Maersk Line, the large Denmark-based liner shipping company that services customers all over the world, used more than 9 million tons of bunker fuel in 2009, and has set a corporate target to reduce its carbon dioxide emissions by "20 percent per container moved" by 2017. Maersk recently announced that it was testing biodiesel in hopes that the fuel could help achieve those goals. "To the best of our knowledge, we are the first to test biodiesel in a large container vessel," said Jacob Sterling of Maersk's sustainability team. Five business units are already carrying out tests on B5 to B7 blends to see how biodiesel reacts to Maersk's tanks and engines. Maersk is cooperating with a consortium of Dutch sub-contractors on this project, which is partly being funded by the Dutch government.

Mega-shipper begins biodiesel testing

Few words have been repeated more than "jobs" lately, as Congress has contemplated the reissuance of the federal biodiesel blender tax credit in the first and second jobs bills early this year. As you all remember, the biodiesel tax credit-along with many other tax extenders-was stripped out of the first jobs bill in February, leading to yet another setback and disappointment for the biodiesel industry just days after the national conference concluded. By mid March, right at the time we were taking this issue of Biodiesel Magazine to print, the Senate passed the $150-billion American Workers, State and Business Relief Act, in which the biodiesel tax credit managed to remain. Now, the House and Senate versions of this bill must be reconciled before it is presented to President Barack Obama for signing into law. 
 
 Tying biodiesel tax subsidies to job creation-or preservation as the case may be-turned out to be more controversial than biodiesel stakeholders might have thought imaginable. David Swenson at Iowa State University cautioned that a 30 MMgy biodiesel plant (and blender) would claim $30 million in federal tax subsidies from the blender credit alone, and that a biodiesel plant of this size would only support about 30 jobs-so each biodiesel job would "cost" around $1 million. When Biodiesel Magazine reported on this, a flurry of emails, letters to the editor and comments were received that admonished Swenson's line of reasoning, offering alternative interpretations of what the federal blender credit means to our economy and green-collar job preservation. We cover this timely story in a featured article on page 22, called, "JOBS: Judgments on Biodiesel Stimulus." Check it out and feel free to let us know what you think. 
 
 Even though jobs and reissuance of the biodiesel tax credit have taken center stage in recent weeks, the theme of this month's issue is biodiesel purification. It's a new theme I wanted to develop for the 2010 editorial calendar shortly after becoming editor last year, mainly because it is such an important part of the biodiesel production process that ultimately determines whether the fuel meets its quality specification. Our featured article, titled, "Crystal Clear Fuel," in which we summarize some of the different products and techniques available today for producers to ensure their fuel meets the increasingly stringent biodiesel quality spec, begins on page 26. To round out this month's theme, Al Schultz from Dow Chemical Co. offered to write the Talking Point column on page 39, called, "Biodiesel Purification Options." 
 
 Lastly, I wanted to highlight the battle going on in Iowa regarding a state B5 mandate. Money from the trucking firms and Big Oil is being spent on a serious campaign against the measure under the guise of a consumer advocacy group called Iowans for Consumer Fuel Choice. The group claims it is not against biofuels, but it opposes biofuel mandates. It is scaring legislators into believing that if over-the-road truckers passing through Iowa are forced to buy B5, then those truckers will make a concerted effort to refuel out of state, causing Iowa to lose millions in fuel sales. The group has been citing fuel costs in Minnesota, where a B5 mandate exists, stating that fuel costs in Iowa would rise if a biodiesel mandate went into effect "just as it has in Minnesota." But there is disagreement with those numbers, and some say Minnesota diesel fuel costs between May 1, when the mandate in Minnesota went from B2 to B5, and Dec. 31, when the federal tax credit lapsed, were virtually the same as they were in Iowa during that same time period-perhaps even a tenth of a percent cheaper, according to Monty Shaw with the Iowa Renewable Fuels Association. Read more about this issue on page 10 of the Industry News section.

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Biodiesel Jobs and Purification

An Iowa State University genetics professor is using a $4.37 million grant to stack traits in algae, a process of genetic modification typically performed on common farm crops to increase production and resist insects. Martin Spalding, ISU genetics professor, received the U.S. DOE grant as part of the American Recovery and Reinvestment Act, and will use it to focus on genetically manipulating one type of alga, Chlamydomonas, whose genome has already been mapped. Spalding hopes stacking Chlamydomonas' desirable traits will lead to more oil production and thermal resistance. "We have a sequenced genome, we understand the metabolism, and we have the tools available to us to work with this alga," Spalding said. "Rather than look for an alga that produces trait X or Y and then trying to adapt each new strain to production, which is a very difficult process, we are manipulating Chlamydomonas to meet X and Y." The study will last three years.

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ISU to begin stacking traits in algae

Diesel engine maker Cummins Inc. agreed to a settlement of $2.1 million in penalties for violations to the Clean Air Act that occurred between 1998 and 2006, the U.S. EPA and Justice Department announced Feb. 22. The complaint alleged Cummins shipped more than 570,000 heavy-duty diesel engines to vehicle equipment manufacturers nationwide without proper pollution control equipment required by CAA, such as diesel oxidation catalysts and diesel particulate filters. 
 
 Engine manufacturers must prove through testing that their engines meet emissions standards set by EPA, and acquire certificates of conformity stating such. According to the complaint, Cummins tested the engines with the proper pollution control or aftertreatment devices to meet the standards, but failed to include those devices with the engines when they were shipped to the vehicle manufacturers. Cummins instead relied on the vehicle manufacturers to purchase and install the correct aftertreatment devices. 
 

 The settlement also requires Cummins to recall and retrofit approximately 405 engines that reached end-market consumers without the correct equipment. EPA estimates that Cummins' actions resulted in approximately 167 excess tons of nitrogen oxides and hydrocarbon emissions, and 30 excess tons of particulate matter emissions over the lifetime of the nonconforming engines. The effects of the excess emissions will be mitigated by Cummins through permanent retirement of emission credits equal to the excess tons of pollution.

Cummins pays penalty for EPA violation

The numbers are in, and January sales of sustainable palm oil to processors and retailers matched production by certified suppliers for the first time, according to the Roundtable on Sustainable Palm Oil. Nearly 120,000 metric tons of sustainable palm oil, or matching certificates, were traded by either UTZ Certified or GreenPalm, bringing market uptake for January to 98 percent.

Sustainable palm oil sales match production

Chemists at the University of California Davis developed a new process that could increase biodiesel yields from oilseed crops by nearly 25 percent. The method converts both plant oils and carbohydrates into biodiesel in a single process and should also improve the fuel's cold weather performance. The new process converts carbohydrates into chemicals called levulinic acid esters at the same time and in the same reactor that the oils are converted to fatty acid esters, resulting in a fuel that UC Davis researchers say performs better at low temperatures than biodiesel. The boiling range is similar but the fuel is thinner. "Our hope is that this blend of levulinate esters and biodiesel would perform better over a wider range of temperatures than biodiesel," said Mark Mascal, UC Davis chemistry professor. Costs of the new process may be somewhat higher than for conventional biodiesel production, but should be offset by improved fuel yields and performance, he said. The researchers are partnering with Bently Biofuels of Minden, Nev., to test the performance of levulinate/B100 blends.

UC Davis process increases biodiesel yields, performance

Australia's Jatoil Ltd. announced in March it had formed a new Asian holding company in Singapore called JATenergy Holdings, which will directly own the company's 70 percent investment in a jatropha-to-biodiesel farm project in central Java called PT Jatoil Waterland, in addition to Jatoil's stake in a Vietnam-based biofuel joint venture.

Jatoil forms Singapore subsidiary

With a July 1 date looming, German biodiesel producers are preparing to track feedstock from field to fuel to assure sustainable agriculture practices are upheld under the EU's Renewable Energy Directive, and to continue claiming government subsidies. According to German oilseed promotion organization UFOP, REDcert GmbH is a certification system developed by several stakeholder associations to facilitate compliance with the EU directive.

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Germany prepares for feedstock tracking

On Feb. 3, Big Island Biodiesel LLC, a Pacific Biodiesel Inc. project, marked the escrow closing of its Keaau, Hawaii site with a traditional Hawaiian blessing. The crowd of 100 in attendance included residents, partners, contractors and federal, state and local officials.  The Big Island Biodiesel facility is scheduled for completion in early 2011. With a capacity of more than 8,000 gallons per day, Hawaii's newest biodiesel project will utilize the latest multifeedstock, zero-waste process technology developed by Pacific Biodiesel Technologies. Adhering to the model of community-based commercial biodiesel production, Big Island Biodiesel ownership includes many members of the local community.

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Big Island Biodiesel blesses escrow closing

The biodiesel industry is continually searching for new outlets of fats, oils and grease (FOG) that producers can tap into. To that end, the Fairfield, N.J.-based company, Renewable BioSystems LLC, has recently licensed the North American rights to make and market what it dubs "advanced oil extraction" units with "significant waste-to-energy conversion metrics." 
 
 The oil extraction machine was originally developed in England, and three of these units are operating in the U.K. and Germany today, one of which is in use at an existing biodiesel plant. Peter Behrle with Renewable BioSystems told Biodiesel Magazine that the key to the oil extraction devices is their maximization of oil release from any number of feedstocks such as livestock offal, food waste, fish residues and other prevalent wastes. 
 
 Behrle said these machines do more than just centrifugation though. "It's about particle size reduction, heat and centrifuging," Behrle said, adding that biodiesel producers are more familiar with vertical centrifuges for liquid-liquid separation than horizontal centrifugation, which Renewable BioSystems' machines employ. 
 
 The company isn't necessarily suggesting biodiesel producers go out and buy one of these units and start accepting solid food wastes at their plants though. "It's not easy in terms of getting permitting through to begin accepting food waste," Berhle said. 
 For biodiesel projects under development or for existing producers located next to a slaughterhouse or food processing facility, however, Behrle said, "We stress a co-location strategy for biodiesel producers." By this he means negotiating a deal with the facility to locate one of these oil extraction units on-site, from which the biodiesel facility can arrange a steady supply of feedstock for its operations. 
 
 Size of the units varies depending on need, and throughput ranges from 3 to 15 metric tons per hour. Behrle said the price tag ranges from $1.5 million to $3 million. 
 
 The company stated that 95 percent of any given material's "fat" content is extracted as oil. For reference, Renewable BioSystems said that general food waste typically contains 8 to 26 percent fat/oil content; dough and pie waste, 26 percent; dissolved air flotation sludge, 8 to 30 percent; swine bones, 12 percent; chicken offal, up to 34 percent; swine offal, 24 percent; and lamb offal, 32 percent.

Renewable BioSystems' oil extraction machines, which employ particle-size reduction, heat and centrifugation, are sized to process between 3 and 15 tons per hour. PHOTO: RENEWABLE BIOSYSTEMS LLC

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Oil totes are filled and sent to their destination, such as a nearby biodiesel plant for further cleaning and processing into fuel. PHOTO: RENEWABLE BIOSYSTEMS LLC

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Extraction device may increase FOG supplies

Contract negotiations are still being finalized for the arrangement between Elevance Renewable Sciences and Renewable Energy Group Inc.'s 30-MMgy Central Iowa Energy biodiesel refinery in Newton, to co-locate an olefin metathesis demonstration unit with the existing plant for production of a diverse line of biochemicals, renewable jet fuel and enhanced biodiesel. Particular details on the venture, however, are still lacking. Andy Shafer, Elevance executive vice president of sales and marketing, said this is because the company is "managing expectations" of the project until all the pieces in the contract are finalized. 
 
 Olefin metathesis is a process that won its three developers-Yves Chauvin, Richard Schrock and Robert Grubbs-the 2005 Nobel Prize in Chemistry, and is applauded for its novel application in organic synthesis with use of ruthenium-based catalysts (also called "Grubbs' catalysts"). 
 
 Shafer said the process involves feedstock pretreatment, followed by metathesis and distillation, after which there are different routes to make a number of products, including a variety of olefins for surfactants found in detergents; paraffins for renewable jet fuel; and esters for biodiesel, biobased lubricants and other oleochemicals. Once the technology is in place, Shafer said, it's just a matter of how the plant diverts the stream in order to maximize profitability, taking advantage of existing chemical markets. Elevance refers to biodiesel made from metathesis as "enhanced" because its shorter carbon chain gives the fuel better cold flow properties than traditional biodiesel. 
 

 "The technology is commercial today; we're running metathesis by the truckload batch," said Shafer, who added that Elevance sells platform chemicals produced via olefin metathesis to Dow Corning for products such as Victoria's Secret body lotions and soy candle waxes. "But what we haven't done yet-and what we will do at Newton-is commercialize it at an integrated plant site."
 
 The project builder and equipment provider is Technochem. Sanjeev Agarwal, Technochem president, said, "We're providing technical support, equipment, construction, and building of the whole demonstration plant. Details are being worked out now and we hope to have the project complete in a year, but it's hard to predict." The project is different from processes designed and built by Technochem in the past, but Agarwal said it will use familiar components such as distillation. "We're mechanical and chemical engineers, so this project fits in nicely with our areas of expertise," Agarwal told Biodiesel Magazine. "The project is challenging in the sense that it is a new technology. It's exciting to see biodiesel technology develop in this type of application, producing multiple products from the same feedstock, just like a petrochemical refinery can." 
 
 In 2007, Newton's local economy was devastated when the Maytag manufacturing plant closed. Derek Winkel, general manager of Central Iowa Energy, said, "This project is exciting, both from an economic development standpoint-getting more jobs here in Newton-and from a technology standpoint."

9-Decenoic Acid is just one of the platform chemicals olefin metathesis can produce, from which many other specialty products can be refined. SOURCE: ELEVANCE RENEWABLE SCIENCES

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Newton plant to become biorefinery showcase

Today, 90 percent of Iowa's over-the-road haulers and diesel pickup truck drivers who pull into retail stations to refuel do not have the option of purchasing biodiesel blends, said Monty Shaw, executive director of the Iowa Renewable Fuels Association. "In Iowa, biodiesel is locked out of the infrastructure," Shaw told Biodiesel Magazine. "That's what this bill, Senate File 464, is all about," he said, referring to the controversial piece of state legislation that seeks to mandate a B5 blend in all the diesel fuel sold in-state. 
 
 In early March, a number of false or misinformed reports were circulating that said the biodiesel bill was dead. Randy Olson, director of the Iowa Biodiesel Board, used the word "erroneous" to describe those reports. Olson testified before the House Agriculture Committee on March 1 in favor of the proposed Iowa Biodiesel Fuel Quality Standard measure, or SF 464, which passed the state Senate with bipartisan support last year-by a margin of more than 30 votes-and now awaits House committee approval before a vote on the House floor can occur. As the legislation gets closer to a vote, debate over the measure has heated up tremendously. 
 
 One of the major opposition groups to the mandate is so-called consumer advocacy group, Iowans for Consumer Fuel Choice. The group is funded by the Petroleum Marketers and Convenience Stores of Iowa, the American Petroleum Institute, the Iowa Motor Truck Association and the teamsters, among other conventional anti-biofuel groups. One of the ICFC's arguments against an Iowa biodiesel mandate is that state mandates are unnecessary when we have a federal mandate. "State mandates will corrupt the free market system and place unnecessary burden on Iowa consumers and Iowa retailers," said Delia Meier, senior vice president for Iowa 80 Truck Stop and an ICFC representative. This argument, however, does not take into consideration that obligated parties under the revised renewable fuels standard will use biodiesel produced in Iowa to sell into population centers where diesel demand and terminal throughput is high-not in Midwest states such as Iowa. 
 
 Another anti-mandate tactic employed by ICFC is continued reference to Minnesota's diesel fuel costs and technical issues surrounding its state mandate, which increased from B2 to B5 on May 1, 2009. ICFC stated that a mandate in Iowa will raise diesel prices as it has in Minnesota, by 7.5 cents a gallon. "I'd love to see that study," Shaw said, adding that those numbers are not accurate. "The numbers they use leave out some important facts such as RIN (renewable identification number) values, wholesale prices, and different state taxes." Shaw said the IRFA's study showed that when all factors were considered, a very different result was obtained. "We found that in Minnesota, from May 1, 2009, when the state went to from B2 to B5, to Dec. 31, when the federal tax credit lapsed-less state tax differences-diesel fuel was actually cheaper in Minnesota than in Iowa by about a tenth of a cent per gallon. So some of these pricing claims are just [inaccurate]." 
 
 The supposed higher fuel costs from a B5 mandate in Iowa spurred the ICFC to state in a March 1 release that, "Representatives from the Iowa Motor Truck Association warn that more than 75 trucking companies have said if forced to buy biodiesel in Iowa, they will purchase their fuel outside the state," even though Iowa borders Minnesota and Illinois where strong biodiesel mandates are in place. Brenda Neville, president of the IMTA, said, "Bypassing Iowa retailers is not an empty promise. Motor carriers typically use an onboard computer program to help plan travel routes and identify the most cost effective refueling options. Given fuel capacity to travel as many as 1,200 miles per tank, drivers can easily opt to refuel elsewhere." 
 
 Decker Trucking, which participated in the Two Million Mile Haul-a biodiesel performance study that included carriers, original equipment manufacturers and biodiesel producers-has reportedly changed its stance on biodiesel now that a mandate looms. Decker told Biodiesel Magazine in 2007 that it was going to help promote the use of biodiesel in the trucking industry, and that it had used the fuel with positive results. 
 
 "The main thing is we need to get credible information out there to the people [of the fleet industry and media], and not just the rumors or false information that has been circulating in the market," said Dale Decker in the 2007 article. "We're going to get [the information] out there and tell people what we're actually finding. Once people get our truthful and accurate information from our test to make a decision, it's a no-brainer." 

 
 Nevertheless, the trucking company sent a very negative letter to the IMTA last month, saying that biodiesel did not perform well in cold weather, that its lubricating benefits were minimal and that the fuel was not cost effective. Renewable Energy Group Inc. of Ames, Iowa, which also participated in the Two Million Mile Haul, put out a letter that catalogued all of the positive comments Decker has made in support of biodiesel in recent years, asking "What's Changed?"
 
 Another aspect of SF 464 is bumping up the retail tax credit from incentivizing a B2 and higher retail blend to B10 and higher retail blends, to avoid giving a tax credit to the proposed mandated blend of B5. The bill's language reads: "The amount of the tax credit is three cents multiplied by the total number of gallons of biodiesel fuel designated as B10 or higher." 
 "If we want to keep a biodiesel industry in Iowa," Shaw said, "then we need to pass this bill."

REG helped fund the building of a 30,000-gallon heated biodiesel storage tank at BP's Ottumwa, Iowa, terminal, the only one of six BP terminals in Iowa to offer biodiesel blending. PHOTO: RENEWABLE ENERGY GROUP INC.

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Iowa B5 legislation draws heated debate

Ion exchange resins have been utilized for years by biodiesel processors for "polishing" fuel after the transesterification process to remove various impurities and distribute absolutely the cleanest fuel possible-now they are being marketed as a complete substitute to traditional reactors. 
 
 The biodiesel industry has been looking for ways to replace traditional conversion methods, said Purolite, the resin manufacturer headquartered in Bala Cynwyd, Pa. The company has announced a deal with start-up technology firm Transbiodiesel to manufacture and market enzyme-loaded ion exchange resins meant to replace the use of sodium methylate and provide "the simultaneous esterification of free fatty acids and transesterification of fats and oils."
 
 The system improves conversion economics in several ways-the absence of emulsifying soaps makes the fuel easy to separate from the glycerin, and low-grade oil feedstocks with FFA content as high as 100 percent can be processed, according to Transbiodiesel. Traditional caustic transesterification results in large amounts of alkaline toxic waste and complexity in downstream processing. Low-grade oils cannot be used without significant pretreatment, the oil needs to be heated, and catalysts are typically not reusable.
 
 "At present, chemical catalysts are used in the production of biodiesel," stated the Shfar-Am, Israel-based biodiesel start-up. "These catalysts have significant environmental and operational drawbacks with substantial impact on cost-effectiveness. Use of enzyme-based catalysts eliminates these drawbacks." 
 
 At this point, Transbiodiesel has implemented its technology at Zohar Dahlia, an Israeli producer of detergents, which will make biodiesel and use the high-quality glycerin coproduct as a component in its liquid soaps. 
 
 "Our collaboration with Purolite has been going on for over a year now," said Sobhi Basheer, founder of Transbiodiesel. "After a few months of local testing at small plants, the [technology] will be ready for the conventional market." 

 
 In addition, hydroxide is highly sensitive to water saponification and the glycerol generated as byproduct is of varying quality. TransBiodiesel's enzyme-based catalyst does not lead to toxic waste, is reusable in multiple batches, allows for the use of low grade oils, requires no heat and generates high-quality glycerol-all for less capital investment and decreased production costs compared to conventional processes. 
 
 With the introduction of this patent-pending technology, significant economic and practical advantages are gained. "Our enzyme-loaded ion exchange resin replaces the use of sodium methylate and provides the simultaneous esterification of free fatty acid and trans-esterification of fats and oils," Purolite said. "This enables biodiesel producers to overcome many of the downstream issues currently encountered, [and] economics are improved in several ways. The resulting biodiesel is easy to separate from crude glycerin because of the absence of emulsifying soaps. Crude glycerin is significantly free of contaminants and can be more readily refined."
 
 The U.S. DOE announced last fall that this project was part of a program for U.S.-Israel cooperation on clean energy technology. With financial support from DOE and the Israeli Ministry of National Infrastructures, the Bilateral Research and Development Foundation Energy Executive Committee selected four cooperative clean energy projects in the United States and Israel. This initiative awarded approximately $3.3 million in U.S.-Israel funding for these four projects.
 
 The four projects selected for funding help address critical shared bilateral energy-related goals, while focusing on commercializing DOE technologies. The BIRD Foundation will assist by attracting and incorporating private sector cost-sharing. The Purolite-Transbiodiesel project was selected for an award of up to $700,000. "This project seeks to design a biocatalyst comprised of methanol-resistant lipase immobilized on a cost-effective resin for the production of biodiesel at commercial scales," DOE said. "Lipase biocatalysts offer significant advantages over traditional catalysts used for biodiesel production including lifecycle efficiency gains and consistent product quality, but are currently high-cost and suffer from short operation lifetime as they are degraded during the biodiesel production process."

Adrian Burt, a senior researcher with Purolite, tests enzyme-loaded ion exchange resins in the laboratory. PHOTO: THE PUROLITE CO.

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Purolite, Transbiodiesel to market nonchemical-based reactors

Brazil's largest biodiesel producer, Ecodiesel SA, recently outlined components of its corporate strategy, including the sale of obsolete equipment and the consolidation of its corporate offices in the capital city of Sao Paulo. 
 
 Ecodiesel is a vertically integrated enterprise maintaining six operational plants with a combined annual production capacity of 640,000 metric tons (about 192 MMgy) in Floriano, Crateús, Iraquara, Porto Nacional, Itaquí and Rosário do Sul. Preparation of the transesterification plant projects, as well as the supervision of construction, assembly and operations, is handled by Tecnologias Bioenergéticas Ltda, a pioneer in registering patents for the biodiesel production process. 
 
 Also operating farms and crushing compounds, Ecodiesel recently decided to sell its farms in the states of Piaui, Ceara and Minas Gerais, with a total area of 23,232 hectares (57,408 acres), along with its crushing equipment at Crateus, which is obsolete and idled. "These operations do not fit with the company's new requirements," Ecodiesel said. 
 
 Both Ecodiesel and the Argentine Chamber for Renewable Energies spoke out against certain domestic fuel and agriculture policies in their respective countries. In Argentina, the government charges biodiesel exports at 20 percent. In addition, companies also pay a 35 percent income tax on its profits, and are further burdened by the fact that the government has begun to delay reimbursements due from certain incentives.
 

 Fuel industries in Brazil are heavily controlled by the government, and biodiesel has been bought and sold at public auction where the volume needed to fulfill the nation's blend requirement is bid on by oil companies. "Biodiesel producers should start competing directly among themselves for sales and for clients, particularly fuel distributors and large consumers," stated Ecodiesel, which must navigate some unique national fuel programs when it comes to its operations, along with competing against state-owned enterprises. 
 
 Biodiesel has a become a serious and controversial business in South America, and one that emphasizes the quarrels between developing countries and industrial powers that reportedly want to maintain the status quo. 
 
 In December 2008, the European Union's Climate Energy Legislation Package established that biofuels used in Europe must have a reduction of greenhouse gas (GHG) emissions of no less than 35 percent when compared to fossil fuels. It subsequently announced that palm oil-based biodiesel had been found to reduce GHG emissions by 56 percent; sunflower seed oil by 51 percent and rapeseed oil by 38 percent, all in compliance with the new directive. "Soy oil biodiesel was found to reduce GHG emissions by only 31 percent, below the minimum threshold, thus blocking out Argentine biodiesel unless specific certification is obtained," ACRE said. 
 
 Argentina has developed a strong and extremely efficient biodiesel industry. It has natural competitive advantages due to the richness of its soils, no-till farming methods and the clustering of the soy processing industry along the Paraná River in Santa Fe province, ACRE said. Ecodiesel similarly asserted that Brazil, because of its geoclimatic characteristics and potential to diversify its feedstock portfolio, is positioned to take the lead in world biodiesel sales. This is a situation that EU producers do not want to see come to fruition. 
 
 "But perhaps most damaging to the industry and establishing a dangerous precedent for all emerging economies, European industry now claims that our economic development model is illegal, suggesting we should remain a basic commodity producer in a classic Third World model and periodically threatening international legal action to ensure that this occurs," ACRE said. "Even though the European industry has been operating at approximately half of installed capacity for the past two years, it continues to invest, increasing capacity by 56 percent in 2008 and 31 percent in 2009."
 
 The European Biodiesel Board's position is that Argentine exports to EU increased dramatically from less than 5,000 tons in July 2008 to almost 100,000 tons per month in July 2009, featuring a twentyfold increase. Argentine exports in 2009 were expected to exceed 1 million metric tons compared to only 70, 000 tons in 2008. 
 
 Such a dramatic increase in exports cannot be achieved through normal industry practices only. This surge in Argentine biodiesel exports to EU is, in fact, driven by a regime of differentiated export taxes (DETs). "This system creates a clear distortion, as it creates an artificial incentive for the production and export of the finished product biodiesel rather than its raw material." EBB said. "In [our] view, it would be appropriate for Argentinean authorities to withdraw at the earliest opportunity the DETs regime currently applied on soybean products and biodiesel."
 
 ACRE said that would be ridiculous. "Argentine soy-based biodiesel was going to become a problem to their market given its efficiency-the soy needed to produce the nearly 1 million tons of biodiesel exported to Europe in 2008 grows within a 120-mile radius from the city of Rosario in Santa Fe province, and the area surrounding Rosario concentrates the bulk of the soy crushing industry." 
 
 Argentina's industry cluster is large, modern and highly efficient. It can crush 150,000 tons of soy a day with which it produces biodiesel feedstock and livestock feed. "Clustering and efficiency like this doesn't exist in any other biodiesel market in the world, and this is unlikely to change as long as first generation biodiesel (i.e., made from edible oilseeds such as soy, rapeseed, sunflower, etc.) remains popular," ACRE said. "No amount of German industrial efficiency can beat it."

The Argentine soy processing industry is clustered along the Paraná River in Santa Fe province. PHOTO: NASA

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Brazil's Ecodiesel restructures,  Argentine Renewables protests EU protectionism

Fuel is our business. We know nothing moves without some source of power or energy. For our industry, the power to grow is fueled by the financial investments made possible through the NBB. The examples are almost limitless: 

 
 Health effects testing supported by our trade 
 association allows biodiesel to be a legally traded 
 commercial fuel
 
 Outreach efforts grew the fuel to retail and 
 supply markets
 
 Regulatory efforts helped secure the original 
 biodiesel tax incentive
 
 Engine research demonstrates the performance 
 benefits and carbon mitigation of biodiesel

 
 Life-cycle analysis proves biodiesel sustainability
 
 Communications has captured public opinion 
 and counteracted misinformation that threatened 
 to undo the industry
 
 Coordination efforts have placed biodiesel at the 
 forefront of air quality efforts
 
 The list could fill up this entire magazine, but the exponential growth through 2008 was powered by these efforts. The strategic vision NBB members implemented cut the path for biodiesel growth and expansion. 
 
 A poignant example is RFS2. The initial rule all but excluded biodiesel. In response, NBB launched an intensive information and fact-finding effort. A team of industry experts waded through the 400-plus page U.S. EPA rule, offering insight and guidance and identifying weaknesses and inaccuracies. At the same time leaders in land use trend analysis, economic forecasting and environmental impacts assembled fact-based data to counter false assumptions included in the proposed rule. That effort ultimately provided the reliable scientific data that turned the tables and ensured biodiesel qualified to participate in the program. 
 

 Now our industry is at a transition point. For the first time, annual U.S. biodiesel production decreased. The factors that led to the downturn were many, but our response must be singular. We must continue to stand behind biodiesel. We must continue to facilitate the investments in research, outreach, and coordination that clear the way to new markets and expanded use. We must recognize that now, more than ever, the foundation supporting the fragile industry must be maintained. 
 
 Funding for critical programs is derived from several resources. Not any one would be as effective without the others. All are absolutely essential as we move towards our "5x15" goal and beyond. Every day more users, customers, and supporters are getting aboard the biodiesel bandwagon and ongoing support is critical to fuel the industry to reach its full potential.

Funding through NBB continues to be an important factor to power industry growth. 

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Fueling the Biodiesel Bandwagon

A recent settlement marks a win for the environment and customers as the NBB, with the support of the National Oilheat Research Alliance, successfully defends the registered Bioheat trademark. 
 
 "Cleaner burning Bioheat heating oil is at work for thousands of customers who enjoy the benefits of an environmentally friendly heating alternative," said Paul Nazzaro, petroleum liaison for NBB. "Protecting the Bioheat trademark is about protecting the integrity of the product on behalf of the entire industry and the more than 300 dealers who offer the fuel."
 
 Earlier this year NBB initiated a lawsuit against Tarm USA Inc. a New Hampshire company using the term BIOHEATUSA in relation to an unrelated product. In a recently released settlement, Tarm USA Inc. agreed to discontinue use of the term within six months. In addition, the company agreed to discontinue use of their domain name, which also included the Bioheat trademark. 
 
 The NBB obtained a federal trademark registration on Bioheat and launched the official logo in 2006. This trademark was licensed to NORA, which has sublicenses with hundreds of retailers.
 
 As Bioheat heating oil use grows, it is critical that the product and its name remain reliable in an ever-changing marketplace. In trademark cases, it is the registered trademark owner's responsibility to defend against potential use infringements. Protecting the Bioheat trademark gives consumers assurance and confidence they are using a renewable fuel to heat their homes.
 
 "We are dead set on protecting the Bioheat identity," said Nazzaro. "Bioheat heating oil offers a better alternative for the environment and for consumers. The fuel and this settlement is a win for the environment, the industry and consumers using cleaner burning Bioheat heating oil."

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Environment, consumers win with Bioheat trademark victory

The revised renewable fuel standard (RFS2) is likely to be the single largest factor affecting the biodiesel industry in the coming years. The new procedures, new processes and new paperwork associated with the rule threatened to overwhelm even experienced biodiesel stakeholders. 
 
 NBB quickly assembled the critical data members need to take part in the program and coordinated a series of top-notch, in-depth RFS2 training sessions at no charge to NBB members. Training was offered first in a Webinar format and then introduced around the country as one-day workshops. 
 
 "We worked with the U.S. EPA and regulators to guarantee that our members had free access to the most accurate, current and detailed information possible," said Jordan Thaeler, NBB technical program manager. This training covered RFS2 registration, reporting and record-keeping requirements, as well as an overview of the EPA Moderated Transaction System and renewable identification number, or RIN, tracking. 

 
 Sessions went into significant detail to ensure NBB members are prepared to participate in the program. All programs were offered free to NBB members.

NBB provided free, training to members interested in learning more about how to take part in the RFS2 program. 

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NBB hosts RFS2 training

Eight thousand comments were just the beginning for the NBB's state-directed grassroots campaign program. Since November, the group has tackled the federal regulatory process head-on to support the biodiesel tax incentive.
 
 "Banging the pot is a long standing tradition in D.C.," said Manning Feraci, NBB vice president of federal affairs. "The grassroots effort led by NBB and enacted by state team leaders and biodiesel supporters played a significant role to solidify support for the extension." 
 
 First formed last summer to organize biodiesel supporters' call for changes to the RFS2 draft rule, NBB's grassroots outreach program is centered on state team captains. Team captains have volunteered untold hours coordinating efforts in each of their respective states. 
 
 Collectively the group has directed efforts resulting in hundreds of news articles and editorials, countless calls to elected leaders' offices, biodiesel plant tours, letters from mayors and local stakeholders, and press releases and statements calling for action. This is in addition to the successful campaign that generated 8,000 comments to the EPA this past summer. 
 
 People and their experiences are at the heart of any grassroots effort. NBB's program has enabled those experiences and related stories to make their way directly to elected leaders and into the halls of the Capitol. It remains an effective outreach tool and an important component of advocacy. NBB will continue to facilitate these efforts as a tool to strengthen and support ongoing policy efforts.

Fertilizing grassroots bounty

Support for biodiesel continues to grow as both Enterprise Holdings Inc. and General Motors Corp. unveiled big news at the National Biodiesel Conference & Expo.
 
 GM told biodiesel supporters that the company's 2011 model year Duramax 6.6L turbo diesel engines will be fully compatible with B20. The news covers all 2011 GM heavy-duty products including Chevrolet Silverado, GMC Sierra, Chevrolet Express and GMC Savana.
 
 GM joined Ford and Chrysler in formalizing its support for B20. The three companies produce more than 80 percent of the light diesel vehicles sold in North America.
 
 "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, GM vice president of 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."

 
 North America's largest car rental company, Enterprise Holdings, announced plans to convert airport shuttle buses in nine markets to 20 percent biodiesel. The move is a first step toward the company's goal of converting its entire bus fleet to B20 over the next five years. 
 
 The company expects to complete the conversion to B5 by spring, with at least 50 percent converted to B20 by the end of next year. Enterprise Holdings Inc. is the parent company for Alamo Rent-A-Car, Enterprise Rent-A-Car and National Car Rental. 
 
 "This investment in biodiesel follows our commitment to our customers and our business to use our fleet to help grow the clean fuel market," said Lee Broughton, director of corporate identity and sustainability for Enterprise Holdings. "By embracing alternative fuels and engine technologies they have greater opportunity to become commercially viable. Biodiesel's benefits to the environment support our commitment to environmental stewardship, as well as our sustainable approach to managing our business for long-term success."
 
 As the largest biodiesel event in the nation, the conference is a great venue for major biodiesel news. Make plans now for Phoenix in 2011.

Enterprise Holdings and General Motors both chose to launch major biodiesel news at the National Biodiesel Conference & Expo.

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Breaking news makes debut at NBB conference

If information is power, biodiesel stakeholders are in luck. NBB has assembled a wide variety of handouts and resources to answer just about any biodiesel question out there. Some of the most popular pieces include:
 
 Biodiesel Myths: Busted-this folded half-page brochure presents information in a myth/fact format and addresses some of the most pervasive myths about the fuel.
 
 Biodiesel Sustainability Brochure-this folded half-page brochure outlines biodiesel's environmental benefits, support for green jobs, and emissions benefits. The handout provides a useful overview for policy leaders and decision makers. 
 
 Biodiesel for a Better Future-this larger tri-fold brochure presents a broad overview of biodiesel. It defines the fuel and offers a basic look at biodiesel users and benefits, and is a great introductory piece for the fuel. 
 
 These handouts and many others are available to NBB members and stakeholders. As supplies allow, members will not be charged for copies. To see a full list of handouts and resources visit: http://www.biodiesel.org/multimedia/print/.

NBB offers a wide range of handouts and resources featuring the latest biodiesel information. 

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Info-to-go is a click away for NBB members

In response to member comments, Ed Hegland, NBB chairman, has appointed a Producer Advisory Task Force. Vice Chairman Gary Haer will lead the process. The group will offer advice and guidance on policies' potential impacts on producers, and will meet as needed. Participating members include:

 
 Gary Haer-Renewable Energy Group
 
 Scott Johnson-Gen X Energy
 
 John Plaza-Imperium Renewables
 
 Jonathan Phillips-RBF 
 
 Mark Farrer-Direct Fuels
 
 Mike Nobel-HERO BX
 
 Greg Hopkins-US Biofuel
 
 "It's absolutely imperative that NBB members take an active role in policy decisions," Hegland said. "This task force is yet another way that our trade association is working to serve all its members and ensure they direct the future of this industry." 
 

 Chairman Hegland also named committee leadership positions: 
 
 Regulatory: Chair Ben Wootton, Keystone Biofuels Inc.; Vice Chair Ron Marr, Minnesota Soybean Processors 
 
 Technical: Chair Greg Anderson, Nebraska Soybean Board; Vice Brian Boyle, Stepan Company 
 
 Marketing: Chair Jess Hewitt, Gulf Hydrocarbon Inc.; Vice Michael Cooper, Ultra Green Energy Services LLC 
 
 Trade: Chair Kris Kappenman, ADM; Vice Martin Beirne III, Green Earth Fuels of Houston LLC

NBB forms Producer Advisory Task Force, recognizes committee leadership

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 television studio, which was founded in 1920. The studios, home to Sesame Street for 17 years as well as other television shows, movies and commercials, previously used straight No. 4 and No. 6 residual heating oils, but is now 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. Studio President Hal Rosenbluth said, "We are thrilled to answer the Mayor's call to action for a greener New York by using Metro's biodiesel fuel." 

 
 A new biodiesel plant, EDG Fuels, opened in Tucson, Ariz. , in mid-March. Owned by Environmental Development Group, the facility is scaled to produce up to 3 MMgy of biodiesel in its first year of production, with potential to expand to 6 MMgy the following year. Feedstock for the biodiesel refinery will be used cooking oils collected from Tucson-area businesses through Enjoy Dining Green, a "coalition of concerned and environmentally conscious people and restaurants united to practice environmentally sustainable recycling in the form of used cooking oil to biodiesel processing," EDG Fuels stated. Enjoy Dining Green offers free collection containers and service, and members get discounts on combined service packages such as grease interceptor maintenance, facilities maintenance and plumbing. 
 
 U.S. Foodservice-San Francisco, the only green-certified broadline food distributor in California-one of only a handful across the country-is now running its entire delivery fleet on B5. All of the San Francisco division's 136 tractors and 148 trailers began using B5 last month. The B5 costs on average about two cents more per gallon than diesel fuel but its use is expected to reduce U.S. Foodservice-San Francisco's carbon dioxide emissions by 333 metric tons-or 734,000 pounds-annually. The biodiesel is locally sourced and refined, a product of Western States Oil, San Jose. Biodiesel is not new to U.S. Foodservice-San Francisco. The division, which serves northern California from Monterey to Redding, has been experimenting with the fuel since 2006. San Francisco is the fourth U.S. Foodservice division to use biodiesel in its fleet, joining divisions in Atlanta, Streator, Ill., and Plymouth, Minn. 
 
 
 Colby B. Warr, CPA has joined independent certified public accounting firm Weaver and Tidwell LLP (now doing business as Weaver), as a senior manager for Assurance Services in the firm's Houston office. Warr brings to Weaver 10 years experience in PricewaterhouseCoopers' energy assurance practice, where he served small and large oil and gas companies. His practice concentration is in financial statement audits and reviews, due diligence and agreed-upon procedures. His industry experience includes all aspects of the energy arena, including multinational majors and national oil companies, as well as local owners and operators, upstream and downstream activities, retail energy and utility providers, including retail natural gas and alternative energy companies. Warr is a graduate of Brigham Young University. 
 

 
 A natural gas processing firm that intends to extend the national diesel pool is set to operate next month in the Reno-Tahoe Industrial Park outside Reno, Nev. Advanced Refining Concepts liquifies natural gas and processes it until it resembles No. 1 diesel. This liquid is then blended with conventional diesel fuel to form ARC's trademarked GDiesel. "It's basically an upgraded oil terminal," said Peter Gunnerman, CEO of ARC. "We have four 5,000-barrel storage tanks, a loading rack, the main [processing building] and an electrical building. We operate at low-temperature and low-pressure, so we don't need a lot of equipment." Phase 1 of ARC's Nevada plant will produce 100,000 gallons per day of its inaugural product. 
 
 
 Schroeder Biofuels recently announced two new product sizes for its trademarked ColdClear, a multi-stage treatment system for solving the cold soak dilemma in biodiesel and biodiesel blends. After success with the ColdClear units that can process 5, 15 and 45 gallons per minute, Schroeder saw the need for units with greater throughput. Thus, the company developed the BCC1200 unit, which can handle 60 gpm; and the BCC1500 unit for processing 75 gpm. With the introduction of these new sizes, ColdClear can now be implemented in larger biodiesel plants and diesel fuel distribution centers. ColdClear, developed by Schroeder BioFuels, is a patent pending technology to ensure that any potential factors in biodiesel that would initiate crystallization or plugging are dramatically reduced. 

 
 Toyota Tsusho Corp. is looking to invest in the Philippine biodiesel industry by investing in jatropha plantations and biodiesel production facilities in General Santos and Davao in the next two years, according to a recent report in the Manila Times. These facilities will help fulfil not only the Philippine biodiesel mandate, but also several Asian markets and Europe. Toyota Tsusho started its joint venture study with Dole Philippines in July on 50 to 200 hectares of land. This endeavor appears to be Toyota Tsusho's first venture into biofuels production and, depending on its success, expansion into Indonesia, Laos, Vietnam and Thailand is possible.
 
 ClearFuels Technology Inc. and Hughes Hardwood International Inc. executed a memorandum of understanding (MOU) regarding the development of a commercial scale biorefinery facility for the production of renewable jet or diesel fuel, which is slated for co-location with Hughes Hardwood's wood component products manufacturing facility in Collinwood, Tenn. Under the MOU, Hughes Hardwood will supply 1,000 dry tons of wood product per day for conversion into approximately 16 million gallons of synthetic jet or diesel fuel and 4 million gallons of naphtha annually, and approximately 8 megawatts of excess renewable power. The project is currently expected to be operational by early 2014. 
 
 Elevance Renewable Sciences Inc., the biochemical company whose Nobel prize-winning technology, olefin metathesis, will be deployed in Central Iowa Energy's biodiesel plant, recently hired Steve DiBiase as chief scientific officer (CSO). DiBiase will lead the development of Elevance's technology roadmap and external technology assessment, research proposals for external funding and contribute to the development of innovative products. Prior to joining Elevance, DiBiase served as CSO for JohnsonDiversey. Previously, he served as vice president of research, development and engineering for Lubrizol, where he played a key role in the development of lubricants made from sunflower oil. 

 
 Damascus, Md.-based Syndication Inc. is constructing a biodiesel plant in Kingstree, S.C. A 75,000-square-foot warehouse is being outfitted with two Denami 600 biodiesel production units purchased from Methes Energies International Ltd. Each 16-foot by 20-foot continuous flow Denami 600 unit can process 158 gallons per hour, or 1.3 MMgy. A $5 million loan Syndication secured in January, plus another $1.5 million in company cash matching, brings the total project cost to $6.5 million. 
 
 Canadian biodiesel producer Biox Corp. and JJR IV Acquisition Inc. recently completed "the amalgamation of Biox and JJR to form a company known as Biox Corp., which resulted in the reverse takeover of JJR," the company stated in a March 1 news release. "In connection with the completion of the qualifying transaction, the common shares of Biox will be listed on the Toronto Stock Exchange effective on March 2 under the symbol BX and the common shares of JJR will be delisted from the TSX Venture Exchange." 

 
 Thermex Engineered Systems Inc. has developed HeatProbes, a patent-pending retrofit system for heating non-insulated biodiesel tankers during cold weather transport. Using waste heat from the truck engine's coolant, the HeatProbes are installed through a two-inch tank port. Supply and return lines are joined to the vehicle's coolant lines, allowing engine heat to be transferred to the biodiesel in the tanker. A HeatProbe system can be installed on any tanker truck or trailer and multiple probes and multiple tanks can be plumbed up in parallel sequence. The HeatProbe system imparts sufficient heat to the biodiesel to withstand temperatures of minus 40 degrees Fahrenheit in non-insulated tankers. The system, which heats the biodiesel "intank" to overcome fuel clouding and filter plugging, can also be used on vehicles and equipment that operate in the cold. &#61500;

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Business Briefs

The elimination of jobs in the biodiesel sector began in 2008 when agricultural commodity prices started tracking crude oil in the months preceding Wall Street's September crash. Plants unable to make their margins work started to shut down, and workers were laid off. Like exuberant investors, the biodiesel sector also attracted talent. Engineers and chemists, risk managers and traders were often eager to leave their jobs in forestry, petrochemical and other industrial sectors to help biodiesel companies get started, grow or improve. "Everybody wanted to get in," says David Ball, partner in the renewable and alternative energy practice for Charlotte, N.C.'s Sterling Partners USA. "But I know a lead engineer of a major biodiesel company who left for a different position, and they didn't replace him."
 
 Those hurt most by the expiration of the tax credit, however, are the blue-collar workers-some without college degrees and restricted to rural areas where they were raised, and where biodiesel plants are located. "The chemists and the engineers and the presidents can go back to the oil company or wherever else," Ball says. "It's the mechanics and the maintenance men who are having a hard time."
 
 Having worked in the agricultural and petrochemical industries for years, Ball is now focused on finding talent for second- and third-generation biofuel companies. Cellulosic ethanol and biodiesel made from algae are still years away from commercialization, and the government should be doing everything it can to make sure that current biodiesel products are affordable enough for the public to buy-today. "The lapse of the tax credit has raised the price of biodiesel to the point that it can't compete as a transportation fuel," Ball tells Biodiesel Magazine.
 
 But the jobs issue has been the rallying point for industry efforts to have the tax credit extended. Over the past few months, "jobs" has been heard so many times that it has become annoying. Biodiesel advocates such as Randy Olson of the Iowa Biodiesel Board have argued that this industry already exists and does not need further research efforts with jobs to offer, if the tax credit is in place to support it. "For every dollar that Iowans spend on diesel fuel, more than 70 cents leave the state. Meanwhile, about half of the state's biodiesel plants sit idle, with those still operating forced to lay off staff or cut pay," he says.
 
 
 Resolution Rigmarole

 
 Biodiesel producers have watched hopefully and helplessly as an "extender" has been included in four different pieces of legislation since last fall. On March 1, Senate Majority Leader Harry Reid (D-Nev.) and Sen. Max Baucus (D-Mont.) introduced the American Workers, State and Business Relief Act, a $150 billion piece of legislation that includes an extension of the biodiesel tax credit. A vote was expected in early March, after fierce bickering dominated proposals for job creation legislation between Democrats and Republicans on Capitol Hill. For the time being, the industry remains a ringside spectator. 
 
 The fact that the biodiesel industry was "double-dipping" in 2007 and 2008 by taking the $1-per-gallon federal excise tax credit for methyl ester blending, then shipping the fuel to Europe to cash in on additional subsidies caused a "public relations issue," says a Biodiesel Magazine source, regarding the lapse of the benefit. "The industry is also spread out and diverse, so the question has been 'who's going to be the champion?'" the source says. "And [the biodiesel industry] isn't economically big enough for anybody to care-that's why they've had such a hard time getting this thing passed." 	
 
 The first jobs bill was introduced on Feb. 11 by Sen. Charles Grassley (R-Iowa) and Baucus, called the Hiring Employees to Restore Employment Act, legislation that among other things provided for the extension of expired tax provisions, including the biodiesel tax incentive. This was a "jobs" bill worth $85 billion that had bipartisan support and the approval of the White House. It didn't even take a day, however, once Grassley and Baucus' work was circulated, for Reid to announce his decision to move forward with a scaled-down jobs package that did not include an extension of the biodiesel tax incentive, "indicating that this issue and other expiring provisions would be addressed at some undetermined point in the future," the National Biodiesel Board stated. 
 
 As previously mentioned, the biodiesel tax incentive has been written into at least four bills since November that have never gotten to a Senate vote. "Grassley and Baucus worked hard to craft this legislation and the fact that Reid changed it is terribly disappointing," Olson says. 
 
 Republicans may feel like they fell for the classic bait and switch-a political maneuver where one party agrees to a deal simply to ascertain the wishes or motivations of an opponent, then backs out-in regard to Reid's actions while negotiating items in job creation. 
 
 Reid's decision to cut the Grassley-Baucus bill and then write his own legislation that included many items Republicans wanted was kind of mysterious. Opponents argue that it sends a message that "[Reid] wants to go partisan and blame Republicans when Sen. Grassley and others were trying to find common ground on solutions to help get the economy back on track and people back to work," Grassley's office stated. "The Majority Leader pulled the rug out from work to build broad-based support for tax relief and other efforts to help the private sector recover from the economic crisis."
 
 Nevertheless, while Republicans and Grassley, a stringent biodiesel supporter, were excluded from drafting the most recent bill that includes an extension of the tax credit, it will matter little to the biodiesel industry if the current bill is passed soon.
 
 
 Employment Creation Strategies

 
 Backing a strategy to employ energy tax credits as a means to creating jobs might be a hard position to defend, says David Swenson a biofuels advocate and professor of economics at Iowa State University. "A biodiesel plant that produces 30 MMgy would be subsidized at $30 million and only support 30 jobs-that's $1 million per job," Swenson says. "If $100 million is spent constructing roads and bridges or doing building retrofits, it could support between 1,750 and 2,000 jobs. So I'm not sure the biofuels industry wants to make the argument that energy subsidies create jobs, because those jobs are extremely expensive." 
 
 These comments that Swenson relayed to Biodiesel Magazine prompted some sharp responses from biodiesel industry stakeholders and observers. "Those $30 million dollars spent for tax credits will prevent $30 million from going overseas and never coming back in trade," says Larry White, director of CFO Capital Services, and developer of a biofuels project called America's Fuel First. "That $30 million will grow here to become more than an equal amount in tax revenue in less than a year." 
 
 Second, by those dollars staying here, they circulate here and grow here. For every $100 million kept in the United States, "that $100 million will grow to over $500 million in just one year by circulating between buyers and sellers of all kinds of goods and services when each seller marks up his products by an average of only 15 percent-six cycles gets you $500 million," White says. 
 
 Roman Wolff, president of Enhanced Biofuels, a Houston firm that has developed a noncaustic reactor for biodiesel processing, also had very strong opinions. "If you are going to compare expenditures, compare the same amount, $30 million for both biodiesel and road construction, not $30 million for one and $100 million for the other," Wolff tells Biodiesel Magazine. "Most projects (roads and others) are only 20 percent labor, so a $30 million roads project would be only $6 million in labor and create only 100 direct jobs, not the 2,000 claimed by Swenson. These 100 low-paying jobs are not much better than the 30 high paid biodiesel jobs."
 
 An investment in biodiesel adds many indirect jobs in logistics and transportation, maintenance, along with other sectors and this trickle effect is much smaller when building roads-roads are not a business. An investment in biodiesel is an investment in the community and long term, high-paying, steady jobs, not low-paying jobs that come and go with the projects. "First, complete a project in Texas, then lay people off," Wolff said. "Then go to Minnesota, and so on-these road projects maybe good stopgap measures, but they do not build communities."
 
 Swenson made the comparison between biodiesel projects and road construction perhaps defending a bill that was passed by the Senate accommodating several road projects after the original Grassley Bill was cut. "An investment in biodiesel reduces the trade deficit by three to four times the amount invested," Wolff says. "I don't think roads can claim that benefit. An investment in biodiesel reduces pollution. Roads? Nope, actually the cement used drastically increases pollution." 
 
 
 Nicholas Zeman is associate editor of Biodiesel Magazine. Reach him at (701) 738-4972 or n<a href="mailto:zeman@bbiinternational.com">zeman@bbiinternational.com</a>.

Three different jobs bills made hundreds of headlines in February, as Democrats and Republicans debated which policy measures actually create jobs. All the biodiesel industry could do, seemingly, was watch.

JOBS:  Judgments on  Biodiesel Stimulus

While conventional biodiesel technology is relatively straight-forward, many variables can influence the overall characteristics of the fuel. Things like glycerin content, centrifuge and pump performance and methanol purity can cause the percentages of certain fuel components to fluctuate. Too much variation and the biodiesel could be off-spec. Completing the cycle and being left with a low-grade product means dollars lost. 

 
 From an optimization standpoint, a lot of money has been lost from having less than adequate methanol recovery systems in place because, after the same methanol is used over and over again, it begins to attract water, affecting the process. This is a situation more plants are realizing they need to avoid. "We've seen some growth in the area of plants wanting methanol purification equipment," says Raj Mosali, CEO of Miamisburg, Ohio-based Jatrodiesel Inc. The company has designed a fairly unique distillation column that, for the first time, combines glycerin drying into the methanol distillation, which significantly reduces the energy cost to dry glycerin, Jatrodiesel says. "The resulting glycerin has less than 0.5 percent methanol and pure methanol coming out of the column has 99.9 percent or higher purity."
 
 Plants continue to upgrade and optimize production processes. Nathan DeMartino, president of Dexter Biodiesel Solutions in Pearland, Texas, said his company recently sold its first BCC900 ColdClear unit to Keystone BioFuels, a 20 MMgy facility in Shiremanstown, Pa. DeMartino said this was the largest unit sold "anywhere in the world" and is the largest install to date. Keystone BioFuels will use the ColdClear unit as a quality control measure to ensure that its biodiesel is consistently below the ASTM cold soak standard for biodiesel, which will "help them achieve the coveted BQ9000 status," DeMartino said. 
 
 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 to 200,000 gallons before the filters need to be changed. Even though biodiesel business is depressed now, there is still interest in new products and systems. "Believe or not, I'm still getting interest from startups-there are still companies out there who are starting and growing," DeMartino says. "Companies in Canada, for instance, are unaffected by the lapse of the tax credit, and I have a few demonstrations going on up there." 
 
 This shows blenders and other high-throughput producers that the unit can handle their loads, DeMartino says. "I'm really excited about blenders, and the market that is there for this system," he says. "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." 
 
 Methanol distillation and recovery, along with the employment of certain filter media like ColdClear, are among the many products and practices producers use to produce excellent fuel. Post-transesterification systems, however, usually begin by "washing" or "polishing" the fuel, a process that can be performed with or without water.
 
 "I would say that the biodiesel industry is getting away from water washing," says Rocky Costello of R.C. Costello Engineering in Redondo Beach, Calif. "It basically just adds an extra step to the process because you have to turn around and remove any residual water from the biodiesel." 
 
 Dry washing often begins by treating the fuel with magnesium silicate, marketed under various brand names including Magnesol. The Dallas Group of America Inc., the company behind Magnesol dry wash, offers a line of adsorbents to help biodiesel producers purify their fuel and pass the cold soak filtration test (CSFT). Called D-Sol, the new product line "removes sterol glucosides and other contaminants that cause CSFT failure." D-Sol can be used either during regular dry wash purification or as a post-purification treatment after water-wash or ion exchange purification. It can be used as a part of the regular adsorbent purification process at no additional production cost, or as post purification after treatment that presents modest expense increases, around 2 cents a gallon or less. "Unlike other post-purification filter treatment systems, D-Sol works at normal process temperatures so there's no need to waste time and energy chilling the fuel down prior to filtration," the Dallas Group says. 
 
 

 Ion Exchange
 
 Magnesol is a dry wash that removes residuals such as sodium and potassium from the fuel. This process itself, however, leaves impurities that must be removed through various membranes and filter media so the resulting product is sparkling. An alternative to a Magnesol wash is ion exchange. Costello says that he doesn't publicize which dry wash method he advises using, adding that the discovery of what works best over the years is sort of a trade secret. "I will say that using Magnesol, however, creates a landfill issue," Costello says. "With ion exchange, you don't have nearly as much waste material." 
 
 Ion exchange media have been relatively one-dimensional in the past, but new products are increasing versatility and allowing producers to comply with stricter quality assurance standards. This is the market sector that brought the monolithic Dow Chemical Co. to the biodiesel industry. Dow said it saw an opportunity to help buffer the volatility of raw materials costs and produce a superior quality fuel. At this year's National Biodiesel Conference & Expo in Grapevine, Texas, Dow launched its new Ambersep BD19DRY fuel polishing resin that can help producers pass the CSFT. "Ion exchange resins usually don't address the cold soak filtration, which is why Dexter sells Schroeder's ColdClear product," DeMartino says.
 
 Mosali says, however, that certain ion exchange mediums "are not truly multi-feedstock" and do not adapt well to changes in free fatty acid content. "If your feedstock is absolutely uniform and consistent, then ion exchange makes a perfect product," Mosali says. "Any variation though, and you start to run into problems." He adds that similar problems have been reported with ColdClear. "Any change in the feedstock and your changing those cartridges like crazy," Mosali tells Biodiesel Magazine. 
 While these products may have individual weaknesses, DeMartino says they can be used in conjunction to stage a more versatile polishing process. "What I've found to work really well is that you run biodiesel through the Eco2Pure product before it goes through ion exchange," he says. "This allows for a longer life of the ion exchange beads, which are more expensive and it removes the soaps from the fuel. Because ion exchange resins are acidic, they turn soaps back into free fatty acids."
 
 Eco2Pure is a cellulosic material, a mesh of hardwood sawdust, a truly renewable filter medium. "As the unwashed biodiesel enters the Eco2Pure treatment tower, it passes through a fixed bed of Eco2Pure purification media, ensuring the fuel is purified in a single pass removing production residues, fuel contaminants and soaps," Dexter says. "Flow rates need to be governed accordingly in order to ensure maximum removal of production residues and soap."
 
 
 Post-production and Testing
 

 Testing is also a crucial component of polishing practices. Slight variables in the performance of settling tanks or centrifuges used to separate glycerin from the fuel before the filtration and wash stages can increase the level of impurities. More impurities mean greater cost. "If your separation doesn't occur that well because of a drop in tank temperature, or the centrifuge is not performing consistently, your glycerin levels go up and you're buying many more filters," Mosali says. "So you have to continuously test the fuel because the process responds to variables. Centrifuges, for instance, are not consistent equipment-they have a lot of issues all the time. If it leaves more glycerin in the fuel, you're changing filters all the time."
 
 Purification of glycerin-the product that results alongside biodiesel after transesterification-might also be a component of plants' back-end systems, but is associated with a huge capital expense. Nevertheless, the numbers look pretty attractive, considering the price for pharmaceutical-grade glycerin. "It could be as profitable as biodiesel, but you have to be assured of constant production to make it work," Mosali says, alluding to the lapse of the federal tax credit that has caused many plants to idle their production. 
 
 Even after the last filter biodiesel touches before it goes into holding tanks, it is further treated with different additives such as Eastman Chemical's solution for oxidative stability, BioExtend. Different combinations of these are often used in branding campaigns throughout the industry. Colorado's Blue Sun Biodiesel focuses on its particular additization package as a sales pitch. 
 
 Costello says that the big trend is distillation because it removes all impurities from the biodiesel. Some critics have noted, however, that distillation compromises the oxidative stability of biodiesel and requires the use of costly additive packages previously mentioned. "We think you need an additive package whether you're distilling the fuel or not," Costello says. "You do have to be sure that distillation occurs at the appropriate temperature so that oxidative components are not compromised." 
 	
 
 Nicholas Zeman is associate editor of Biodiesel Magazine. Reach him at (701) 738-4972 or <a href="mailto:nzeman@bbiinternational.com">nzeman@bbiinternational.com</a>.

Schroeder Biofuels recently introduced larger ColdClear units, including the BCC1200 to process 60 gallons per minute, and the BCC1500, a 75 gpm unit, both of which are built on the same foundation as the original ColdClear units. PHOTO: SCHROEDER BI

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Rocky Costello, owner of R.C. Costello Engineering, recommends fuel additive packages whether distillation is employed or not. PHOTO: NICHOLAS ZEMAN, BBI INTERNATIONAL

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As producers look to meet increasingly stringent quality specifications, purification, distillation and filtration services are becoming more and more important. Combined with the cost-reducing benefits provided by many products and "polishing" designs, purification practices can ultimately lead to superior fuels and profit margins.

Crystal Clear Fuel

Feb. 3 marked an unprecedented event in the history of the United States, not only for the biofuels industry but for the entire motoring public. With the signing of the advanced renewable fuel standard (RFS2), U.S. EPA Administrator Lisa Jackson put into motion the first ever regulatory program for establishing greenhouse gas (GHG) performance of the nation's transportation fuels. The regulations are the final result of the legislative efforts undertaken by Congress in the 2007 Energy Independence and Security Act (EISA). With a July 1 implementation date, the much awaited RFS2 will be a full 18 months later than originally anticipated by EISA. Considering the sweeping changes, heated controversies and the overall complexity of the program, the delays in the rulemaking process should really come as no surprise.
 
 The rule-making process was quite controversial and received a good deal of attention from the industry and press, particularly in the area of life-cycle analysis. Of particular concern was the new concept of assessing indirect land use change (ILUC). In the end, EPA retained the ILUC provisions but with a considerable shift in its assessment of the negative impact to GHG emissions.
 
 The pivotal change brought about by EISA is the qualification of a renewable fuel based upon its ability to meet a GHG reduction threshold. The RFS2 regulations contain four separate categories of fuels, each with their own feedstock and performance criteria. Each category has its own mandate of annual volumetric use and a corresponding schedule for increases through 2022. The total mandate grows from more than 13 billion gallons in 2010 to 36 billion gallons in 2022.

 
 A cursory review of RFS2 regulations quickly reveals a complex set of rules and terminology people may not be quite ready to digest. Recognizing the need for industry to grasp certain concepts, compounded by the short five months of implementation, my co-author Graham Noyes of Stoel Rives and I prepared a summation of the rule in the form of a free white paper, titled, "America Advances to Performance-based Biofuels-The Advanced Renewable Fuel Standard, RFS2," which can be accessed at <a target="_blank" href="http://www.CFCH.com/whitepaper" rel="external">www.CFCH.com/whitepaper</a>.
 
 Over the past three years, in dealing with hundreds of companies on the RFS1 and renewable identification number (RIN) credits, we still see that industry participants find the regulatory language particularly cumbersome and confusing when conducting normal business. Consider, for example, the four categories of fuels in RFS2. 
 
 In EPA parlance, the categories are cellulosic biofuel, biomass-based diesel, advanced biofuel and renewable fuel. Each of the fuels must meet certain technology and feedstock requirements. Furthermore, cellulosic biofuel must demonstrate a 60 percent GHG reduction; biomass-based diesel, a 50 percent reduction; and renewable fuel, a 20 percent reduction, or qualify to be grandfathered. It's best to simplify these fuel categories into a short acronym, CBAR. Therefore, there is Type C fuel, Type B fuel, Type A fuel, and Type R fuel. The first letter of each CBAR fuel type corresponds to the first letter of the fuel categories described by EPA. Type C represents cellulosic biofuel, Type B represents biomass-based diesel, and so forth.
 
 Prices for biomass-based diesel Type B RIN credits have been on a sharp rise in 2010, increasing from 11 cents per gallon-RIN to 30 cents, an increase of more than 200 percent in a month. Two primary factors responsible for this are 1) that the new mandate for biomass-based diesel amounts to 1.15 billion gallons in 2010, and 2) the lapse in the biodiesel tax credit-production of biodiesel came to a near standstill in January, attributed directly to Congress' failure to extend the credit. Faced with a mandate and little available product, petroleum refiners are in a classic supply and demand balancing act. With RFS2, Type B RIN credits are used by refiners to satisfy Type B obligations. Economics 101 then tells us that with a constant demand, and supplies drying up, RIN prices will increase. 
 
 Will the price of Type B RINs increase to a dollar? Can the 2010 Type B fuel demand be met through any other means? What will happen if the tax credit is reactivated? Is there a possibility the tax credit will be abandoned? These are very real questions and understanding the answers could make or break businesses. Take for example the answer to the first question, which is no, or to the second question, which is yes. The reasons are found hidden in the details of the new regulations. Every company participating in this market must have a clear understanding of these regulations, which govern this very complex economic model, providing options and placing limitations, and are a key prosperity factor in this new era. These environmental regulations are complex enough without the burden of learning all the legalese, so this new white paper covers a lot of ground with the intention of simplifying this important task. RFS2 will impact the entire transportation fuel industry, but none more than the biodiesel sector. Here are just of a few of the biodiesel-specific issues producers should be aware of.
 
 Reregistering plants Existing biodiesel producers must reregister their facilities with EPA, a necessary step to qualify in meeting GHG reduction requirements. Supporting paperwork will be required along with a report from an independent third-party professional chemical engineer, who must conduct a site visit and, for domestic facilities, be licensed through a state engineering agency. For foreign plant engineering inspections, the engineer must be licensed through an official governmental body. This registration step is required for any producer of more than 10,000 gallons annually, and is due by July 1.
 
 2010 volumes The 2009 mandated volume of 500 million gallons for biodiesel fuel carried forward into 2010, making the present year mandate 1.15 billion gallons. However, this does not guarantee a corresponding demand for biodiesel in 2010. EPA made numerous allowances in the final rule for obligated parties to meet this mandate in 2010. It may come as a surprise that any Type B RINs applied to 2009 obligations will come right off the top of the 2010 obligation. Furthermore, 2009 RINs can be applied towards 2010 obligations, as well as a limited number of 2008 RINs. One additional step taken through RFS2 is the "reinstatement" of RINs that were retired as a result of nonroad fuel use. The market will see a number of RFS1 RINs back in play as a result.

 
 New burden for waste processors One of the biggest changes between the proposed and final rules was in feedstock qualification. Provisions exist within the legislative language of EISA that attempt to circumvent new cultivation of land for the purpose of fuel production. Essentially, fuel production from land not in cultivation prior to December 2007 would not qualify for RIN credit generation under RFS2. As proposed, the rule would have required an exhaustive amount of paperwork, tying back to the land for each batch of fuel produced.
 
 EPA made a huge concession in this area and agreed to rely on USDA information to satisfy the requirement pertaining to land use for domestic crops. Unfortunately, there was no similar concession made for waste-derived feedstock or for agriculture products from foreign countries. Unfortunately for biodiesel producers who process animal fats, used cooking oils or waste grease, the burden for recordkeeping and feedstock certification still exists. This could become a rather large burden and possibly limit the marketability of RINs these companies can generate.
 
 It's noteworthy that the March Biodiesel Magazine reported this issue being raised publicly with EPA at the 2010 National Biodiesel Conference & Expo in Grapevine, Texas. Paul Argyrlopolus, the senior advisor to EPA Director Margo Oge, discussed the matter and indicated that EPA would take it under consideration and possibly issue a letter of interpretation. It would seem that this issue could be addressed with a modified definition, but such is the nature of the political and regulatory process. n
 
 
 Clayton McMartin is the founder of Clean Fuels Clearinghouse, which operates the RINSTAR renewable fuels registry. Reach him at c<a href="mailto:em@cfch.com">em@cfch.com</a>.

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Complex rules and a short implementation schedule make the new renewable fuels standard a challenge for producers. A newly published white paper explains the basics.

RFS2: Understanding the Basics

Developing and marketing new biodiesel technology is an exciting and potentially highly profitable enterprise. Since large amounts of capital can be required to do so, investors may have legitimate concerns. One way to increase profits while reducing investment risk is to establish and protect technology rights, and avoid losses by respecting others' rights. Patents and trade secrets may be used to protect and increase market share by creating significant barriers to competition, and creating direct profits through licensing. 
 
 This article provides a general overview of technology rights, but given space limitations, certain details, exceptions and topics are not discussed. For particular situations, readers should consult a properly licensed attorney.
 

 Patents are national governmental grants of the right to exclude others for a set length of time from making, using, offering to sell, selling or importing an invention in/into that country. Patents often effectively give holders a monopoly in practice, but since patents provide a right to exclude others, but not a right to practice per se, they don't give true monopoly rights. This may be a concern where a later patent issues with scope within the larger scope of an earlier patent owned by a different entity, because neither patent owner could practice the common scope without infringing the other's patent when in force unless permission of the other owner was obtained. 
 
 Trade secrets are information used in a business that may give it an advantage over competitors who don't know them. Multiple entities may legally hold or use the same trade secret if independently developed, properly licensed or properly reverse engineered. There can, however, be only one patent per invention per country (usually), and licensing is limited accordingly. Many things can be trade secrets, from process technology to customer lists, while not patentable. 
 
 Trade secrets do not involve governmental grants but are still protected. To establish and maintain trade secret protection, a system is needed to keep secure current and detailed documentation of the trade secret with limited "need to know" access, absent a secrecy agreement. Trade secret rights are private and without term limit, but they are lost if the information becomes public. There may be civil remedies (monetary damages) and injunctions (cease and desist orders), and criminal penalties for trade secret misappropriation. 
 
 The concealment required to protect trade secrets and "public use" that occurs when exploiting them may eventually prohibit their patenting. There is even a danger that Company A might patent technology that Company B previously established as a trade secret, and Company A will then sue Company B for patent infringement. 
 
 
 Basic Requirements 
 
 There are few restrictions on patentable subject matter, and patents may claim processes, machines, manufactures, compositions of matter and improvements on these. "Products of nature" can raise subject matter issues, but such compositions enhanced by human involvement, and processes for enhancing them, are frequently patentable. 
 
 There are three major patenting requirements found in sections 101, 102 and 103 of the U.S. patent code. Any indication of usefulness in the patent application is sufficient to meet the utility requirement of section 101. The section 102 requirement for novelty defines "prior art events" that render an invention unpatentable. Materials known for years such as common biodiesel-related processes and their individual components are unpatentable since they lack novelty, but new combinations of such materials might be patentable. New processes to make "old" materials may be patentable also. 
 
 Section 103's requirement, non-obviousness, is based on the prior art events for novelty, but is distinct. A patent will not issue if differences between the invention and the prior art are such that the invention would have been obvious at the time made to a person having ordinary skill in applicable technology. The U.S. Patent and Trademark Office usually makes an initial determination on a patent claim's obviousness by determining whether all claim parts are present in the prior art-usually some assembly of patents or other printed publications-and whether there was suggestion there for the combination. An initial determination of obviousness by the USPTO can often be successfully challenged. 

 
 
 U.S. Patent Applications 
 
 To get a patent, an inventor files an application that must pass examination, or "get through prosecution," in the USPTO. Important application parts include explaining the invention, its uses, how it's made and practiced, and claims that set the scope of any patent issuing.
 
 Inventors must give written description of their invention in the application and cannot later introduce amendments to the claims not supported by the original filing. The law requires that an application be "enabling"-contain sufficient information for a person with ordinary skill to make and use the invention without "undue experimentation." The application must also disclose the best mode to carry out the invention contemplated by the inventor(s) when filed; this best mode cannot be kept as a trade secret.
 
 U.S. patent law also requires applicants to disclose any prior art or prior art events discovered by time of filing or later until patent issuance. Failure to do so may render a patent unenforceable. While there is no prior art search requirement, a thorough search before filing is recommended. Applications are usually published after 18 months. The patent term is generally 20 years from earliest filing date. 
 
 Patent infringement Direct infringement is unauthorized making, using, offering to sell or selling a patented invention when/where the patent is in force, or importing the invention into a country when/where the patent is in force. There may be liability for inducing or contributing to infringement by others, and even for certain activities outside the granting country. Defenses may include claim invalidity and inequitable conduct-breaching the duty of candor-but ignorance is no excuse. Remedies may include monetary damages and injunctions. 
 
 International differences Patent law worldwide is fairly consistent, while trade secret law is more variable. Patents are only really effective in the country where granted, but most countries routinely grant patents on inventions made elsewhere upon proper application. The "absolute novelty" requirement is probably universal outside the U.S.; there is a one year grace period sometimes in the U.S. Generally in the U.S., "first to invent" gets the patent if contested, and elsewhere "first to file" is probably the rule. The duty of candor and best mode requirements are probably unique to the U.S.
 

 Managing tech rights Portfolios of technology rights may include patents or trade secrets from one or more countries derived from internal research, licensed or purchased. Portfolios are managed to maximize value and can facilitate trade and manufacture in the U.S. and abroad, while offering protection from competitors and bringing in licensing revenue. 
 
 It is said that the biodiesel industry favors using trade secrets over patents. If true, this may be because trade secret protection is viewed as easier to establish than patent protection, but trade secret rights can be lost through any public disclosure and unlike patent rights, might have to be "shared" with those who successfully reverse engineer. A compromise is protecting basic technology with patents and later improvements with trade secrets, but this isn't foolproof.
 
 Businesses and specific technology rights may be owned by one or more entities. In the U.S., joint patent owners may exploit a patent without the permission and with no accounting to other owners, absent a prior agreement. Inventors are considered the owners of U.S. patents, unless assigned, and there may be a contractual or implied duty to assign (and similarly for trade secrets). Inventions made involving U.S. federal funding or state university research may have ownership restrictions.
 
 A recent survey of U.S. patents and published applications containing "biodiesel" shows there were 29 patents issued and 158 patent applications published in 2009 alone. The situation internationally is similar. Although trade secret activity isn't as easy to determine given its nature, it is also likely very high.
 
 
 Charles R. Richard is a Washington D.C.-based patent attorney and attorney-at-law with a technical background in microbiology, chemical engineering and nanotechnology. Reach him at <a href="mailto:crobrich@yahoo.com">crobrich@yahoo.com</a>.

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When determining whether to file for patents or rely on trade secrets, it is important to know the advantages and disadvantages of each route to intellectual property protection.

Protecting Technology Rights

Successfully operating in today's biodiesel production market is becoming more and more difficult. Competition is fierce, costs are rising, demand is fluctuating, tax benefits are not being extended, and government proposals are incomprehensible. Small- and medium-sized producers may have difficulty competing with other larger operations because of economies of scale. To overcome this challenge, small and medium producers could consolidate with other small, medium or large producers in order to attain the economies of scale necessary to remain competitive. Alternatively, larger operations may be interested in acquiring other facilities to increase their existing production capabilities and to provide a greater base of activities over which to spread their fixed costs, thereby reducing their overhead on a per-gallon produced basis.
 
 A consolidation of entities is one strategy for continuing a producer's financial growth and to reach certain economies of scale. Consolidations can take the form of a sale of assets, a sale of equity, or a merger, all of which are commonly referred to as a "merger and acquisition," or M&A.

 
 Suggesting an M&A transaction to advance an entity's growth is very easy to do, but the completion of such a transaction can be quite complicated. Ultimately, however, the financial model of a completed M&A transaction must demonstrate that the consolidation of entities benefits all parties (with certain exceptions) when compared to continuing operations as separate entities. It is synergism in its purist form-the whole is greater than the sum of its parts. In determining whether to complete an M&A transaction, the parties need to consider many items, including:
 
 -the cost savings to be obtained from the transaction
 
 -increased customer and supplier base
 
 -the management, employees and culture that will survive
 
 -intangible assets that are brought to the transaction 
 (goodwill, trade names, etc.)

 
 -unique tangible assets that are brought to the 
 transaction (processes, customers, suppliers, etc.)
 
 -the team that will work on completing the transaction 
 (financial analysts, accountants, attorneys, etc.)
 
 -the type of transaction that will be completed 
 (asset sale, equity sale, merger)
 
 -the entity that will survive the transaction
 
 -the valuation of the assets that will be sold, exchanged 
 or merged and how it will be paid (equity, cash, deferred 

 payments, options, etc.)
 
 -regulatory and legal compliance
 
 -any and all transaction costs including the costs of 
 completing due diligence
 
 -any and all tax ramifications related to the transaction
 
 Be advised that the "laundry list" of issues provided above is by no means exhaustive. To the contrary, the list is extremely abbreviated. For instance, the interplay between the tax ramifications and the type of transaction to complete involves many other issues, which could only be covered in a writing much longer than this space allows.
 
 The whole process behind an M&A transaction can be completed quickly, in as little as 30 days if the parties are motivated, and can take a very long time, more than a year, if the parties are not motivated. Obviously, the motivation behind all M&A transactions is the increased returns to be achieved once the transaction is complete.

 
 Stan Duran is a partner in the Energy Group of Lindquist & Vennum PLLP. Reach him at (612) 371-3285 or sduran@lindquist.com.

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Consider Consolidating

The base-catalyzed reaction of triglyceride with methanol produces fatty acid methyl esters. It is not until this material is purified to meet ASTM/EN specification that it should be considered biodiesel. Many purification techniques exist for biodiesel manufacturers, including methods to clean up feedstocks, crude biodiesel, and most recently, to polish biodiesel for improved cold temperature performance.
 
 Fats and oils can be treated by a variety of methods to convert them into raw materials for the biodiesel industry. While purification for biodiesel can be done at various steps within the process, up front feedstock purification pays the largest dividends since the overall process can be improved dramatically. It is preferable to remove potentially problematic materials from the feedstock prior to processing this feedstock into biodiesel. Generally speaking, the steps of pretreatment can include either chemical or physical refining. Physical refining includes extraction, degumming, bleaching and deodorizing, not all of which are necessary to convert oil into useable feedstock for the biodiesel industry. For materials with high levels of impurities, physical treatment is the preferred method of purification. In cases where biodiesel manufacturers are looking to remove minor amounts of impurities, chemical refining is the preferred method. The oil can be passed through a column of the appropriate ion-exchange resin, or bleaching earth, for example, to remove the last trace amounts of impurities. Many oil and biodiesel suppliers have their own proprietary techniques for physical refining of oil.
 
 Once the transesterification reaction is completed and the glycerol is separated via gravity separation from the methyl ester, this crude product must be further processed to remove impurities in order to meet the appropriate specifications. Impurities removed during this step include residual quantities of catalyst, glycerol and soaps. The favored methods in the biodiesel industry include water wash and nonwater wash. Water wash, as the name implies, relies on simple water addition, followed by separation, to remove the residual water soluble species. The water used in this step can be recycled back into other points of the biodiesel manufacturing process. For nonwater washing, two materials have found excellent commercial success: ion-exchange resins and magnesium silicates (or other inorganic adsorbents such as bleaching earth). These materials work by chemically adsorbing the impurities, thereby eliminating them from the biodiesel stream. The use of inorganic materials typically involves addition of the solid to a stirring solution of biodiesel. Slurry is made, and after stirring this solution for the requisite amount of time, separation with a drum filter or related filtration techniques provides the biodiesel in purified form. To use the ion-exchange resins, producers typically install a column filled with the dry resin, and the biodiesel is passed through this resin in continuous flow until breakthrough occurs. Some reports indicate as much as 2,000 liters of biodiesel can be processed through only one liter of resin or adsorbent. 
 
 In recent times, more stringent cold temperature performance standards have been imposed onto the biodiesel industry. The pioneering work published in 2006 points to monoglycerides, sterol glucosides, soap and water as the culprits causing poor cold temperature performance. Suppliers of biodiesel have a few options to overcome these cold temperature performance issues. One such method-cold filtration-involves cooling the biodiesel and filtering it while it is still cold. This method removes impurities that have poor solubility at these reduced temperatures. Another potential method of purification is an energy-intense process that involves distillation of the final biodiesel product. Both of these methods can involve the purchase of some elaborate processing equipment.
 
 To help resolve this problem for the biodiesel industry, researchers at The Dow Chemical Company have recently developed resin technology specifically targeted toward the removal of impurities such as monoglycerides and sterol glucosides. The challenge for producing such a resin lies in selectivity, the preferential removal of small quantities of monoglycerides and sterol glucosides in the sea of methyl ester. To overcome this problem, a material with the correct hydrophile-lipophile balance, as well as the proper pore structure to effectively adsorb these polyhydroxylated materials, was developed. Reports indicate that the use of these resins causes a reduction of monoglycerides by 80 to 90 percent. Since the removal of these impurities relies on an adsorption mechanism, the resin is regenerable, creating a cost-effective solution to the cold temperature performance issues the biodiesel industry is currently facing.
 
 
 Al Schultz is a senior scientist for Dow Water & Process Solutions. He can be reached at <a href="mailto:alfredkschultz@dow.com">alfredkschultz@dow.com</a>.

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Biodiesel Purification Options

Posted March 23, 2010
 

 Jatropha developer SG Biofuels recently announced it has developed the first large-scale jatropha community-farming initiative in Central America and has entered into its first project with the Roundtable on Sustainable Biofuels to test and enhance sustainability standards for jatropha cultivation.
 
 The SG Biofuels/RSB pilot is evaluating the practicality and usability of RSB sustainability standards applied against a 1,400-acre (600 hectare) Jatropha community-farming model established by SG Biofuels in Guatemala.
 
 Through the model, participating community farmers received free seedlings and monthly technical training from SG Biofuels. The company has also eliminated the harvest sale risk to the farmers by providing guaranteed purchase contracts of 100 percent of the production.
 
 "We're committed to socially and environmentally responsible cultivation of Jatropha," said Kirk Haney, SG Biofuels president and CEO. "Through our community-farming initiative and pilot with the Roundtable on Sustainable Biofuels, we're working to establish a model system for the sustainable production of Jatropha that provides economic value to farmers while hedging out the harvest risk. The sustainability insights gained through the pilot will be critical as we deploy large-scale community-farming and plantation projects around the world." 
 
 The project includes more than 380 farmers in 25 distinct communities. Plantations were established without displacing food crops, on land considered marginalized and unsuitable for food crops.
 
 "The pilot project with SG Biofuels provides us with the opportunity to test and improve our sustainability standards against a unique model of Jatropha production," said Matthew Rudolf, regional manager of the Americas for the RSB. 
 
 Guatemala is home to SG Biofuels' Genetic Resource Center, containing the world's largest and most diverse library of jatropha genetic material. The company recently announced the world's first elite Jatropha cultivar, JMax 100, optimized for Guatemala.
 
 SG Biofuels also launched the JMax Jatropha Optimization Platform, providing growers, plantation developers and research agencies access to the highest yielding and most profitable Jatropha in the world, the sequenced genome and advanced genomics platform to develop elite cultivars specifically designed for their unique growing conditions.
 
 SOURCE SG BIOFUELS

Testing jatropha sustainability standards

Posted March 24, 2010

 
 Carteret, N.J., Mayor Dan Reiman and Carteret residents were recently joined by representatives from Kinder Morgan and the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) for a ceremony in which a 30-year redevelopment agreement was signed, officially authorizing the company to reutilize 14 acres of "brownfields" in the Borough's Industrial Avenue light industrial district (Kinder Morgan Redevelopment Area).
 
 Adjacent to Kinder Morgan's existing facilities, the project will make use of property formerly used for truck maintenance, calling for additional blending and storage units, and allowing for 1,035,000 million gallons of biodiesel storage "and processing," Reiman's office stated. 
 
 Biodiesel Magazine awaits a response from Kinder Morgan to clarify whether this site will be used for biodiesel production as well as storage and blending, as use of the word "processing" suggests. 
 
 Ultimately the project will provide new connections to SUN, Colonial, and Buckeye regional pipelines.
 
 Kinder Morgan's proposal was first presented to the Borough in 2008, and received initial Planning Board approval on January 27.
 
 The agreement will offer many benefits to both the town and Kinder Morgan, according to Reiman, who stated at his 2010 State of the Borough Address that he anticipates the Borough will earn $30.2 million over the 30 years of the agreement alone.
 
 Redevelopment fees generated by the project will provide an additional $1 million towards the construction of the Borough's highly anticipated "Health & Wellness Center," according to Reiman, while the agreement has allowed for another $300,000 for off-site aesthetic improvements along Industrial Highway.
 

 "The numbers are certainly impressive but the foremost benefit will be to our homeowners and workforce," Reiman stated. "We've put a strong emphasis on unionized labor in this agreement as with all of our capital improvement projects, and are pleased to announce that 100 percent of the non-specialized construction labor involved with this project will come from New Jersey unions. This is in addition to the 250 private-sector jobs that will be created upon the facility's completion."
 
 Mayor Reiman lauded Kinder Morgan, the Borough's most substantial taxpayer, for its history of involvement in local improvements. Most recently these have included public library enhancements, the donation of a foam fire truck to the Carteret Fire Department, and becoming a partner in the HAZMAT Agreement Association, which will provide $300,000 per year in specialized training and equipment to Carteret's emergency service departments.
 
 "For 80 years Kinder Morgan has strengthened our commercial backbone and sustained private sector jobs," Reiman added, "but has also gone the extra mile in recognizing its obligation to Borough residents. From quality of life enhancements to improvements to public safety, Kinder Morgan has been a true friend to Carteret, and a partner in its continuing growth."

Kinder Morgan to redevelop NJ brownfields

Posted March 24, 2010
 
 The National Advanced Biofuels Consortium, created by stimulus packages under the federal government's economic recovery efforts, has selected Pall Corp. to develop filtration and separation processes for a U.S. DOE project to enable fungible biomass-based fuels to be integrated into the existing hydrocarbon fuels infrastructure. 
 
 The company will be an engineering partner on each of six processes for biofuel production being evaluated under the program. These processes include fermentation, catalytic conversion, catalytic fast pyrolysis, hydropyrolysis, hydrothermal liquefaction, and a low-cost, one-step syngas-to-distillates process. 
 
 "Pall is honored to have been selected to participate in this important research collaboration," said Greg Heilbrunn, senior vice president of global marketing for Pall Energy. "Our experience in advanced hot gas and liquid hydro separations for both conventional and alternative energy applications, as well as our global leadership in industrial membrane separations, will enable us to help ensure a marketable outcome of the consortium's work."
 
 The initiative will deliver at least one pilot-ready process, design reports, and life cycle analysis demonstrating economics and environmental benefits. The $46 million project will be co-led by NREL and the Pacific Northwest National Laboratory (PNNL). 
 
 "Collaborating on the ARRA fungible fuels program is consistent with Pall's global commitment to partnering with our customers for a greener future," Heilbrunn added. "It will capitalize on our enabling technologies and expand our renewable energy applications portfolio."

Pall Corp. gets NREL contract

Posted March 24, 2010

 
 The American Chemical Society's annual meeting taking place in San Francisco publicized a presentation, made by Albin Czernichowski, which detailed using the processes at work in big-screen plasma televisions to make diesel fuel. The GlidArc reactor, designed by Czernichowski, is named for the gliding arc of electricity that produces plasma inside the reactor. The plasma allows for conversions at reduced temperatures, taking gases from heated biomass that become clean and chemically active to produce clean fuels. 
 
 "Low-tech and low cost are the guiding principles behind the GlidArc reactors," said Czernichowski. "Almost all the parts could be bought at your local hardware or home supply store. We use common 'plumber' piping and connections, for instance, and ordinary home insulation. Instead of sophisticated ceramics, we use the kind of heat-resistant concrete that might go into a home fireplace. You could build one in a few days for about $10,000."
 
 Czernichowski said glycerin coproduct from biodiesel processing, which can be expensive to refine, would be a suitable candidate feedstock for syngas-to-biofuels production.

Plasma could see biodiesel application

Posted March 25, 2010
 
 Engineers with Tenneco Automotive have developed a new hydrocarbon lean NOx catalyst (HC-LNC) system for diesel NOx control using E85 as a reductant. E85 is a renewable fuel made of 85 percent ethanol and 15 percent gasoline. Unlike urea selective catalytic reduction (SCR), which employs diesel exhaust fluid (DEF) comprised of ammonia and water, Tenneco's HC-LNC system will use both diesel fuel and E85 dosing in the exhaust stream to help catalyze NOx emissions into tailpipe-out nitrogen and water. 
 
 A Tenneco engineer told Biodiesel Magazine that diesel fuel as a reductant can attain moderate NOx reductions but E85, however, can achieve significantly better conversion numbers. Exactly why E85 works so well for NOx abatement is not fully understood yet, but its oxygen content and volatility are thought to be major factors. 
 
 Urea SCR systems typically use copper- or iron-based catalysts, but Tenneco's HC-LNC system employs a unique silver-based catalyst. General Electric is the producer of the new silver catalyst, but Tenneco has exclusive rights to this specific catalyst formulation from GE for a majority of the on- and off-road emissions control markets, except large locomotive applications. 
 

 The intention is to use both diesel fuel and E85 in the same exhaust system and catalyst. Typically, diesel fuel would be used for NOx control under light loads while E85 would come into play during heavier loads and stop-and-go cycles. 
 
 Another advantage E85 has over urea is its ability to withstand lower temperatures. Alcohol has a much lower freeze point than DEF, which can gel at minus 11 degrees Celsius. An E85 storage tank on the vehicle would not require all of the heaters and heated lines that DEF tanks need, so the overall complexity of the system could be simplified. 
 
 Also, urea can leave crystal deposits in the exhaust system-on mixers and the inlet face of the catalyst-a problem E85 will not have. 
 
 This type of system, however, would rely on a well-developed E85 infrastructure, something many flex-fuel vehicle owners say is grossly lacking. Biodiesel Magazine's source, however, said he believes the U.S.' E85 infrastructure, as deficient as it may be today, is thought to be better developed at this point than a urea distribution infrastructure. 
 
 This could also be the catalyst needed by the ethanol industry to crack the "chicken-and-egg" conundrum often associated with E85 and compatible vehicle availability. And the synergy of simultaneously developing an E85 and clean diesel fluid infrastructure built around one renewable fuel is very appealing. 
 
 Tenneco anticipates its new system will be ready for commercial on-road application as early as 2012, with its eye on off-road applications as early as 2014.

New diesel NOx control system uses E85

Posted March 29, 2010
 

 The merger between German power plant and marine diesel engine maker, MAN Diesel SE, and MAN Turbo AG is now complete. The new enterprise, based in Augsburg, is named MAN Diesel & Turbo SE. From an economic standpoint, the merger is retroactive back to Jan. 1. 
 
 By combining the complementary product portfolios of the two firms, the merged company will strive for growth and seek to strengthen its position in the relevant market segments. 
 
 "The MAN Group will be seeking to pool its expertise in large bore diesel engines and power plants with its strengths in compressor and turbine technologies," said Klaus Stahlmann, MAN Diesel & Turbo SE's CEO and member of MAN SE's executive board. 
 
 The company states it will now be in a position to offer its customers product packages, such as turnkey Diesel Combined Cycle (DCC) power plants, or waste heat recovery systems for maritime applications. In addition to expanding its product range, the merger will also create synergies and offer further benefits in terms of costs. The company stated that its new cost savings are exemplified by joint global purchasing or the joint use of existing production, sales and service sites.

Merger creates MAN Diesel & Turbo SE

Posted March 29, 2010
 
 German oilseed promotion organization UFOP has analyzed official statistics published by BAFA, the German federal office of economics and export control, on the nation's domestic consumption of biofuels from 2007 through 2009. UFOP's analysis confirms a dramatic decline in German B100 sales. 
 
 Domestic German consumption of B100 in 2009 was down nearly 78 percent from 2008, dropping from 1.1 million metric tons (approximately 330 million gallons) of B100 in 2008 to 240,600 tons in 2009. 

 
 Even though pure B100 consumption in Germany is down significantly, 2009 saw a big rise in use of biodiesel as a blend component due to the move from B5 to B7. In 2008, German consumption of biodiesel for blending reached just more than 1.6 million tons, but in 2009 this had risen to nearly 2.3 million tons, constituting a 41 percent increase. UFOP noted, however, that this increase fails to compensate for the drop in pure B100 consumption.

German B100 sales nosedive in 2009

Posted March 29, 2010
 
 The American Petroleum Institute filed a lawsuit with the U.S. Court of Appeals for the District of Columbia challenging the U.S. EPA's rule on the revised renewable fuel standard (RFS2) that was just recently finalized. The final RFS2 rule combines the 2009 and 2010 biomass-based diesel volumes. 
 
 API issued the following statement regarding its lawsuit: 
 
 "While the U.S. oil and natural gas industry recognizes and appreciates the role of ethanol and other biofuels in the fuel marketplace, we are deeply concerned that the EPA's final RFS2 rule could result in higher consumer costs. By setting retroactive requirements, refiners, and ultimately consumers, will be penalized for EPA's inability to get this rule out on time as directed by Congress. We believe this rule unlawful and unfair, and we filed a petition for review in the U.S. Court of Appeals for the District of Columbia to challenge the legality of EPA's actions. EPA made the rule effective on July 1, 2010, while setting unreasonable mandates on refiners that reach back to 2009 for biomass-based diesel, and to Jan. 1 2010 for the other advanced biofuels." 
 
 API went on to say the U.S. oil and natural gas industry is the biggest consumer of ethanol and other biofuels, and that it supports a "realistic and workable" renewable fuel standard.
 
 The National Petrochemical & Refiners Association also filed a petition for review with the U.S. Court of Appeals for the District of Columbia Circuit today, challenging portions of the EPA's final RFS2 rule. 
 
 "The petition NPRA filed today does not challenge the overall RFS2 program and does not call into question the important role renewable fuels play in our nation's transportation fuel mix," NPRA President Charles T. Drevna said. "Rather, our concern is with the unreasonable retroactive application of certain provisions of the rule and fundamental fairness in the implementation of policy."

 
 The NPRA stated that the Energy Independence and Security Act of 2007, of which RFS2 was a part, required EPA to finalize certain standards by specific dates in 2008 and 2009. NPRA pointed out that EPA failed to meet those statutory deadlines. 
 
 "EPA retroactively and unlawfully imposed RFS2 compliance burdens on obligated parties, many of whom are NPRA members," Drevna added. "Simply put, the fact that EPA failed to meet its statutory obligations under current energy law does not give [EPA] license to impose retroactively additional compliance burdens on obligated parties. At the least, such action calls into serious question the fundamental fairness of EPA's RFS2 rulemaking process."

Big Oil files lawsuit against EPA on RFS2 rule

Posted March 30, 2010
 
 Four Rivers BioFuels Ltd., a subsidiary of Four Rivers BioEnergy Inc., signed an offtake agreement with BP Oil International Ltd. for the sale of at least 60,000 metric tons (approximately 18 million gallons) per year of on-spec biodiesel. The initial term of the agreement is five years. 
 
 The contract will go into effect once Four Rivers BioFuels Ltd., located in the northeastern English town of Blyth, can reach the minimum production volume to fulfill delivery requirements of the contract. 
 
 Gary Hudson, CEO of Four Rivers BioEnergy, told Biodiesel Magazine that the facility was originally built years ago as one of the world's largest penicillin factories but was eventually forced to shut down due to more efficient competition from China. Subsequently the plant was purchased by a group that repurposed it to produce biodiesel, after which Four Rivers BioEnergy bought the facility. 

 
 In April 2009, Four Rivers BioFuels was producing on-spec fuel for its new owners but Hudson and crew decided to shut down production only months later to make design and engineering modifications, including a more robust and effective front-end treatment system. Hudson said the plant's primary feedstock is used cooking oils. 
 
 With current production capacity at 77,000 tons per year, Four Rivers BioFuels stated that it intends to expand to 100,000 tons in the next seven months, and up to 200,000 tons within three years. Developing its own port and storage facilities in the nearby seep sea port in Blyth is part of Four Rivers BioFuels' strategy. 
 
 The company is seeking financing for the working capital necessary for plant expansion. Also, feedstock supply agreements are still being negotiated. Acquiring financing and feedstock supply are prerequisites for meeting the terms of the offtake agreement with BP.

BP inks offtake deal for UK biodiesel

Posted March 31, 2010
 
 General Motors Corp. just announced a five-year partnership with the U.S. DOE to help develop the potential of the jatropha plant as a sustainable biofuel energy crop. The goal of the project is to demonstrate that jatropha can produce significant quantities of oil for conversion to biodiesel and to develop new varieties of the plant that have high yields, can withstand frost, and grow in temperate climates such as the U.S.
 
 "Discovering new sources for biodiesel production is an important part of DOE research and development efforts," said U.S. energy secretary Steven Chu. "The expertise of this team can help speed the pace for the development of jatropha as a biofuel crop."
 
 Two jatropha farms will be established in India: a 16-hectare (39.5 acre) plot in Bhavngar and a 38 hectare (93.9 acre) plot in Kalol, near GM's India Car Manufacturing plant. An existing 30 hectare (74.1 acre) jatropha farm in Bhavnagar also will be managed under this project.
 
 Lab-optimized strains of jatropha, produced through selective and marker-assisted breeding, will be cultivated at these farms. The joint DOE-GM funding will enable the Central Salt & Marine Chemicals Research Institute-an India-based research facility falling under Council for Scientific and Industrial Research, Ministry of Science & Technology, Government of India-to manage all of the 84 hectares (840,000 m2). A complete lifecycle analysis will be conducted to evaluate the environmental impacts, starting with fertilizer production from raw materials and ending with the harvesting of jatropha fruits.

 
 Mike Robinson, GM vice president of environment, energy and safety policy, said success of this project would "boost GM India growth plans with biodiesel-capable products and reiterate GM India's commitment to green technology and alternate fuel solutions to reduce dependence on fossil fuel."
 
 GM has invested in next-generation ethanol startups Coskata Inc. and Mascoma Corp. Coskata recently announced plans to join a consortium, in conjunction with GM's Holden division, to study the construction of an ethanol plant in Australia. In addition to cellulosic ethanol, DOE and GM recognize the need to provide bio-based diesel alternative fuels that can replace fossil diesel. A significant portion of the global transportation fuel market in places such as India and Europe relies on diesel and cannot benefit from cellulosic ethanol technologies. For these markets, jatropha-based biodiesel has great potential as an alternative fuel, especially in regions where national security concerns are heightened by reliance on imported oil.
 
 In addition to India, other nations including China, the Philippines, several African countries, and the U.S. are conducting research programs in jatropha cultivation and oil extraction on eroded farmland and marginal land.
 
 SOURCE: GENERAL MOTORS CORP.

GM, DOE partner in Indian jatropha project

Posted April 1, 2010
 
 The largest U.S. biodiesel company, Renewable Energy Group Inc., idled two of its plants and laid off 22 workers on March 29 and March 30 due to the continued lapse of the biodiesel tax credit. 
 
 The company halted production at its 12-MMgy REG Ralston plant and the newly acquired 30-MMgy REG Newton facility, both in Iowa. 
 
 Since Jan. 1, REG and its independent network plants have laid off off 45 percent of their staff "as a direct result of the tax credit lapse," the company stated, and employees not laid off have taken pay cuts.
 

 On March 31, REG Chairman and CEO Jeff Stroburg sent a letter to U.S. Rep. Sander Levin, chairman of the House ways and means committee. 
 
 "It is with great urgency that I contact you," Stroburg writes. "Demand for biodiesel is extremely limited because our customers are no longer taking the risk of purchasing biodiesel without the tax credit. Manufacturing plants have idled. This dire situation is occurring not only in Iowa, but all over the country." 
 
 REG has meetings arranged with Sen. Dick Durbin and Rep. Steve King to visit Western Iowa Energy in Wall Lake, Iowa, to talk one-on-one about the tax credit with the legislators. 
 
 On March 10 the Senate passed the American Workers, State and Business Relief Act, including H.R. 4213 containing the biodiesel tax credit. As of April 1, the bill currently awaits action by the House ways and means committee. Congress returns from its Easter break on April 12 and will remain in session until Memorial Day, a period of time during which many biodiesel producers are relying on legislative action for their survival. 
 
 A Facebook page, "Reinstate the Biodiesel Blenders' Tax Credit," has been set up, and biodiesel advocates are asked to become a fan of the page.

REG idles 2 biodiesel plants, lays off workers

Posted April 1, 2010
 
 The U.S. Department of Transportation and the U.S. EPA established new federal rules on April 1 setting the nation's first greenhouse gas (GHG) emissions standards into place, and significantly increasing the fuel economy of all new U.S. passenger cars and light trucks-and clean diesels are ready to meet the challenge today.
 
 Clean diesel technology was given special mention as one advanced pathway to increasing automakers' fleet fuel economy standards. "EPA and [the National Highway Traffic Safety Administration] expect that some manufacturers may choose to pursue more advanced fuel-saving technologies like hybrid vehicles, clean diesel engines, plug-in hybrid electric vehicles and electric vehicles," the DOT stated. 
 
 Allen Schaeffer, executive director of the Diesel Technology Forum, said, "Today's announcement requiring more efficient cars will mean more clean diesel choices for American consumers in the coming years." 

 
 On March 31, Mazda announced it would bring a clean diesel car to the U.S. market in 2012, what Schaeffer called the "first evidence of what we believe will be many more announcements that underscore the role of fuel-efficient clean diesel technology in manufacturers' plans to meet these new requirements." 
 
 Starting with 2012 models, the rules together require automakers to improve fleet-wide fuel economy and reduce fleet-wide greenhouse gas emissions by about 5 percent every year. The NHTSA has established fuel economy standards that strengthen each year reaching an estimated 34.1 miles per gallon (mpg) for the combined industry-wide fleet for model year 2016. 
 
 Because credits for air-conditioning improvements can be used to meet the EPA standards, but not the NHTSA standards, the EPA standards require that by the 2016 model-year, manufacturers must achieve a combined average vehicle emission level of 250 grams of carbon dioxide per mile. The EPA standard would be equivalent to 35.5 mpg if all reductions came from fuel economy improvements. 
 
 Today, clean diesels already deliver a 10-mpg fuel savings or more compared to comparable gasoline-powered models. The diesel Volkswagen Jetta TDI is EPA-rated at 42 mpg highway while the gasoline version is rated at 29 mpg. The diesel Audi A3 TDI is EPA-rated at 42 mpg while the gasoline model is at rated at28 mpg. The diesel Volkswagen Jetta SportsWagen is rated 12 mpg better than its gasoline counterpart. The diesel BMW 335d is rated at 36 mpg and the gasoline version is rated at 26 mpg. In larger SUV segments, the Mercedes Benz GL350 BlueTEC is rated 6 mpg better than the gasoline version. 
 
 During an April 1 press conference, EPA administrator Lisa Jackson hailed that the new rules give the "certainty of a single national standard instead of a patchwork" of various rules. 
 
 The overall cost to the auto industry to implement these efficiencies is estimated at $52 billion, or approximately $950 per vehicle. These numbers are lower than earlier figures because, as Jackson said, the rule-making process has led to acquisition of better data. The added cost per vehicle is expected to be recouped by the owner within three years after the purchase, due to the savings at the pump. While the aggregate cost seems high, the net benefit of the new rules is said to be $190 billion. 
 
 Ray LaHood, transportation secretary, said his team has been working night and day to finalize these new rules, and once they have gotten a chance to sleep and the public has absorbed the rules, work on initiatives for years beyond 2016 will begin.

Diesels can meet tomorrow's CAFE goals today

Posted April 7, 2010
 

 Heartland Biodiesel Supply has developed a new patent-pending purification column design to make handling and removal of purification media easier, safer and more efficient for biodiesel plant operators. The idea behind the new design came from the water treatment industry, said Jim Westphal, owner of Heartland Biodiesel Supply. "That's where ion exchange resin is used in the largest capacity," Westphal told Biodiesel Magazine. 
 
 The same column design can be used for Eco2pure or any ion exchange resin-the only difference being the flow direction in the columns. Heartland Biodiesel Supply designates columns to be used for Eco2Pure media as HBD DRY-CLN, and those to be used with ion exchange resins as HBD ION. 
 
 The columns are built on a three-way tilt axis for easy draining, whether Eco2Pure media or ion exchange resins are being removed, and can be securely held in place while the bottom hub system is removed in one step, eliminating the need for a crew of workers and heavy equipment to exchange spent media. It also reduces workers' contact time with the spent, hazardous material, which is laden with caustic, methanol and other chemicals. 
 
 Heartland Biodiesel Supply has incorporated its proprietary distribution system into this design, which can extend the life of purification media. Westphal said many system designs on the market result in fractured flow where some of the media in the column do not come into contact with the biodiesel being purified, but Heartland Biodiesel Supply's new columns create a plug flow that allows the fuel being purified to contact all of the media present in the columns, thereby extending the life of the media at a cost savings. 
 
 The columns also come equipped with dry connect fittings so there is no liquid loss during maintenance. 
 
 The columns can be custom-ordered and start at a flow rate of 1.5 gallons/minute for $1,695. A 3.7-gallon/minute column costs $2,695. Sizes and prices go up from there. The standard material is mild steel but stainless steel columns can be special ordered at a higher cost.

Heartland develops new column design

Posted April 9, 2010
 
 The first ARIES (Automated Real-time, Remote, Integrated Energy System) biodiesel production system has been delivered to Naval Base Ventura County. ARIES is the result of a collaborative effort by the U.S. Navy, Biodiesel Industries and Aerojet to produce biodiesel using local resources. 
 
 The new system is a highly automated, transportable biodiesel production unit that can be controlled remotely. These features ensure reliable process control and optimal production yields in a sustainable system that can be readily and widely deployed.

 
 Russell Teall, president and founder of Biodiesel Industries, said, "Creating truly sustainable systems requires a thorough understanding of every aspect of biodiesel production, from feedstocks to finished products. The integrated energy system incorporated into ARIES will eventually allow us to generate our own heat and power, and feed the surplus into a local micro-grid. These energy islands will support the local community with renewable and sustainable fuel, electricity and heat."
 
 A key issue with biofuel production has been the ability to access inexpensive feedstocks that do not compete with agricultural land use or the production of food. The ability to use locally available nonfood feedstocks for biodiesel requires a flexible production process, technical expertise and control not easily associated with small-scale facilities. However, with ARIES, one data and process control center has the ability to remotely operate hundreds of scalable facilities integrated with next-generation feedstock cultivation, producing billions of gallons of biodiesel per year.
 
 "Biodiesel Industries' years of advanced work with jatropha, algae and other sustainable feedstocks are critically important to the ARIES platform," said JJ Rothgery, Biodiesel Industries' board chair. "Our proprietary methods of feedstock development make ARIES an ideal solution for creating a globally distributed network of biodiesel production facilities." 
 
 ARIES incorporates Aerojet's systems control technologies to provide real-time sensing and management of key chemistry and processing parameters. These technologies, coupled with Biodiesel Industries' extensive production database, allow automation of the entire process, resulting in enhanced yields, reliable quality control and personnel safety assurance. Remote sensing also enables monitoring and operation from a single data and process control center for biodiesel production facilities in numerous locations around the world. The capacity range of the Modular Production Unit (MPU) is 3 MMgy to 10 MMgy. The company has also designed and built a ruggedized 100,000 Mini-MPU for military use.
 
 "Aerojet's decades of automated systems expertise brings multiple benefits to Biodiesel Industries' advanced biofuel processes," said Scott Seymour, president of Aerojet. "The delivery of this first biodiesel production unit to the U.S. Navy heralds the first in what we hope are a series of successful demonstrations of our ability to deliver efficient and sustainable energy production for military and civilian use."
 
 "ARIES is ready now to be deployed on a global basis," said Michael Cassady, Biodiesel Industries' executive vice president and chief operating officer. "The ARIES platform fundamentally transforms biodiesel production and makes this possible." 
 
 Click <a target="_blank" href="http://www.biodieselmagazine.com/article.jsp?article_id=3722" rel="external">here</a> to read a Biodiesel Magazine featured article on the ARIES system and the collaboration between the U.S. Navy and Biodiesel Industries.

First ARIES biodiesel system delivered

Posted April 12, 2010
 
 Mansfield Oil Co. just announced the addition of East Fork Biodiesel LLC, a 60 MMgy biodiesel refinery in Algona, Iowa, to C&N Companies' existing portfolio of biodiesel marketing partnerships. C&N Companies is Mansfield Oil's ethanol division. 
 
 East Fork Biodiesel will leverage its location in the ethanol belt across Iowa and the Midwest to provide ethanol producers a reliable, higher-value outlet for their corn oil coproduct. 
 
 "East Fork Biodiesel fits in our network very well in terms of offering our ethanol plants a new local market for a corn oil that provides higher value than simply selling the oil contained in the DDGS into the feed markets," said Jon Bjornstad, president of C&N. "East Fork Biodiesel will have ready access to our major rail logistics hubs in Iowa and provide a reliable supply of biodiesel for our customer base of obligated parties who need to meet new biodiesel requirements under RFS2." 
 
 Chris Daniel, East Fork Biodiesel general manager, stated, "We are very pleased to have selected C&N. Their transparent approach gives us the ability to manage and forecast our costs and margins, and their access to a nationwide market of refiners and blenders in every region of the country gives us great confidence in their ability to secure us the best customers for our product today." 

 
 Mansfield executive vice president Douglas Haugh said, "I'm excited about the innovative approach to feedstocks East Fork Biodiesel is using to grow their plant production and see it as highly synergistic for many of our ethanol plant partners in the region." 
 
 SOURCE: MANSFIELD OIL CO.

East Fork to use corn oil from ethanol mills

Posted April 13, 2010 
 
 LS9 Inc. announced that its trademarked UltraClean Diesel fuel has been officially registered with the U.S. EPA, now making it eligible for commercial sale in the U.S. 
 
 Wei Huang, vice president of process and engineering for LS9, was at the 2010 National Biodiesel Conference in Grapevine, Texas, earlier this year, where she presented on LS9's technology and fuels. 
 
 The company's technology is a one-step conversion process that can ferment C5 and C6 sugars to biodiesel, renewable diesel or any number of fuels and chemicals using so-called designer microbes and fatty acid biosynthesis. Huang said the technique is "very energy efficient." 
 
 The chain length and saturation of the finished product can be controlled, depending on the enzymes used in the cells, Huang said, adding that the technology has "the highest yields, simplest process and lowest cost" of any out there today. 
 

 She characterized the feedstock and sales/distribution aspects to commercialization of LS9's technology as "two book ends" to the company's technology. "LS9 will work on the technology and will rely on partners for 'bookend' development," Huang said. 
 
 LS9 bought an existing facility in Okeechobee, Fla., for its demonstration plant and anticipates breaking ground on a commercial-scale refinery in 2011.

LS9 fuel receives EPA registration

Posted April 14, 2010
 
 Blackmer is launching a new Web site to help its existing and potential customers save energy. It's called the Blackmer Smart Energy Web site (<a target="_blank" href="http://www.blackmersmartenergy.com" rel="external">www.blackmersmartenergy.com</a>) and it was designed to help enable pump users to gain a competitive business advantage through the deployment of energy-saving positive displacement sliding vane pump technology, the new Web site states. 
 
 The site is equipped with information on energy policy, comparative data, smart energy tips and frequently asked questions, including an energy calculator to figure out how much energy could be saved by replacing existing pumps with Blackmer's sliding vane pumps. Inputs required for the calculator include energy cost in cents per kilowatt hour and brake horsepower of an existing pump for a specific application. 
 
 Established in 1903 and part of Dover Corp. since 1964, Blackmer knows pumps. In fact, the U.S. Navy, the world's largest consumer of distillate fuels, has been a Blackmer customer for more than 50 years and specifies its pumps on every ship for mission-critical fuel services. 
 
 With as much as the company knows about pumps, it recently learned that the design features of its NP Series sliding vane pumps can be used in virtually every pump activity in biodiesel plants to improve overall efficiency and performance. 
 

 The company has a suite of pumps for the biodiesel production market-the Provane, System One, ML/HXL Series, GX/X Series, and TX(S)D Series pumps-all for different applications in the biodiesel process with some overlap, from pretreatment to mixing caustic, and glycerin separation to blending of the final fuel. When Blackmer learned that one of its biodiesel customers was using its NP Series sliding vane pump throughout its refinery, it realized how versatile and efficient that particular pump design really was. 
 
 At a chemical terminal in the Chicago area, hydrogen peroxide-obviously not biodiesel but a fluid for comparison nonetheless-was being pumped throughout the terminal using air operated double diaphragm, or AODD, pumps. When those AODD pumps were replaced with the NP Series sliding vane pumps, the terminal was able to double its throughput volume while energy costs remained the same. 
 
 The design advantages of the NP Series have resulted in quieter operation, longer service life and reduced maintenance requirements, while providing significantly reduced energy consumption in several transfer applications within a biodiesel plant. 
 
 The high volumetric efficiency and low slippage of these pumps means they require less horsepower and up to 50 percent less power when handling viscous fluids. The pumps are available in five port sizes ranging from 1.5 to 4 inches with flow rates from 5 to 500 gallons per minute and operating temperatures to 500 degrees F (260 C). The versatility of the pumps allows them to be used in a variety of loading and unloading operations, including the difficult application of top-unloading railcars. According to Blackmer, the pump's tremendous suction capability also increases efficiency in the process of removing the "heel" out of a railcar or tanker truck.
 
 The key to the NP Series' versatility is Blackmer's unique sliding vane design that provides sustained, high-level performance over a wide viscosity range. NP pumps are self-priming, meaning they can run dry for short periods of time for priming and clearing lines of residual product. 
 
 The pumps have a unique head and sleeve bearing design that allows a small quantity of fluid to flow from the discharge side of the pump to the bearings. This small, continuous flow of fluid over the bearing surfaces provides a hydrodynamic film, which minimizes temperature rise for longer bearing life.
 
 NP pumps are also available in a 316 stainless steel SNP Series with port sizes ranging from 1.25 to 3 inches and flow rates from 2 to 265 gpm (8 to 1,000 lpm). While 316 stainless steel is used on all significant wetted parts, the sliding vanes and end discs are non-metallic, which reduces friction and eliminates galling.

Blackmer launches new energy-smart Web site

Posted April 15, 2010
 
 The prolonged absence of the federal biodiesel tax credit continues to take its toll on the industry as another Iowa plant, this time the 30 MMgy Western Iowa Energy LLC in Wall Lake, slows production to "warm idle" status on April 15-tax day ironically. 

 
 "Due to the continued lapse of the biodiesel tax credit, Western Iowa Energy continues to suffer from significantly limited sales and reduced sales forecasts," wrote Western Iowa Energy's board president, Bill Horan, in a letter distributed to the plant's employees and industry stakeholders. "Due to these market conditions, we have made the difficult decision to idle our facility (warm idle). Today we are laying off 15 full-time employees. This represents more than 50 percent of our staff." 
 
 Horan said Western Iowa Energy will retain 13 full-time employees on site to ensure that plant safety is not compromised, and to meet limited customer needs. "These layoffs are defined as a temporary, unpaid absence from work with a currently unknown return date," wrote Horan. "We will continue to evaluate the situation on a weekly basis based on positive or negative changes in the regulatory and commercial environment in which we operate." 
 
 "Congress' inattention to the needs of their constituency, in the form of failure to address the biodiesel blender tax credit, continues to impact the biodiesel industry in a negative manner," said Larry Breeding, Western Iowa Energy general manager, in an email. "We are hopeful that our lawmakers will choose to address this issue quickly so that we can get these citizens of Iowa back to work and productive once again."

Grim tax situation idles another Iowa plant

Posted April 19, 2010
 
 Wilks Enterprise Inc. announced that its InfraSpec VFA-IR Spectrometer, which has been marketed as a fast, easy way for nontechnical personnel to validate biodiesel blends, can also detect methyl ester content in fuel down to 0.05 percent, or 500 parts per million (ppm). 
 
 The company stated that this new application for the InfraSpec VFA-IR is important for nuclear power plants and some pipeline operators to ensure no biodiesel is present in their systems.
 
 "For nuclear power plants, fuel can be stored for as long as 10 years to power their standby diesel generators in case of an electrical power shut down," Wilks Enterprise stated. "Emergency diesel generators supply electrical power to safely shutdown the nuclear reactor in the event of a loss of normal off-site power and supply power to critical items such as cooling pumps for decay heat removal. Biodiesel is a natural food source for microbial growth and while biocides should prevent the growth of bacteria, fungi and mold, nuclear power plants cannot risk that microbial growth could clog filters and shut down the [generators]. In cold weather areas, there is also concern that the cold flow properties of biodiesel blended fuel may cause it to gel in cold temperatures and again clog filters. Therefore, it has become necessary for many standby generator operators to determine whether their fuel delivery contains biodiesel." 
 
 While Wilks Enterprise is marketing its InfraSpec VFA-IR Spectrometer for pipeline operators to ensure there is no trace biodiesel in certain fuel shipments, the airline industry will only allow up to 5 ppm-a hundred times less than what the InfraSpec VFA-IR Spectrometer can detect-in jet fuel. This, of course, has been a major roadblock in widespread pipeline distribution of biodiesel, and there is a move to approve up to 100 ppm biodiesel in jet fuel. Even so, there is still the need for more sensitive detection methods at reasonable prices. 

 
 Sandy Rintoul with Wilks Enterprise told Biodiesel Magazine that the company is conducting tests now to figure out precisely what the margin of error is for the InfraSpec VFA-IR Spectrometer when detecting down to 500 ppm. 
 
 When asked what analytical technology might be capable of detecting down to 5 ppm, Rintoul said she doubts infrared technology could detect such minute traces of biodiesel. "That is such a low level, it's next to nothing," she said. "GC (gas chromatography) wouldn't really even be able to get to those levels-and if it could, at what price would it be?"

Wilks' VFA-IR detects FAME down to 500 ppm

Posted April 20, 2010
 
 Brookhaven National Laboratory is working with SG Biofuels to evaluate the combustion properties of jatropha oil. The Upton, N.Y.-based lab selected SG Biofuels to supply seeds and oil from its Latin American jatropha plantations. 
 
 C.R. Krishna, Brookhaven's lead biodiesel researcher, told Biodiesel Magazine how Brookhaven came to choose SG Biofuels as jatropha oil supplier for this new study. 
 
 Krishna said when Brookhaven first decided to test jatropha oil, researchers had difficulty obtaining samples. "I couldn't get one," he said. "If you look on the Web, there are all kinds of companies and people that want to sell you jatropha-some in India, some in Thailand-of course some of them wanted me to wire money to them first," he laughed. "Finally I got word of SG Biofuels, they are an American company, and we started talking." 
 

 Brookhaven has studied combustion and emissions properties of biodiesel-blended heating oil for years, and it will now use the same commercial boiler it used for previous studies to test residual fuel oil blended with jatropha oil in varying blends. 
 
 "I suggested Bioheat 15 years ago but no one wanted to listen," Krishna said. "If we're looking at biodiesel, we should also be looking at the base oils-it's cheaper." 
 
 Residential oilheat furnaces are not set up to burn blends of straight vegetable oil because atomizers have trouble with the higher viscosity of SVO, but Krishna said commercial boilers can handle the thicker fuel. 
 
 Funding for this jatropha study is coming from the New York State Energy Research and Development Authority. 
 
 Kirk Haney, president and CEO of SG Biofuels, said, "As we continue our scientific and genetic efforts to enhance jatropha across a number of traits, including yield, climate tolerance and improved agronomic inputs, it's important that we continue to benchmark oil quality and performance. This partnership will provide valuable third-party research and analysis as we continue our efforts to develop elite cultivars of jatropha." 
 
 Krishna said SG Biofuels has already sent an initial sample to the lab, which was tested in a small experiment. He's expecting drum-sized quantities of jatropha oil from SG Biofuels in the next week or two. He said he will be likely testing blends of jatropha oil at 10 and 30 percent, and 100 percent too if enough jatropha oil is left toward completion of the study.

Brookhaven to test jatropha oil in boiler

Posted April 21, 2010
 
 Small biodiesel producers who cannot afford methanol recovery systems and are unsure of what to do with their methanol-laden wash water may have a new byproduct marketing opportunity to look forward to. 
 
 Jim Westphal, director at Heartland Biodiesel Supply in Missouri Valley, Iowa, said his company has been helping small producers over the past four years deal with solving the issue of what to do with wash water. "We had to find a way to utilize what we had without methanol recovery," he said. "Many producers just could not afford methanol recovery upon start up." 
 
 The biodiesel cleaning process developed by Westphal and company involves a combination of methods. Biodiesel is first passed through a dry-wash process using a combination of Eco2Pure and ion resin where the soaps and free glycerin are removed, along with other minor contaminants. Then the biodiesel is run through a water-washing process to remove residual methanol, after which the methanol/water stream is run through a proprietary filter system to remove any residual fuel or remaining contaminants. The result is a purified blend of methanol and water. 
 
 Westphal said that mixture is perfect for methanol-water injection systems, aftermarket devices for diesel engines used for performance and heavy hauling. He said Heartland Biodiesel Supply will market its injection fluid under the name "Go-Juice." 
 
 Methanol-water injection systems, which can range in price from $300 to $800 dollars, come with a pump, special nozzles and fitting accessories. Methanol-water injection systems can increase fuel mileage, add horsepower, cool combustion and exhaust temperatures, thereby helping reduce NOx formation. A special tank can be bought for the system, or the vehicle's existing windshield washer fluid tank can be used. 
 

 Westphal said his company has also developed a windshield washer fluid from the same biodiesel waste-stream recovery process to be marketed under the name "Bio-Juice." 
 
 He said the company is also working on new ways to utilize waste glycerin but gave no further details.

Repackaging a biodiesel waste stream

Posted April 26, 2010
 
 German engine maker Deutz AG released a service fluid recommendations announcement on April 26 approving various blends of biodiesel for different engine applications, ranging from the standard European B7 blend to B30; and in some cases Deutz approves the use of neat biodiesel, or B100. 
 
 All Deutz engines from Tier 4 Interim/Stage III B are approved for B7 use. "This is possible because Deutz engines, looking to the future, have been designed to be compatible with environmentally acceptable fuels," the company stated. "The result is the optimum interaction between fuel and engine." 

 
 Deutz also issued further approvals for running Tier 3 engines on biodiesel. 
 
 The TCD 2015 engine series, which Deutz bills as "the engine for construction equipment," is now approved for B100. 
 
 Also, the TCD 2013 4-valve commercial vehicle series for Euro 4/5 emissions standards has been approved for running on B30. 
 
 Of course, the company only approves methyl esters meeting the European quality specification, EN 14214.

April 2010

Business Briefs

Business Briefs

Columns

Biodiesel Jobs and Purification

Biodiesel Purification Options

Featured

JOBS: Judgments on Biodiesel Stimulus

Crystal Clear Fuel

April 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

Biodiesel Jobs and Purification

Biodiesel Purification Options

Featured

JOBS: Judgments on Biodiesel Stimulus

Crystal Clear Fuel

April 2010