. The soybean meal price is projected at $270 to $320 per short ton, up 5 dollars on both ends.
 
 Global oilseed production for 2009/'10 is projected at 433.7 million tons, up 2.1 million from last month. Global soybean production is raised 1.6 million tons to 255 million tons. Improved production prospects for South America account for most of the change. Soybean production for Brazil is projected at 66 million tons, up 1 million from last month due to higher yields. Soybean production is also raised for Paraguay and Uruguay. Global rapeseed production is raised this month due to a larger 
 projected crop for EU-27.
 
 Global oilseed trade is raised 0.9 million tons to 96.3 million tons, mainly due to increased soybean imports for China and Egypt. Higher global oilseed crush mainly reflects increased rapeseed crush in Canada, China, and EU-27. Global oilseed stocks are mostly unchanged at 71.1 million tons.

WASDE: Soyean exports continue to rise

Posted February 9, 2010
 
 Enterprise Holdings, owner of the Alamo Rent-A-Car, Enterprise Rent-A-Car and National Car Rental brand names, made a big announcement in support of biodiesel during day two at the National Biodiesel Conference & Expo in Grapevine, Texas. 
 
 The company announced its commitment to move its entire fleet of more than 600 shuttle buses to B20 within the next 5 years, beginning with incorporating at least B5 in all its buses this year. 
 
 Nine Enterprise Holdings markets will convert to using B20 in its shuttle buses immediately, said Lee Broughton, director of corporate identity and sustainability for Enterprise Holdings, and by the end of next year, 50 percent of Enterprise Holdings' shuttle buses will be running on B20. 
 

 Broughton said the company will have reduced its petroleum consumption by 420,000 gallons in the first year alone. 
 
 Also announced was the appointment of Richard Sayre as director of the Enterprise Rent-A-Car Institute for Renewable Fuels at the Donald Danforth Plant Science Center in St. Louis. 
 
 Sayre, former cellular plant and molecular biology professor at Ohio State University, and his team of 10 researchers will work to develop algae for biofuels, and will focus efforts in ways such as utilizing CO2 from coal-fired power plants to help grow algae, which would act as a carbon sink. Sayre said nutrients could be provided to the algae with water from sewage treatment facilities. 
 
 "We can use the contaminants as fertilizer," he said. "Algae doubles it biomass in 24 hours, and it can be harvested daily," he added-which captured the attention of the Department of Defense. 
 
 Sayre said algae's energy balance today is only about 2:1, but theoretically this can increase four to six times with research and development.

Enterprise Rent-A-Car commits to biodiesel

Posted February 9, 2010
 
 A panel of oil and pipeline company representatives discussing biodiesel took center stage during the general session on day two of the National Biodiesel Conference & Expo in Grapevine, Texas. 
 
 The topic of discussion was how oil and distribution companies will carry out RFS2's biomass-based diesel mandate, and what physical challenges exist in doing so. 

 
 A question that arose was whether investments should be made for terminal blending of biodiesel now, or if waiting for pipeline readiness was a safer bet. Jim Lelio with Kinder Morgan Pipeline Group said his company, which has been on the forefront of efforts to move biodiesel through the pipeline infrastructure, can already handle 100,000 barrels (4.2 million gallons) of B5 per day-a volume greater than three of the state mandates in place today. Kinder Morgan's total daily fuel throughput is 1.1 million barrels (46.2 million gallons). 
 
 The consensus from the panel was that state mandates are much less preferred than a federal standard such as RFS2. Dave Blatnik with Marathon Petroleum Co. LLC said state-by-state mandates hurt because companies have to invest millions of dollars in infrastructure for a relatively small volume of boutique fuel whose only market is that particular state. Also, fuel distribution systems are not set up to respect state lines. 
 
 Bruce Heine with Magellan Midstream Partners said companies that have to make big investments to satisfy state mandates expect those states to uphold whatever mandates they pass. He said it can be a financial hit when millions of dollars are spent to prepare for a blend requirement and then, due to unforeseen circumstances, the laws are changed or waivers are granted. Heine cited the recent Minnesota waiver for No. 1 B5 as an example. 
 
 With a standard such as RFS2 that requires obligated parties to blend certain amounts of fuel and does not dictate where or how, there is flexibility to strategically invest in their infrastructure as they see fit. 
 
 Heine said it doesn't make sense to make the infrastructure investments in terminals that have little diesel throughput, but rather companies should target investments where the demand is. 
 
 "By 2011, we have to have the infrastructure in place," Blatnik said, adding that five of Marathon's 67 terminals already have biodiesel blending capabilities. Magellan has 12 terminals set up for biodiesel. 
 
 It takes a minimum of nine to 12 months to prepare a terminal for biodiesel blending, said Heine, and that's if the effort begins at the right time of year. Lelio said he hopes it does not take that long to prepare a terminal for biodiesel. The investment cost to prepare a terminal for biodiesel is about $2.5 million to $3 million, Heine said, which includes biodiesel storage capacity of 5,000 to 10,000 barrels (210,000 to 420,000 gallons). 
 
 The question was asked to the panel whether obligated parties would be more interested in purchasing renewable identification number (RIN) credits rather than buying "wet gallons" of biodiesel. Mike Reed with Northville Product Services said, "It's better to break even or make a few cents with wet barrels" as opposed to purchasing RINs alone. Lelio made the point that the physical product will have to be used somewhere, and obligated parties shouldn't solely bank on buying RINs. Blatnik said Marathon will meet its obligations with wet gallons.

Oil companies talk biodiesel

Posted February 9, 2010

 
 During the 2010 National Biodiesel Conference & Expo in Grapevine, Texas, officials from U.S. EPA discussed several of the confounding issues resident in the final RFS2 rule-including feedstock tracking. 
 
 The final RFS2 rule does not require soy biodiesel producers to track the origin of their feedstock and provide regular reports to the agency, as was expected under the proposed rule, but producers using animal fats or used cooking oils will be required to do so beginning July 1 if they want to generate renewable identification number (RIN) credits. 
 
 Although producers using waste feedstock will have to keep feedstock supplier records and produce quarterly reports for EPA, Larry Schafer from the Diamond Group said the requirements are "not onerous." 
 
 Paul Argyropoulos from EPA's Office of Transportation and Air Quality said if a producer is using animal fats, for instance, "they would have to say, 'Yeah, this is the feedstock I use, and this is where I got it,'" but they would not have to track it beyond their supplier. 
 
 Producers using domestic crop oils will not have to track feedstock and provide reports to EPA so long as U.S. cropland acres do not exceed the 2007 baseline of 402 million acres.

RFS2: producers must track waste feedstock

Posted February 11, 2010
 
 Draft legislation to renew the $1-per-gallon biodiesel blend credit, part of the Senate jobs package, is "floating around" Congress, confirmed Manning Feraci, National Biodiesel Board's vice president of federal affairs. 
 

 It's a one-year extension-not a multi-year credit as many hoped-and the bill will not be officially introduced until the week of February 22 thanks to a virtual shutdown of the nation's capital for the rest of this week resulting from the second massive winter snowstorm within days that buried the city. Next week, Congress is out for a scheduled break so members can return to their home districts. 
 
 Feraci said it appears that the credit will be retroactive back to Jan. 1 and will likely receive bipartisan support. 
 
 The jobs package includes several time-sensitive measures such as extension of unemployment benefits, which expire Feb. 28, so Feraci is hopeful the legislation will be expedited through Congress and signed by the president very soon. "We're optimistic, but we still need your help," he pled to industry stakeholders at the 2010 National Biodiesel Conference & Expo in Grapevine, Texas.

Biodiesel tax credit in Senate jobs package

Posted February 11, 2010
 
 Prices paid for soy oil in the United States can be influenced by things as diverse as Malaysian palm oil yield cycles, sea surface temperatures off the coast of Peru and China's decision to build dry stocks, said Anne Frick, a senior oilseed analyst for Prudential Bache Commodities LLC, at Wednesday's general session of the National Biodiesel Conference & Expo in Grapevine, Texas. "The largest domestic oil-soy bean oil-is probably the most influenced by the international situation," she said. 
 
 Factors that include a short-term soy price rally are EPA's characterization of soy methyl esters as an advanced biofuel, likely increase use of soy for biodiesel because of its ready availability. Add to that the fact that this is the second year consumption has outpaced production-largely because of population growth, increased income, increasing usage for industrial practices and falling vegetable oil stocks-and prices could firm. 
 
 Although there are record soy supplies in South America this spring, Brazil contains a huge land mass that presents a logistical nightmare. There's a two lane dirt road to the northern port and trucks are often lined up for miles waiting to load ships at the southern port, Frick said. "Just because those soybeans are there, it doesn't mean they'll get to market. [Also], China is taking many more beans from the U.S. this year, and it's depleted our supply. Supplies will be at their lowest in several years."
 
 International forces that could push the market into a prolonged bearish cycle involve the fact that because soybeans are a meal-seed-60 percent of the value and 80 percent of the content comes from meal-demand derives mostly from the poultry and hog industries. Poultry output will be up this calendar year, but pork and cattle slaughters are likely to decline corresponding with slowed feed demand. In addition, meals eaten in restaurants are down, along with lard's usage as a baking and frying oil after continued efforts to eliminate trans fat from diets. 

 
 Heavy competition from other oils could also put downward pressure on soybean prices. "Palm oil dominates world trade," Frick said. Malaysia has its land pretty much planted and depends on yield increases to expand production volume. Indonesia, however, continues to expand its palm business on new acres. Volumes will continue to grow but at a modest rate. 
 
 An interesting aside-Malaysia and the U.S. have continued to negotiate a "nagging" free-trade agreement that began in 2006 under the Bush Administration. While it looks stalled, if this agreement were finalized Malaysia would obviously increase imports of its palm oil to the U.S., enjoying duty-free entry. 
 
 The most recent bull market for soy culminated with a 71 cents per pound surge in 2008, and then experienced a crash. About every 30 years soybeans reach a record high, after which they trade in a new and permanently higher price range. "I think that's probably going to be the case this time around as well," Frick said. 
 
 For now, prices have stagnated but the market may experience another rally before entering the bearish phase of the cycle.

Prudential: bearish on soy after short spike

Posted February 12, 2010
 
 Jet fuel is the most highly specified transportation fuel, but the airline industry has long recognized that a small amount of cross-contamination is unavoidable in a shared fuel system. Nevertheless, if biodiesel wants to achieve status as a pipeline fuel, it will be allowed to contribute only trace amounts of methyl esters in pipelines where different fuels cross. "I'm confident that we can get biodiesel in the pipeline system and that we can be successful," said Steve Anderson, Air BP fuels advisor.
 
 Biodiesel qualifies as an advanced biofuel under the U.S. EPA's final rule for the revised renewable fuels standard (RFS2). As its use grows in volume, status as a pipeline fuel will have to be achieved to improve margins and entice buyers. RFS2 will require "obligated parties" to use a certain amount of biodiesel, so while jet engine makers have finally approved 5 parts per million methyl ester contamination in aviation fuel, some companies are lobbying for approval of 100 ppm. 
 

 Biodiesel is already moved through pipelines in Europe, and the European Union currently allows up to 5 ppm in its EN 590 spec for jet fuel. But there has been concern over the potential for cross-contamination there. "We'll have problems at airports-I can guarantee-if we don't get this approval [before fatty acid methyl ester (FAME) is shipped through U.S. pipelines]," Anderson said. "We were close to shutting down Heathrow airport and you can imagine the amount of press that would have gotten."
 
 A memo from the Joint Inspection Group, a British organization committed to encouraging the "safe and cost effective best practices for aviation equipment and aviation fuel quality control and handling," reported in June 2008 that the "proactive" testing of jet fuel coming from multiproduct pipelines for biodiesel carryover revealed a problem in the fuel supply to Birmingham airport in the United Kingdom. 
 
 "As a result, a number of tanks at Kingsbury supply terminal and Birmingham airport were quarantined," JIG reported. "Once it was confirmed that the level of FAME in product was above the current 5ppm limit (concentrations up to 20ppm were measured in samples), concerned companies advised the affected airports to cease fuelling. This caused only a minor disruption to fuelling activities at Birmingham airport thanks to the availability of unaffected product from a different supply route."
 
 Despite contamination problems, oil companies that purchase FAME in the future will want to use the efficiencies of their pipeline assets to move volume, as this infrastructure is responsible for the efficiency of the American fuel distribution system. "This is a big deal," said Rob Woodford, member of the ASTM Board who works for the Explorer Pipeline Co. "Pipelines offer up to a 20 cent per gallon advantage over trucks, and would save $50 million for biodiesel producers if 1 billion gallons is transported on pipelines."
 The testing project involving FAME in jet engines (needed to precede the 100 ppm approval), however, has been a complicated, complex, multi-year episode involving millions of dollars, and a wide of variety of companies and organizations including, Boeing, Rolls-Royce, Green Earth Fuels, Exxon and the Kansas City Soybean Commission.
 
 One of the big questions that this monolithic investigation poses-"Does FAME cause engine deposits to form?" Deposit formation leads to increased maintenance and downtime and can be very destructive to engine components. "Many OEMS lease the engines to the airlines," Woodford said. "If an engine comes off the wing for maintenance, then the OEM is losing out. So they want to keep the engine on the wing for as long as possible."
 
 Woodford said that various fuels are often "interfaced" in pipeline transport following certain cycles. Jet fuel is often the first in the cycle, followed by diesel and fuel oil and then "cleaned up" by gasoline. This process ensures that jet fuel receives the least amount of cross-contamination "I'd like to have a dedicated system for jet fuel, unfortunately that's never going to happen," Woodford said. 
 
 Biodiesel would be interfaced in a similar way to diesel fuel, and the perfect combination of instruments and procedures are being developed to properly stage FAME in pipelines. One of the problems, however, with controlling cross-contamination is the lack of suitable and widely available test methods to measure low-level FAME content. "I need a quick test method so I can test FAME, then we can develop procedures and test methods to stage that material in the pipeline," Woodford said. "We know FAME trails back, it likes to stick to the pipe, so I need bench-top equipment that can tell me how much FAME I have in a distillate sample."
 
 In continuing efforts to complete the approval of 100 ppm FAME in jet fuel, Anderson advised attendees at the 2010 National Biodiesel Conference & Expo in Grapevine, Texas, that "If you want to see biodiesel take a foothold, you need to contact the OEMS and tell them that we need approval of 100 ppm FAME in jet fuel."

February 2010

Business Briefs

Business Briefs

Columns

SCR Systems Go Mainstream

Feeling the Effects

Featured

Europe's Diesel Portfolio

Canadians Backing Biofuels

Year of the SCR System

Plant to Pump Paradigms

February 2010.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

Business Briefs

Columns

SCR Systems Go Mainstream

Feeling the Effects

Featured

Europe's Diesel Portfolio

Canadians Backing Biofuels

Year of the SCR System

Plant to Pump Paradigms

February 2010