A month ago, as I wrote the January issue&rsquo;s Editor&rsquo;s Note, the fate of the U.S. biodiesel tax credit was uncertain while the lame-duck Congress worked on a monster tax bill that included the subsidy. But we&rsquo;ve seen that before&mdash;all throughout 2010 the credit was in, then stripped out, then in another bill, then stripped out again&mdash;so gun-shy biodiesel industry stakeholders were not convinced this last attempt would pan out, and there was still a real possibility of entering the new year without the incentive. But in the 11th hour, the bill was ushered through the House and Senate, and signed by President Obama the following day.
 As soon as the credit was signed into law, Biodiesel Magazine staff editors and I picked up the phones and talked to producers, to get their thoughts on the credit being reinstated retroactively to Jan. 1, 2010. We got a lot of great responses, interesting insight and ultimately mixed reactions on the one-year extension, now good through 2011. Some producers banked on the reinstatement all along, and sold B99 in anticipation of getting paid back by the government. Others weren&rsquo;t so trusting, and stopped selling B99 for B100 instead, passing the risk onto buyers. Of course, some producers stopped producing altogether, and the even less fortunate ones went out of business during the past year. All the people we spoke with, however, despite how different their stories or experiences within the past year, have serious concerns over the lack of a long-term policy goal with respect to biodiesel, and fear the industry will be in the exact same position next year if it cannot convince Congress to support and pass a multiyear biodiesel incentive and the EPA to increase the biomass-based diesel volume requirements of RFS2. For the full story, check out the article we compiled on page 10 of this issue.
 Speaking of this issue, if you&rsquo;re reading this in early February, there is a good chance you are doing so in sunny Phoenix, at the National Biodiesel Conference &amp; Expo. I look forward to attending it, as I have for the past five years, and hearing the most recent developments and trends in the biodiesel industry. We will be writing reviews from the conference, so if you can't make the show, stay tuned to www.biodieselmagazine.com for our coverage of the latest information and breaking news. Also, look for our April print issue, in which we will review the event&rsquo;s general and breakout sessions.

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It's Back

In many U.S. states, automobile owners must have their vehicle inspected at least annually. In addition to improving public safety, an inspection can alert a car owner to developing maintenance problems, permitting the owner to address the issue without experiencing a breakdown or a more serious, expensive repair. An annual inspection (or other periodic review) of a company&rsquo;s legal issues can likewise help a company nip potential legal problems in the bud and avoid more complicated and expensive legal problems.
 For some companies, a normally slow business period offers an opportunity to schedule an audit of the company&rsquo;s legal situation. Companies having less predictable activity cycles must instead reserve time to review legal issues.
 Performing a periodic review enables a business to anticipate and plan future legal tasks, budget for associated costs or revenues, take advantage of otherwise unappreciated business opportunities and, sometimes, minimize or avoid legal disputes.
 The components and comprehensiveness of a legal review should correspond to the types of legal issues and likely degree of involvement that a company anticipates facing. Issues commonly reviewed include a summary of legal disputes involving the business that arose since the previous review, including those that have been resolved and those that remain pending; planning for reasonably predictable disputes the company may face prior to the next review, especially including strategies for avoiding or more efficiently resolving them; contingency planning for unexpected, but foreseeable disputes in which the company may become involved; the appropriateness of the business&rsquo; current corporate structure and, especially for smaller businesses, a review of succession and estate planning issues that may accompany the departure of a principal.
 More issues to think about during an annual legal review include examination of tax treatment of the business&rsquo; revenues and expenses, and strategizing to obtain the most beneficial tax treatment possible; consideration of anticipated or potential business transactions and development of strategies to maximize the associated business advantage; an update of recent changes in federal or state laws and regulations that affect the business or its operations; review and planning relating to legal liability of the business to its employees, customers, and others on account of the business&rsquo; operations and liability of suppliers and contractors to the business attributable to their operations; consideration of legal issues that are foreseeably raised by the company&rsquo;s immediate and future business plans (especially those plans that represent a departure from the past); consideration of how the legal process may ease or advance aspects of the company&rsquo;s business plans; review of compliance by the business and its customers, suppliers, and contractors with existing contracts; review of the manner in which the company secures and protects its intellectual properties, such as trademarks and service-marks, inventions, and confidential information; and reconsideration of the company&rsquo;s personnel policies, including those relating to benefits, employee obligations, and changes to employment status.
 Regarding this last item, a company&rsquo;s periodic review with its counsel of employment-related issues can be particularly useful in connection with, or as a prelude to, a corresponding periodic review of those policies by the company with its employees.&nbsp;
 Of particular interest to biodiesel and other alternative energy companies recently are tax credits and other developmental incentives offered by the federal, state, and local governments. Availability, eligibility criteria, and other program details change frequently and can be difficult to follow for one whose job duties do not include remaining abreast of program changes. As individuals whose careers depend on current knowledge of such details, accountants and attorneys can be a valuable source of information regarding these programs. Attorneys active in the field can often provide insight into which activities and arrangements are more likely than others to draw the attention of regulatory and law enforcement officials, providing businesses the opportunity to avoid unnecessary scrutiny.
 In short, a periodic review of legal issues&mdash;like an annual automobile inspection&mdash;can identify, and sometimes resolve or avoid, problems that might require far more complicated and expensive solutions if discovered later. Furthermore, regular meetings between a company and its counsel can improve counsel&rsquo;s knowledge of the company&rsquo;s operations, enabling counsel to better anticipate and respond to the company&rsquo;s legal needs. Author: Gary D. Colby Attorney, Dilworth Paxson LLP (215) 575-7075 <a href="mailto:gcolby@dilworthlaw.com">gcolby@dilworthlaw.com</a>

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Annual Legal Checkup

We&rsquo;re all aware of the challenges and opportunities with biodiesel, including the raw feedstock source, production, distribution and infrastructure. A critical area often overlooked is compatibility and acceptance by end users actually burning the biodiesel: the engine and vehicle manufacturers. As biodiesel becomes increasingly accepted and recognized as an alternative to petroleum diesel, end users in the value chain will want assurances their engines and vehicles won&rsquo;t see any adverse effects. This includes decreased durability and reliability, increased service requirements, and changes to emissions and performance. They want the guarantee that using biodiesel will be totally transparent to their products and their customers.
 How are these assurances given to end users? The answers are, with comprehensive testing at both the engine and full-vehicle levels; and biodiesel testing at all phases and steps of the development process, including pilot plant stage, volume ramp-up, process demonstration and validation, and full production.&nbsp;
 Since the early 1970s, Roush has been associated with performance products and NASCAR racing. Building from that racing heritage, Roush has 35 years of experience as a full-service engineering and product development company in all areas of the transportation, military and other industries. Roush specializes in vehicle and powertrain development and testing, including dynamometer engine testing, chassis rolls and emission testing, and real world mileage accumulation. The 50 Roush dynamometers are capable of running engine performance, durability, fuel economy and other development on virtually any type of fuel. Our climatic chambers and engine dynamometers are capable of engine testing from minus 40 degrees Celsius to 90C (minus 40 degrees Fahrenheit to 194F).&nbsp;&nbsp;
 Roush can generate testing data and engineering feedback for the biodiesel developer or manufacturer very early in their development process. As little as 40 to 80 gallons of biodiesel can be enough to provide directional results and indications on performance, versus conventional diesel fuels. Such small quantities of fuel can be used to demonstrate performance, impact on engine calibrations, power, fuel economy and emissions data, and to identify hardware implications from biofuels. This data can be very valuable at the early stages when formulations are still in the development process.
 As producers scale up to process demonstration volumes, testing can continue to develop along with it. With hundreds or thousands of gallons available for testing, Roush can verify quality and performance, and engine dynamometers can then begin to run durability phases, in which the engines can be run longer, from tens to hundreds of hours.
 At this phase, additional performance and emissions testing can be achieved. Areas prone to problems associated with the fuel system, such as degradation of fuel injectors and fuel pumps, can be identified. These issues, if undetected and resolved, would become apparent to the customers in the form of increasingly noticeable power loss from the engine.
 Roush can easily take an engine that has run for an extended period of time, tear it down to the critical components&mdash;valvetrain, bearings, rotating and reciprocating assemblies, fuel systems and more&mdash;and compare those to a new engine or one run on petroleum-based diesel. Any difference that might indicate increase or unusual wear is noted, and can be referred to our engineering group and the fuel producer for additional investigation. At this time, new and alternative blends of fuels, including blends such as B10, B20 and higher, can easily be evaluated.
 Both at this stage and as increased volume of any given company&rsquo;s biodiesel is available, real-world on-road testing and performance can become valuable indicators of the fuel quality and equivalency to petroleum diesel. Roush can build proof-of-concept demonstration vehicles containing new hardware or hardware changes for the unique fuels, or take fleets of existing vehicles and run them on biodiesel blends. With our Over-the-Road Testing group, Roush accumulates more than 30 million miles annually on vehicles ranging from cars to light-duty trucks, up to Class-8 commercial trucks. What&rsquo;s the goal of all this testing? To provide accurate data for good, sound engineering decisions.
 In short, the end user will want a diesel fuel that offers all the benefits of biofuels without impacting their products, and no compromises in quality and performance levels. Solid testing data can provide the proof that manufacturers and end customers require. Author: Steven Ross Director-Business Development, Roush Industries (734) 779-7736 <a href="mailto:steven.ross@roush.com">steven.ross@roush.com </a>

2011/01/12947833913331.Ross-02

Satisfying the End User 

Almost a full year after it expired, the $1 per gallon U.S. biodiesel blender tax credit is back, reinstated in the 11th hour by a lame-duck Congress in a giant $850 billion tax package. After a year without its driving subsidy, which caused major uncertainty and disruption in the market, industry reaction is mixed: many are excited to recoup a retroactive check and survive another year, even grow; yet those same individuals express concern over short-term relief with no real long-term certainty. &ldquo;The debate and delay has caused a lot of damage for us,&rdquo; says Bernie Crowley Jr., vice president of Delta American Fuel LLC, a 40 MMgy biodiesel plant in Helena, Ark. Even though capital dried up in the past year, the tax credit&rsquo;s retroactive reinstatement &ldquo;might be a light at the end of the tunnel,&rdquo; Crowley says. &ldquo;I think we&rsquo;ll see biodiesel start to grow again.&rdquo;
 Administrative Manager with Minnesota Soybean Processors Kim Collin tells Biodiesel Magazine that the company produced most of last year, albeit at a much lower rate, but in November it was forced to shut down biodiesel production altogether. Now, employees reassigned to other operations at the complex are shifting back to making methyl esters. &ldquo;We&rsquo;ve seen an increase in orders,&rdquo; she says, adding that the plant will be at full production in a month or two.
 &ldquo;We&rsquo;re going to be busier than ever before,&rdquo; says Chris Peterson, vice president of Hero BX in Pennsylvania. &ldquo;The tax credit coming back will bring back some of the small, second-tier oil companies, blenders&mdash;not obligated parties&mdash;that just weren&rsquo;t able to finance biodiesel without the dollar.&rdquo;
 Interestingly, 2011 will be the first time the tax credit and the implemented biomass-based diesel mandate under RFS2 will coexist. And RFS2, along with its renewable identification number (RIN) credits, provided the only real lifeline for much of the industry in the past year, initiating a near revolution in the business model of biodiesel companies. Before the tax bill passed, RIN prices rose to surpass the value of the credit, keeping plants alive as they adjusted to what seemed to be a new era. &ldquo;One of our biggest deals was education in terms of RIN markets,&rdquo; Peterson says, adding that Hero BX&rsquo;s education then spilled over to its customers, many of whom are not obligated parties. &ldquo;Essentially what we had to do is go through and model&mdash;okay, petroleum diesel or heating oil is at this price, biodiesel is at $1.10 more, but the RINs are worth 65 cents and you get 1.5 RINs per gallon, and then you can sell those RINs so you are actually buying biodiesel with the RIN value at a 5- or 10-cent discount to petroleum.&rdquo;
 Hero BX began 2010 by selling B99, in hopes of a quick extension, only to switch to selling B100 after a few months passed. &ldquo;We essentially just transferred that liability, that risk, onto our customer,&rdquo; Peterson says. Crowley tells Biodiesel Magazine, &ldquo;We stayed scared about this, because we sold a lot of B99 on good faith.&rdquo; Klaus Ruhmer, North American business developer for the major biodiesel technology provider BDI BioEnergy International AG, acknowledges an issue some in the industry are concerned about: companies that receive the retroactive payment may not be the companies that deserve it, and that time will tell whether &ldquo;gentlemen&rsquo;s agreements&rdquo; between parties on the disbursement of funds will be honored.
 &ldquo;On the blenders credit, our reaction is mixed,&rdquo; Ruhmer says. &ldquo;On the one hand, it&rsquo;s good&mdash;and very important&mdash;for our customers, existing producers. For them we are glad. But by renewing it for only one more year, we&rsquo;re insuring that there won&rsquo;t be any investments. People interested in investing need stability in the market place.&rdquo;
 Leif Forer, general manager of the 1.4 MMgy Piedmont Biofuels in Pittsboro, N.C., holds mixed reactions too. &ldquo;I feel like it&rsquo;s created a bunch of instability in the market and that has done a lot of damage,&rdquo; he says. &ldquo;I know that people will be investing in plants again, which will help the industry and us. But, I know that it&rsquo;s scheduled to go away again, and that&rsquo;s going to hurt just as bad as it did this last time when it lapsed. It&rsquo;s such a wild card that I sometimes wonder if we&rsquo;d be better off without the darn thing. I know it&rsquo;s crazy to say that, because it&rsquo;s not what conventional wisdom says.&rdquo;
 As a member of the National Biodiesel Board&rsquo;s RFS2 Working Group, Forer says he is working hard to push EPA to increase biomass-based diesel volumes required in the federal standard, helping stabilize the market and increase RIN prices, which are expected to bottom out with both the credit in place and the beginning of the new annual reporting period. Forer also says we can expect feedstock prices to rise with the reinstatement. &ldquo;When we first started production, when the tax credit first came into existence, we started using soy oil, and it didn&rsquo;t take long of course before soy started trading a dollar more a gallon,&rdquo; he says.
 And while producers who survived the past year are ramping up production, they all believe if a tax credit is to exist at all, it must be a long-term, multiyear plan to bring investment and stability back. Lisa Mortenson, CEO of the 10 MMgy Community Fuels plant in Stockton, Calif., says, &ldquo;What we need is a certain framework for 2012. There are mechanisms in the market that can adjust and compensate for the lack of a tax credit, but the market needs to have that information so it can react.&rdquo; She adds, &ldquo;One year is a very short horizon for business planning.&rdquo;
 Crowley says, &ldquo;I just wish the political process would give us a clear message for some sort of period of time, and we would find a way to deal with it.&rdquo;

ROLL OUT: Community Fuels steadily increased output volume in late 2010 at its 10 MMgy facility in Stockton, Calif., according to CEO Lisa Mortenson. â€œWe stayed in both steady production and steady sales throughout 2010, but we are forecasting high

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Producers express mixed reactions on return of tax credit

Reinstated: The Buck is Back

Field pennycress, also known as stinkweed, may be an ideal biodiesel feedstock in Canada due to its superior cold flow capabilities and ability to grow on marginal cropland. A project initiated by All Peace Industries and its owner Stan Peacock aims to relocate an existing idle 17.5 MMgy biodiesel plant from Warren, Mich., to a location in the High Prairie region of northwestern Alberta for the production of pennycress biodiesel.
 The Michigan-based plant is currently owned by The Power Alternative Inc. According to TPA President Jim Padilla Jr., his company not only intends to sell its plant to All Peace, but will also serve as a partner in the Alberta project. &ldquo;We&rsquo;re already in partnership with All Peace as far as developing the pennycress feed and the potential for it,&rdquo; Padilla said.
 While All Peace is still working to secure necessary funding, Padilla estimates the plant could be up and running in Alberta by the third or fourth quarter of 2011. That timeframe is based on TPA&rsquo;s initial experience installing the plant in Warren. &ldquo;Having been through the launch curve and everything else with our facility here, we&rsquo;re going to bring that capacity online quickly for them,&rdquo; Padilla says.

a new home: The Power Alternative Inc.â€™s 17.5 MMgy biodiesel plant is slated to be relocated from Warren, Mich., to Alberta, Canada, early this year. 

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Alberta project works to make pennycress biodiesel a reality

Stinkweed Smells of Potential

Like their U.S.-based counterparts, German biodiesel producers appear to be facing the same economic plight, as macroeconomic factors have affected decisions whether to severely scale back production or completely shut down.
 One producer in particular, EOP Biodiesel AG, announced in December that it had declared insolvency, meaning it was unable to meet financial obligations with lenders in order to obtain working capital to remain operating. EOP Biodiesel, which operates a 132,000 metric-ton (39 MMgy) rapeseed-based production facility in Falkenhagen, said in a statement that insolvency proceedings were opened in district court. Horst Piepenburg of Dusseldorf Law Firm was appointed provisional insolvency administrator for EOP Biodiesel.
 &ldquo;The company has suffered immensely from ramifications of an inadequate strategy in the past,&rdquo; says EOP Biodiesel CEO Jorg Jacob, in a company statement. In October, it halted production following damage to its rapeseed oil mill, but EOP Biodiesel&rsquo;s board &ldquo;dismissed the notion that damage of the oil mill in October might have contributed to the current status.&rdquo;
 In its statement, the company said it sold approximately 120,000 metric tons of biodiesel in spring 2010, which accounted for 90 percent of its planned output for the entire year. Bengt Korupp, EOP Biodiesel&rsquo;s chief production officer, states, &ldquo;We have taken all required steps in order to start up the mill by early January again. That is still our plan. We want to carry on with production again.&rdquo;
 According to Frank Bruhning, spokesman for the German biodiesel industry association Verband der Deutschen Biokraftstoffindustrie e.V. (VDB), the German industry has a production capacity of nearly 5 million metric tons per year (1.5 billion gallons). He notes that several factors are causing other producers to shut down, one of them being a tax on B100 that came into effect in 2007.
 &ldquo;Prior to the B100 tax, much of the biofuel market consisted of biodiesel,&rdquo; Bruhning tells Biodiesel Magazine. &ldquo;In 2010, most of the biodiesel was sold into the blending market. But, the mineral oil companies have a tendency to buy their supply from larger [biodiesel] producers rather than from smaller ones. There were quite a few companies that went down as a result.&rdquo;
 Subsidized biodiesel from the U.S. continues to flow into European ports, Bruhning says, coupled with a differential export tariff from Argentinean biodiesel that continue to make German biodiesel prices uncompetitive. Additionally, a new directive is set to begin in January in which biofuel producers in Germany and Austria will need to certify their rapeseed and rapeseed oil will be sustainably farmed. In December, Germany imposed a more flexible calculation of certified biofuel feedstocks for a temporary period up to June 30.
 &ldquo;The sustainability certification might help a bit in keeping out subsidized product,&rdquo; Bruhning says, &ldquo;unless the U.S. and Argentina get that sustainability certification themselves, of course.&rdquo;

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How economic factors could deflate a once robust German biodiesel industry

In Search Of a Turnaround

The U.S. biodiesel industry may be dominating the headlines due to a reinstated tax incentive, but other countries are also producing positive news, proving there is more to biodiesel&rsquo;s success than any one tax credit. A Belarus-based chemical products manufacturer has commissioned BDI-Bioenergy AG to build a 15 MMgy biodiesel facility. The government has guaranteed land for growing rapeseed, the initial feedstock to be used at the plant, and BDI will provide all the engineering services and specific technical equipment, all while coordinating the start-up of the plant. The plant will use an enzymatic degumming process in a way that, according to BDI, is &ldquo;environmentally sound&rdquo; and &ldquo;extremely economic.&rdquo;
 While the future facility near Russia&rsquo;s eastern border shows that one particular thermoplastic and polyester production company is in favor of sustainable energy production&mdash;and is willing to prove it&mdash;there might be more to it. &ldquo;The commission from Belarus is highly significant,&rdquo; says Wilhelm Hammer, CEO of BDI. &ldquo;The development of alternative energies from renewable sources is a global trend that cannot be stopped.&rdquo;

BDI lands plant contract in eastern Europe

More to it in Belarus

Its slogan, &ldquo;What Can Brown Do For You?&rdquo; may be a fitting open-ended description for the global customer base it serves when it comes to its respected parcel delivery services, but UPS is also facilitating the movement of environmental and sustainable awareness through its philanthropic funding arm, The UPS Foundation.
 In November, The UPS Foundation doled out nine grants totaling approximately $2 million dedicated to environmental programs and organizations worldwide, all of which address issues of climate change, renewable energy, resource conservation and other environmental causes that are championed by UPS volunteers. The UPS Foundation added environmental sustainability to its official philanthropic focus areas in 2008.
 The Earth Day Network was awarded $200,000 to help fund its new Sustainable Transportation Project, which is a K-12 education initiative that includes curricula that provide sustainable transportation lesson plans, pilot tests of school-based biodiesel production facilities at four schools, and a corresponding media communication campaign.
 According to UPS spokeswoman Ronna Branch, the projects will also be documented and shared with a worldwide audience on Earth Day TV and other venues, to showcase EDN&rsquo;s advocacy of biodiesel and its environmental benefits. &ldquo;It&rsquo;s our responsibility to do not only our part in reducing the amount of effects that we have on the environment, but to also try and encourage new projects like the EDN that can help better the environment,&rdquo; Branch says.
 Previously, the EDN was awarded $150,000 from The UPS Foundation in 2009 to help fund its &ldquo;No Idling&rdquo; campaign, which involved developing curriculums for teachers to teach their students about the environmental effects of idling a vehicle versus turning a vehicle off in car pool, school bus and other forms of transportation, to reduce harmful emissions. &ldquo;[This most recent grant] is a continuing partnership that we have with them,&rdquo; Branch says. &ldquo;The Sustainable Transportation Project is the next step in that.&rdquo;
 Since 2008, The UPS Foundation has donated $9.3 million to 138 environmental organizations. Grants are provided to both U.S. and international organizations, with local grants recommended by UPS employee committees.
 &ldquo;Not only do we provide the opportunity for our employees to apply for grants in the organizations they take part in, but we also look for recommendations on ones we should give larger grants to, that make the greatest impact on the environment,&rdquo; Branch says.

KEEP ON TRUCKINâ€™: The UPS is a strong advocate of biodiesel use, not only in its own fleets of delivery vehicles, but also on the municipal and community level.

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UPS believes biodiesel is critical to environmental stewardship 

Special Delivery 

Just days after the tax credit was reinstated, the U.S. biodiesel industry received more good news. The U.S. District Appeals Court for the District of Columbia issued a unanimous decision on Dec. 21 to deny a petition that was filed by the National Petrochemical Refiners Association and the American Petroleum Institute in March on the U.S. EPA&rsquo;s combined RFS2 volume requirements for 2009 and 2010.
 In the petition, NPRA and API claimed that the EPA&rsquo;s issuance of retroactive volume requirements under the final RFS2 rule would unfairly penalize both refiners and consumers. While neither organization challenged the RFS2 program as a whole, the petition argued that EPA&rsquo;s inability to issue volume requirements in the timetable required by Congress resulted in unfairness regarding implementation of the policy.
 More specifically, the petition alleged that the EPA&rsquo;s RFS2 rulemaking for 2009 and 2010 volume requirements was in violation of the statutory requirements of the program, which require volume mandates for each year to be issued by Nov. 30 of the previous year. The petition also claimed that the retroactive nature of the 2009 volume requirements was impermissible, and that the rulemaking violated statutory lead time and compliance provisions.
 &ldquo;This is a disappointing decision,&rdquo; says API senior policy advisor Patrick Kelly. &ldquo;Setting requirements to blend certain biofuels for the previous year is a legally questionable retroactive action.&rdquo; While Kelly notes that his organization supports a realistic and workable RFS2 program, the court&rsquo;s decision may set a troublesome precedent for the program. &ldquo;This decision significantly complicates compliance and may set a dangerous precedent allowing retroactive requirements for past compliance periods.&rdquo;
 The NPRA has also expressed disappointment in the court&rsquo;s ruling. &ldquo;The retroactive regulation by a federal agency establishes a deeply troubling and potentially far-reaching precedent,&rdquo; says NRPA President Charles Drevna. &ldquo;We&rsquo;re disappointed that the court did not overturn what is clearly a flawed and misguided approach toward implementation of the federal renewable fuel standard. Regardless of the court&rsquo;s ruling, however, NPRA and its members remain committed to working towards the overall implementation of the RFS program.&rdquo;
 While API and NPRA are clearly disappointed in the court&rsquo;s decision, the biodiesel industry has enthusiastically embraced the ruling. &ldquo;This [decision] wholly validates the U.S. biodiesel industry&rsquo;s legal position and sends a clear, unambiguous signal to the marketplace that the common-sense goals established in the RFS2 program will be met,&rdquo; says Manning Feraci, the National Biodiesel Board&rsquo;s vice president of federal affairs. &ldquo;This lawsuit was the final piece of uncertainty creating market disruption for the biodiesel industry,&rdquo; adds Gary Haer, Renewable Energy Group Inc.&rsquo;s vice president of sales and marketing, and new NBB chair. &ldquo;Today&rsquo;s decision is an important sign that our nation is moving full-steam ahead to meet our energy independence and greenhouse gas emissions reductions goals.&rdquo;

Upholding the RFS: A unanimous opinion by Judge Judith Rogers of U.S. District Court of Appeals for the District of Columbia has denied a petition challenging the RFS2. Joining in the decision were Circuit Judges Douglas Ginsburg and Merrick Garland.

2011/01/12948451935971.jpg

Court upholds EPA's renewable fuel requirements

RFS2 Scores a Victory

Don&rsquo;t tell Ever Cat Fuels LLC that the equity market has dried up. The biodiesel producer managed to raise $2.1 million in equity financing from a private placement round. In all, the company seeks to raise a total of approximately $2.25 million, according to a regulatory filing through the U.S. Securities and Exchange Commission.
 For Ever Cat Fuels, the equity funds will be used for additional equipment purchases and upgrades to its 3 MMgy multifeedstock production facility in Isanti, Minn., according to Dave Wendorf, director of marketing for Mcgyan Biodiesel LLC. Ever Cat Fuels, which came online in 2009, licensed its process technology from Mcgyan Biodiesel LLC, a firm that is commercializing a novel process pioneered by Augsburg College researchers Clayton McNeff, Arlin Gyberg and Ben Yan.
 &ldquo;The private placement took about six months to complete,&rdquo; Wendorf says, adding that demand to fulfill Minnesota&rsquo;s B5 mandate was a driving force behind Ever Cat Fuels&rsquo; successful run to stay in business all of 2010, despite a lapsed tax credit. &ldquo;We haven&rsquo;t experienced any issues at all,&rdquo; Wendorf adds. &ldquo;In fact, with the lapse of a credit, the value of the RINs was also at a point where they almost took the place of a credit.&rdquo;

MCMONEY: Ever Cat Fuels in Isanti, Minn., raised 2.1 million in equity recently to upgrade its 3 MMgy Mcgyan biodiesel plant. 

2011/01/12948464932461.jpg

How one producer raised capital in tight economic times 

Ever-Flowing Equity

Work is underway that could eventually help approval of higher biodiesel blends in new diesel vehicles equipped with particulate filters that employ late post-injection for regeneration.&nbsp; A joint study between the German oilseed council UFOP and Volkswagen is investigating ways to partition late-post injection to help reduce dilution of engine oil.
 Diesel particulate filter regeneration is required to burn off soot, or particulate matter (PM), collected in the filter to help meet U.S. EPA&rsquo;s PM reduction requirements. Extra fuel is injected late in the combustion cycle not to be burned but rather to be sent through the exhaust valves and straight into the filter, located downstream in the exhaust system, in order to create a rich condition for soot burn-off. In late post-injection, some of the fuel injected late in the combustion cycle, especially fuel sprayed onto the cylinder walls, can make its way past the oil rings and accumulate in the engine oil crankcase. Petroleum diesel fuel volatizes off, but due to biodiesel&rsquo;s different properties and higher distillation temperature, the bio portion of the fuel that enters into the crankcase tends to accumulate, causing dilution issues and premature engine wear from degradation of engine oil. Some OEMs avoid this issue altogether by injecting fuel directly into the exhaust system, just upstream of the filter, rather than using the already existing fuel injection infrastructure on the engine. The downstream injection approach, however, costs more due to the added hardware.
 Regarding dilution with varying biodiesel blends, the UFOP/Volkswagen study found that &ldquo;the splitting of the late post-injection in two partial injections lowered the fuel entry into the engine oil in comparison with a late, undivided post-injection during operation of the engine with B7 by approximately 20 percent, and with B30 by approximately 27 percent.&rdquo;
 While this is positive, and shows that automakers are serious about understanding and incorporating biodiesel, UFOP further states that the tests &ldquo;clearly demonstrated that the early post-injections subsequent to the main injection can have a considerable share in the engine oil dilution if partial amounts of the fuel jets encounter the cylinder wall. The early post-injections should be incorporated in future potential investigations. However, the emissions, consumption and vehicle handling must not [be] negatively [impacted].&rdquo;

BIG DEAL: If the UFOP/Volkswagen study is any indication, splitting late post-injection could minimize dilution issues with biodiesel, allowing higher blends to be approved by a greater number of engine makers.

2011/01/12948467503828.jpg

New study may get to the bottom of biodiesel dilution issue 

Splitting Late Post-Injection

South Korea and the U.S. have more in common than that difficult relationship each shares with the Asian country&rsquo;s neighbor to the north. It turns out South Korea hopes to implement a renewable fuel standard, making petroleum and biofuels mixtures a must. The Ministry of Knowledge Economy and the Korea Institute of Petroleum Management first considered an RFS several years ago, and now it appears that a plan to start a nationwide mandate in 2013 may come a year early, taking effect in 2012. The hope is to raise biodiesel content in domestic diesel to 3 percent from the current 0.5 percent, according to W.H. Leong, vice president of Carotech Inc., a Malaysian-based biodiesel producer. South Korea has been a very small market for palm biodiesel, Leong says, and although there are rumblings from unnamed sources inside the ministry that have indicated its desire to start an RFS a year early, &ldquo;it will still take a while,&rdquo; Leong says. Discussions on the mandate began in 2007.

2011/01/12948470556733.jpg

The nation's hopes for the future aren't just about the North

An RFS for South Korea? 

Madrid-based IIMA Consultora aligned with local Gambian company WOMY in 2007 to found Envergy Gambia Ltd., to promote a jatropha-to-biodiesel project. The main objective is to increase the cultivation of jatropha in Gambia.
 According to the IIMA, jatropha farming not only provides feedstock for biodiesel production, it also aids in the recovery of degraded and highly eroded soil while acting as a carbon sink. Harvesting of jatropha seeds also provides valuable employment opportunities, which are crucial to the development of West Africa.
 The project is in its first phase, which has included the construction of a seedling production center that is equipped with a greenhouse that can produce an estimated 2 million seedlings per year. Currently, 114 hectares (282 acres) of jatropha are being cultivated. According to IIMA, 4 hectares of that area has been equipped with irrigation systems.
 The Envergy Gambia project has been specifically designed to benefit small family farms of approximately 5 hectares. Additional support is provided to these families through micro-credit grants for women. IIMA estimates that the first phase of the project will increase jatropha cultivation to a total of 5,000 hectares while providing employment to more than 1,000 local families.
 Future phases of the program will involve the installation of oil extraction equipment and a power system that will produce approximately 3.9 megawatts of electricity by burning the waste cake that results from seed crushing. Those interested in participating in the project, or developing similar initiatives, are asked to contact IIMA.

Multiplying Benefits: Jatropha cultivation can provide significant environmental and economic benefits to families in Africa. Oil gathered from the plants seeds can be converted to biodiesel, and the remaining seed material can be burned for electric

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Envergy Gambia Ltd. seeks biodiesel project participants

Joining Up for Jatropha

No team wins the Super Bowl with defense alone. It takes a strong defense and an effective offense to win. That was the case last year when the Saints beat the Colts in Super Bowl XLIV and it will be the case this year as we watch the action from Arizona at the Biodiesel Conference &amp; Expo Super Bowl Party. For the past two and a half years, the biodiesel industry has been under attack and has mounted an impressive and successful defense. As we continue to deploy our strong defense of the industry, the time has come for a striking offense to put some serious points on the board.
 Established Defense
 Recent examples of the National Biodiesel Board&rsquo;s defensive strength include 8,200 comments submitted to the U.S. EPA during the RFS2 comment period; persuasive and accurate formal comments on the draft rule that ultimately secured a role for all domestic feedstocks for biodiesel production in RFS2; a stepped-up sustainability program that developed empirical data to refute unfounded criticisms about sustainability, including a massive communications campaign to educate reporters and editorial boards of major news publications; a successful campaign to secure renewal of the biodiesel tax incentive despite impossible odds, and a successful outcome of the petroleum industry lawsuit over the RFS2, of which NBB was an intervener; and a large list of continued technical successes including growing OEM support, progress in pipelines, progress in Bioheat markets and fuel quality.&nbsp;&nbsp;
 These hard-fought defensive successes have forged new pathways, disarmed threats, safeguarded valuable opportunities and stomped out fires. And now it is time to execute a powerful offense.
 Offensive Counter
 This year, with unprecedented new support from farmer members and the Soybean Checkoff, NBB is introducing a bold, new, national communications initiative. This aggressive offensive move is aimed at reinvigorating the positive image of biodiesel and to properly define it as America&rsquo;s Advanced Biofuel rather than a conventional biofuel. This bold communications and outreach project will target influential opinion and thought leaders. The program, called the Advanced Biofuel Initiative, will highlight the multiple benefits of our fuel and dispel misinformation that has unduly harmed biodiesel&rsquo;s image. It will also better position biodiesel to capture a significant portion of the 1.35 billion gallon advanced biofuel market created by the RFS2 in 2011.
 In addition the many beneficial offensive plays of the initiative, it will also further help us address predictable attacks on biodiesel related to food prices, land use change, and other unwarranted criticism that is likely to tackle our industry as we recover and return to a position of growth. So far checkoff funders have committed more than $3 million for this project. This is new funding that goes above and beyond their traditional level of support. This figure is also more than double NBB&rsquo;s current communications budget and will grow the overall NBB budget by nearly 25 percent. The program is intended to continue for three years in an effort to fill existing information voids among those audiences that have the potential to be the most influential, or conversely the most detrimental.
 The Play Book
 The Advanced Biofuel Initiative offers a balanced game plan and includes strategic advertising as well as targeted one-on-one outreach. The scope of the Advanced Biofuel Initiative is designed to make a notable and lasting impact within narrowly defined audiences. Advertising will be primarily targeted in Washington and will include local television, radio, print, and internet advertising.&nbsp; Also, for the first time in the industry&rsquo;s history, we are slated to run a national cable ad spot. This bold advertising campaign will be matched with strategic tactics to strike rumors and misinformation at their root.Targets for these efforts will be focused on environmental and animal agriculture leaders, the leading sources of misinformation and negative publicity about biofuels. Strategies include one-on-one outreach, building partnerships and alliances, a presence at leading industry gatherings, and regionally based outreach and participation.
 This generous new support of U.S. soybean farmers could not have been better timed to help provide a much-needed shot in the arm to the beleaguered biodiesel industry. It is a tremendous leveraging opportunity that allows industry contributions to be applied primarily toward our ongoing policy objectives. While I can&rsquo;t yet wager who will take home the big win at this year&rsquo;s Super Bowl, I am confident it will be the team whose offense compliments its defense. I am excited to see how far this time-tested strategy will take our industry.
 Joe Jobe, CEO, National Biodiesel Board

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Advanced Biofuel Initiative: Time for the Offense to Take the Field

The City of New York is a billion gallon home heating industry. Recently two dozen industry leaders and feedstock suppliers from 10 states participated in the New York Bioheat &ldquo;The Big Apple Tour&rdquo; to see firsthand what exactly is happening in the big city. The event spotlighted New York&rsquo;s love for biodiesel and Bioheat, featuring prominent users such as Central Park through the department of parks, and the city&rsquo;s sanitation department. The National Biodiesel Board organized the trip to help showcase the outstanding potential for biodiesel.
&nbsp; Participants met with community leaders including Councilman Jim Gennaro, who was among those who championed and ultimately secured a 2 percent Bioheat mandate citywide, which will consume an estimated 20 million gallons of biodiesel annually; Peter Iwanowicz with the New York governor&rsquo;s office, who is actively working to support a statewide requirement; New York Assemblyman Marc Alessi, whose enthusiasm for biodiesel was evident as he emphasized the critical need for renewable fuel alternatives.&nbsp;&nbsp;
 Among the comments from New York leaders, several stood out as capturing the value biodiesel can bring to their efforts.
 Keith Kerman, chief of operations for the city&rsquo;s parks and recreation department, said, &ldquo;We will turn over all our core vehicles to diesel, mostly to use your product. B20 is a simple, quick solution. Why we&rsquo;re not all doing it is beyond me.&rdquo;
 John Maniscalco, New York Healing Oil Association, said, &ldquo;You&rsquo;re my fix and my solution. You&rsquo;re going to take my product and make it cleaner and greener.&rdquo;
 While in New York, leaders visited the New York Mercantile Exchange. Just steps from Ground Zero, the exchange handles billions of dollars worth of energy products and other commodities being bought and sold, and is the world&rsquo;s largest physical commodity futures exchange. Participants also toured Metro Energy, one of New York&rsquo;s leading biodiesel and Bioheat distributors. Metro Energy is currently building a biodiesel plant in the shadows of New York&rsquo;s skyscrapers. The 100 MMgy biodiesel plant promises to be one of the largest in the country.&nbsp;&nbsp;
 New York Assemblyman Marc Alessi summed up the event and the power of biodiesel in the area by saying, &ldquo;I find this extremely exciting. The future is here in terms of what we can do, whether legacy heating, electrical generation, in cars, in trucks. B20 blended into any system can grow our production and use; and it&rsquo;s here, right here, right now.&rdquo;

NBB organized a New York event to showcase biodieselâ€™s potential in this billion gallon home heating industry.  Participants heard from a variety of local leaders and users. 

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Many prominent New York staples rely on biodiesel for effective operations, including Central Park.  Here participants meet with representatives from the New York City Department of Parks & Recreation and the New York City Department of Sanitation.  

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New York wants your product!

With the 2011 National Biodiesel Conference &amp; Expo underway, it is not&nbsp; too early to start thinking about 2012.
 The biodiesel industry will return to the site of one of its most well-attended conferences as it heads back to Orlando, Fla., in 2012. &ldquo;We are excited to return to Orlando where, in 2008, the National Biodiesel Board hosted nearly 4,000 biodiesel stakeholders at our conference,&rdquo; said Joe Jobe, NBB CEO. &ldquo;2008 was a great year for the U.S. biodiesel industry and we are expecting 2012 to be another great conference.&rdquo;
 The four-day event will be held at the Gaylord Palms Resort &amp; Convention Center, Feb. 5-8, 2012.&nbsp; Ron Marr, Biodiesel Manager for Minnesota Soybean Processors in Brewster, Minn., has attended the conference since 2005. &ldquo;Attending this conference has always been well worth the time, money and effort spent to attend,&rdquo; Marr said. &ldquo;This is the place where all the ingredients making up the industry come together.&rdquo;
 Orlando is a worldwide destination with an abundance of theme parks and sunshine. &ldquo;Orlando is a great place to hold an event like our conference because it is a great destination city with lots to offer, not only to our attendees but also to their families,&rdquo; Jobe added.&nbsp;
 Located just 15 minutes from the Orlando International Airport, the Gaylord Palms Resort &amp; Convention Center is convenient in many ways. Its expansive exhibit halls, meeting spaces and hotel rooms are all under one roof. With numerous restaurants and night spots under that same roof, networking is made easy.

The National Biodiesel Conference & Expo returns to Orlando for the 2012 show. 

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2012 Biodiesel Conference & Expo returns to Orlando

In February 2010, the biodiesel industry was facing nothing but questions. RFS2 had just been released mere days before the National Biodiesel Conference &amp; Expo, the biodiesel tax incentive had been expired more than a month with a very unclear legislative path, and the production outlook for the industry was not a positive one.
 This February the industry is coming together at the conference with a whole different outlook. The RFS2 is beginning its first full year as a real program with clearly defined parameters, the biodiesel tax incentive has been passed and signed into law through the end of the year, and the production outlook shows 2011 could bring record production numbers for the biodiesel industry. What a difference a year makes.
 New National Biodiesel Board Governing Board Chairman Gary Haer, of biodiesel producer Renewable Energy Group Inc., says that with all the uncertainty out of the way from 2010, the biodiesel industry is in as good a position as it has ever been.
 &ldquo;Last year the industry was facing a very uncertain future,&rdquo; Haer said. &ldquo;This year the market is bullish and moving forward.&rdquo;
 Much of that certainty comes from biodiesel&rsquo;s position as an advanced biofuel in EPA&rsquo;s statutory definitions as part of the RFS2. Biodiesel is poised to fill a significant portion of the 1.35 billion gallon advanced biofuel market created by the RFS2 in 2011, and producers stand ready to meet that demand. With all the uncertainties out of the way that the industry was facing this time last year, the biodiesel industry can now get back to what it does best&mdash;producing a renewable, cleaner-burning, domestic, advanced biofuel.

The biodiesel industry, then and now:  2010 uncertainties settled for 2011

National Biodiesel Board members play a major role in defining the long-term objectives and programs for their trade association. Members recently completed an online survey to provide input and identify priorities for the draft 2012 NBB Program Plan, which will cover October 2011 to September 2012. The comprehensive, directional plan for the biodiesel industry will be the No. 1 order of business at the membership meeting on Tuesday, Feb. 8, at the National Biodiesel Conference &amp; Expo in Phoenix.
 Developing the NBB Program Plan takes shape over the course of several months. Through technical, marketing and regulatory meetings, a member-led process identifies opportunities, as well as issues facing the industry. In addition to committee meetings, direct member input, and a survey, the planning process also includes a webinar presentation and member review. This allows NBB to prepare a clear direction to ensure the trade association continues to meet members&rsquo; needs.
 &ldquo;In order for the industry to meet the challenges facing it, we must have a comprehensive plan,&rdquo; said NBB vice chair Ed Ulch. &ldquo;The NBB Program Plan encompasses technical, marketing, legislative and regulatory priorities, and is the key mechanism to make sure the NBB is serving its members in the best way possible.&rdquo;
 The planning process captures member input and is a way to share association priorities with members. NBB staff and contractors are constantly interacting with biodiesel companies, regulators, users, engine and vehicle companies and distributors to better understand the needs and priorities of the industry.

NBB continues planning process at Biodiesel Conference & Expo

Leveraging dues income with other sources of funding is an important service the National Biodiesel Board provides its members. The NBB development program works to fund the NBB program plan and to educate members about available funding resources. In 2010, NBB funded work and projects in the program plan by leveraging member dues dollars with a 2:1 match. For every dues dollar that NBB receives, it is able to leverage two dollars from other sources like the soybean check off and federal programs. The funding allows NBB to address important issues such as sustainability, fuel quality, engine testing, and developing new markets such as Bioheat.&nbsp;
 Some of the development highlights in 2010 were:
 &bull; Securing additional Department of Transportation funds to support engine testing, fuel quality enforcement, and feedstock development
 &bull; Securing new U.S. DOE funds to directly support the feedstock development program
 &bull; Collaborating with other alternative fuel organizations for DOE grant funds to&nbsp; support biodiesel market education
 &bull; Developing partnerships with organizations such as the National Governor&rsquo;s Association and the National Association of State Energy Officials
 &bull; Educating producer members about funding opportunities at U.S. EPA, DOE, DOT, and USDA as well as in some individual states
 The ability to bring in outside revenue, instead of relying solely on NBB membership dues, allows for a much more concentrated effort in Washington for important policy efforts. While soybean checkoff&nbsp; funds and federal grant moneys support many of the NBB core projects, membership dues continue to be primarily directed to&nbsp; policy and lobbying efforts. This ability to leverage membership dues with other sources of funding is an important part of what NBB does for its members.

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NBB development program leverages resources, dues dollars 

A new analyzer for biodiesel distillation testing is now available. The Grabner Minidis ADXpert distillation analyzer works for both B100 and unknown samples and requires no prior distillation knowledge before testing. The unit uses fast thermocouple temperature regulation and small sample sizes to avoid erroneous recovery readings caused by mining solvents, condensates or raffinates, according to Ametek Petrolab, the Oklahoma-based company that produces the new analyzer. The unit also features an automatic cleaning system that removes residuals and eliminates flask cleaning. Along with biodiesel, the analyzer can also test various gasoline, jet fuel, biofuels, diesel products, solvents, aromatics, organic liquids and chemical blended samples. The unit can be remotely controlled and, according to Ametek, it can also be easily integrated into most existing laboratory information management systems. Regina, Saskatchewan-based Clean Power Concepts Inc. has obtained rights to exclusive patent technology capable of extracting protein to make aquaculture and other value-added feed products out of lipid sources from biodiesel plants. Originally developed as a result of scientific research conducted by the Canadian Department of Fisheries and Oceans, CPC President and CEO Michael Shenher says the patented technology is ideal for extracting proteins from canola meal where it then can be converted into livestock, chicken and fish feed products. The newly-acquired patent technology would be ideal for financially distressed biodiesel manufacturing refiners or existing producers running on reduced capacity. Shenher says the company intends to deploy the newly-acquired patented technology within its existing biodiesel production plant in Regina, a 20 MMly canola-based refinery operated by CPC&rsquo;s subsidiary General Bio Energy Inc. Although the plant has been idle for nearly a year, Shenher said the patents should revitalize its own canola operations significantly. Plans are in the works to build a large-scale canola crush plant in a decentralized location away from its production plant in Western Saskatchewan to supply canola oil feedstock to biodiesel producers. A research team at Texas AgriLife Research, a division of the Texas A&amp;M University System, is developing an optical-electronic sensor to aid in commercial-scale algae production. The system is designed to monitor algae growth in real-time, allowing for increased efficiency. According to Alex Thomasson, the AgriLife Research engineer leading the project, the sensor system essentially emits a beam of energy that interacts with an algae culture. The response is measured at multiple wavelengths to determine the optical density of the algae. While handheld sensor devises do exist on the market to complete similar evaluations, Thomasson says his team has identified commercial need for an automated, real-time, highly repeatable measurement solution. Thomasson says his team designed the sensor system to utilize multiple wavelengths of light, increasing reliability. While the actual wavelengths measured by the system have not been released, information released by Texas AgriLife Research states that Thomasson and his team experimented with wavelengths ranging from 250 to 2,500 nanometers.
 Barrington, Ill.-based EcoloCap Solutions Inc. has selected Triad Constructors Inc. out of Fenton, Mo., as the installation and commissioning partner for its new biodiesel technology. According to EcoloCap, Triad Constructors will be utilized for the sales, distribution, installation and commissioning of new Nano Processing Waste biodiesel processing units sold in North America. The company&rsquo;s website states that the units can convert a broad range of feedstock into biodiesel without preprocessing. &ldquo;Through our nanotechnology and use of additive we reduce chemical consumption and production costs significantly,&rdquo; EcoloCap states on its website. &ldquo;We also offer a glycerin refining process that will refine glycerin to medical grade 99-plus percent.&rdquo; The system is guaranteed to produce ASTM-quality biodiesel and is designed to be run in a hybrid batch/flow process. The system also includes an automated quality monitoring system and features increased alcohol recovery capabilities. The company further states that the system features a remote system control that can be accessed via the internet, can produce 900 to 18,000 gallons of biodiesel a day, and can be outfitted with an optional glycerin refining processor. Researchers at Oak Ridge National Laboratory have discovered that treating biodiesel with a high-intensity dose of ultrasonic energy can remove and prevent the formation of precipitates. The project, led by Michael Kass, a researcher in ORNL&rsquo;s Energy and Transportation Science Division, could help overcome one of the primary problems associated with the use of biodiesel in cold climates. The project was funded internally by ORNL through $20,000 in seed money. Although the work included small-scale preliminary study, Kass says the results have been intriguing. Precipitates form in biodiesel when the temperature of the fuel drops to near the cloud point. Although they are not visible, Kass said that those precipitates remain in the fuel even when its temperature increased. Robert McCormick, a principal engineer with Golden, Colo.-based National Renewable Energy Lab, provided Kass and his team with a paper that summarized the latest work on precipitates. The resulting experimentation revolved around ultrasonically treating soy-based biodiesel samples to determine the effect on precipitates. Although the research did not address the potential impact of ultrasonic treatment on cloud point, Kass said that, in theory, it should. With support from Invest Toronto, Energy Innovation Corp. has proposed to repurpose an 8,600 square-foot building into a biodiesel production facility with an initial annual output volume of 5 MMly (about 1.3 MMgy). Located in Toronto's downtown core in the port lands area, the future facility will be located on a site with existing ship, truck and rail transportation infrastructure that could be leveraged for feedstock sourcing and biodiesel marketing. According to Patrick Dwyer, EIC vice president of communications, the company is shooting for full operation by spring 2011. Locally grown flax seed initially would be the feedstock of choice for the planned facility. Utilizing a hybrid continuous flow/batch system, the company plans to extrude the flax seed into oil for biodiesel production and take the remaining meal for use as animal feed, or have it further milled into flour to be sold in the Ontario food market, Dwyer says.
 The joint venture between National Clean Fuels Inc., a Houston-based energy and clean technology company developer, and DC Biofuels LLC, an urban-based biodiesel company in the city of Washington, is one step closer to completion. In June, NACF completed a definitive agreement with DC Biofuels to work in conjunction with them to develop a 10 MMgy biodiesel production facility. Now, the two organizations have signed a letter of intent to solidify the partnership. NACF will continue to provide funding for the facility and help develop a fleet demonstration of DC Biofuels biodiesel. Using waste vegetable oil from local restaurants and institutions, the two companies hope to showcase the biodiesel through use in a municipal fleet based in the Mid-Atlantic region. The Port of San Francisco may be the new home to a 10 MMgy biodiesel production facility. After nearly two years of multiple reviews and environmental analysis assessments, the Port Commission of San Francisco approved a proposal by Darling International to convert part of a tallow rendering plant into a biodiesel facility. In 2006 there was interest in biodiesel, according to Richard Berman, regulatory specialist for the real estate division of the Port of San Francisco. At the time, Darling International was sending tallow products off to cosmetics and soaps manufacturers, and then the company proposed to divert some of that to biodiesel, Berman says. &ldquo;We agreed upon a set of terms for them to modify their lease, which would allow them to make biodiesel.&rdquo; The Port initially approved the project, but due to objections by members of the community, the process was stalled. A researcher at the University of Arkansas has created the first methane-producing microorganism that can metabolize complex carbon structures. The project could lead to the development of a microbial process to recycle waste products, such as glycerin from biodiesel plants, into a renewable form of natural gas. According to David Lessner, an assistant professor of biological sciences who is leading the research, the project focused on methanogens, which are methane-producing anaerobic microorganisms. &ldquo;These are microorganisms that grow only in anaerobic&mdash;or oxygen free&mdash;environments, but they are found in very diverse environments,&rdquo; he says. &ldquo;They grow by producing methane gas as an end product.&rdquo; One of the primary limitations of methanogens in methane production is that they are only able to digest a very limited range of substrates, Lessner says. To produce methane in nature, these mircoorganims must work in a consortium with other microorganisms that break down complex carbon sources into compounds they can consume. The basic premise of the study was to provide a methanogen microorganism with the genetic ability to break down more complex compounds and produce methane. The research focused on a strain of methanogen known as Methanosarcina acetivorans, which Lessner says can naturally consume more substrates or chemicals than most other methanogens. &ldquo;But, it&rsquo;s still limited,&rdquo; he says. The project involved isolating a gene from a strain of bacteria that is able to consume a wide range of substrates, but cannot produce methane. The gene was transferred from the bacteria to the methanogen.

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METHANOGEN-MANIA: University of Arkansas assistant professor Dave Lessner says while Methanosarcina acetivorans can consume more substrates than other methanogens, it is, however, still limited. 

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Business Briefs

While electric and hybrid vehicles garner most of the fanfare as the next-generation of ecofriendly transportation, clean diesels are making noise of their own&mdash;in a big way. Stigmatized in the U.S. as loud and dirty, the latest iterations are getting better with every new model year. Technological advancements in fuel and engine platforms, improved fuel economy, biodiesel compatibility, increased torque, complex emissions control systems and exceptional resale value are just some of the reasons why diesel-powered vehicles are preferred in many parts of the world.
 Interestingly, the U.S., where diesel passenger vehicles never really caught on, has seen an uptick in public interest for diesel-powered vehicles lately, and this trend is expected to pick up, according to information compiled by the U.S. Coalition for Advanced Diesel Cars. Its Executive Director Jeff Breneman tells Biodiesel Magazine that, from January 2009 to January 2010, consumers preferred a diesel powertrain over their gasoline-powered or hybrid counterparts. This shift in buyer propensity, Breneman describes, is defined as a &ldquo;take rate.&rdquo;
 &ldquo;The take rate for the hybrid models are actually lower than that of the diesels right now,&rdquo; Breneman says. &ldquo;Overall, we&rsquo;re seeing an average 10 to 15 percent take rate for the hybrids and more like a 30 to 50 percent take rate for diesels right now. We&rsquo;ve seen take rates of nearly 50 percent on a number of diesel models and even higher on a few, such as the Volkswagen Jetta and Audi A3. And most of the SUVs, like the Audi Q7 and Volkswagen Touareg, are all between 40 and 50 percent.&rdquo;
 Similarly, industry prognosticators like JD Power and Associates forecast a significant increase in diesel light-duty vehicle sales within the next two to three years, with the electric vehicle and hybrid markets expected to trail behind diesel&rsquo;s emergence, according to Michael Omotoso, senior manager global powertrain. &ldquo;For the past couple of years, it&rsquo;s been in the 2 percent range,&rdquo; Omotoso says. &ldquo;We expect that number to go up to 7 percent in 2015 and to 8 percent by 2017, which is the end of our forecast period.&rdquo;
 While there are some diesel vehicles available in the U.S., they largely remain a minority market. Because a market for heavy-duty pickup diesel models already exists there, Omotoso is seeing German automakers like BMW, Mercedes, Audi and Volkswagen exploiting the niche diesel passenger luxury vehicle segment, with a high percentage of diesel passenger vehicles set to launch in the coming years.
 For BMW, market acceptance for both its U.S. diesel passenger offerings, the 335d sedan and X5 xDrive35d, have gained significant momentum during 2010, according to spokesman Dave Buchko. &ldquo;Sales of the 335d are up 162 percent so far [in 2010] compared to last year, and X5 xDrive35d sales are up 106 percent from [2009],&rdquo; Buchko says. &ldquo;So far [in 2010], nearly one in four X5s sold in the U.S. is a diesel.&rdquo;
 Much of the growth in U.S. diesel sales, according to Omotoso, hinges on Corporate Average Fuel Economy standards, which prescribe specific greenhouse gas (GHG) emission reduction and improved fuel economy targets across all model fleet types, and clean diesels are expected to help achieve those goals.
 With emissions and fuel economy standards set both in the U.S. and abroad, many automakers are already testing biodiesel to see how the advanced biofuel will help them reach federally mandated fuel efficiency and emission targets.
 Biodiesel&rsquo;s Factor 
 For nearly 90 years, Fiat has been synonymous with introducing some of the most cutting-edge diesel engine technology on the market. The Multijet engine, which was produced in 2009, is an example of Fiat&rsquo;s innovative work on the diesel motor. But this is not to say that the Italian original equipment manufacturer (OEM) hasn&rsquo;t come head-on with challenges to ensure its products are capable of running on higher biodiesel blends.
 Although European diesel powertrains are currently capable of running on the continent&rsquo;s 7 percent mix of biodiesel in its diesel pool, Fiat has begun additional testing of higher biodiesel blends in preparation for a potential increase from B7 to B10. Pier Franco Ciselli, of Fiat&rsquo;s Alternative fuels division, says implementation likely won&rsquo;t be until 2012 or 2013. &ldquo;B10 is something that we are going to explore quite carefully in the next year,&rdquo; Ciselli says. &ldquo;However, nothing will be launched on the market by Fiat before a clear specification is decided.&rdquo;
 In light of its cautious yet calculated approach to testing B10 in future diesel engines, Ciselli says Fiat is actively testing B20 and B30 blends within closed heavy-duty fleets.
 Although virtually all diesel engines are approved to run on B5, Fiat is just one in a long line of other OEMs grappling with the issue of solving biodiesel&rsquo;s tendency to contribute to fuel dilution in the engine oil crankcase, and clogging of fuel filters, the latter notably in cold weather.
 In the U.S., General Motor Corp.&rsquo;s Duramax 6.6-liter turbo diesel engine is capable of running on B20. The new Duramax will power the redesigned 2011 Chevy Silverado and GMC Sierra heavy-duty pickups, as well as the Chevrolet Express and GMC Savana full-sized vans. According to Shilesh Lopes, senior fuels engineer for GM, the company made some notable modifications and upgrades for its fuel system to be compatible with B20.
 &ldquo;Specifically for biodiesel, we upgraded all of our seal and gasket materials to withstand the ester content of biodiesel, and we included an improved fuel filter that includes a coalescing element,&rdquo; he says. &ldquo;We also modified our fuel heating strategy to specifically address the biodiesel issue since biodiesel naturally has a higher cloud point. What we&rsquo;ve done is we basically brought the heating utensils right to the fuel filter so that any new clogging of the filter could be avoided.&rdquo;
 Across the pond, German engine manufacturer Deutz AG, which manufactures engines for automotive, agriculture, marine, mobile and gen-set applications, released a service fluid recommendations announcement last year approving various blends of biodiesel for different engine applications, ranging from the standard European B7 blend to B30. 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, according to the company.
 Biodiesel inherently reduces most tailpipe-out and greenhouse gas emissions, but advancements in emission reduction technologies, such as selective catalytic reduction systems, lean NOx traps and exhaust gas recirculation as different means to control nitrogen oxides, and diesel particulate filters for soot collection&mdash;all of which are driven by government regulations&mdash;already make the new clean diesel models clean. A good thing can always get better, and while diesels have come a long way in improving efficiency, emissions and public appeal, the U.S. EPA and U.S. DOT&rsquo;s National Highway Traffic Safety Administration released proposed regulations to establish the nation&rsquo;s first standards to improve the fuel efficiency and reduce the GHG emissions of medium- and heavy-duty vehicles. The regulations are essentially an extension of the Clean Cars Program, which established similar requirements for light-duty vehicles earlier this year. The agencies proposed new standards for three categories of heavy-duty trucks; combination tractors, heavy-duty pickups and vans, and vocational vehicles. For combination tractors, the agencies have proposed engine and vehicle standards that begin with model year 2014 vehicles and achieve up to a 20 percent reduction in carbon dioxide (CO2) emissions and fuel consumption by model year 2018. For heavy-duty pickups and vans, the proposal separates gasoline and diesel truck standards. Diesel-fueled vehicles must achieve a 15 percent CO2 and fuel reduction. Both standards would be phased in from model years 2014-&rsquo;18. Finally, the proposal would require vocational vehicles to achieve up to a 10 percent CO2 and fuel consumption reduction between the same model years. The final rule is expected to be published soon, but the proposal indicates that the diesel technology has no time for stagnation as improvements are always being sought, even when those being improved upon are themselves models of accomplishment.
 What To Expect in 2011&mdash;And Beyond
 French automaker Peugeot plans to introduce a diesel-electric version of its 3008 series crossover HYbrid4 model by spring. The car can operate in three driving modes: electric-only, diesel-only or a combination of both. The diesel hybrid achieves 69 mpg and can go zero to 60 mph in 8.8 seconds.
 Japanese automaker Mazda has officially announced plans to launch its clean diesel Mazda6 model to the U.S. by market in 2012. In addition, the company intends to introduce its SKY-D diesel engine, which Mazda promises to increase fuel economy by 30 percent over its current 2.2L diesel (not available in U.S.). Mazda says the vehicle will return at least 43 mpg. The engine is part of a new family of SkyActiv diesel engines with an all new transmission called Sky-Drive. Already under the hood in models sold in Europe and Japan, the design is expected in the U.S. market by sometime in late 2013 or early 2014, according to Mazda spokesman Jeremy Barnes.
 Also, as reported by Biodiesel Magazine last year, the future may hold an interesting marriage between ethanol and diesel emissions control if Tenneco Automotive&rsquo;s plan to use E85 instead of urea dosing for SCR NOx control catches on. There is an established E85 infrastructure that could double as reductant stations so when drivers of SCR-equipped diesels run out of the dosing agent, they can fill up at one of hundreds of E85 stations across the U.S.
 Omotoso says expect more fuel efficient diesel engines in GM&rsquo;s line of light-duty trucks in the coming year or two. The company developed a 4.5L diesel engine that it was initially going to launch in its light-duty pickups, but pulled it out due to the economic collapse of 2008 and eventual bankruptcy. &ldquo;The engine is developed and ready to be launched,&rdquo; Omotoso says.
 Omotoso also expects Nissan to use Renault&rsquo;s diesel engines in its future diesel passenger and light-duty models. &ldquo;They have 4-cylinder and 6-cylinder diesel engines that we expect to see in the Maxima and Altima in the coming year or two.&rdquo;&nbsp;
 No matter what new clean diesel vehicles are introduced, one fact remains, according to Breneman. &ldquo;At the end of the day, every country needs a portfolio of vehicle technologies,&rdquo; he says. &ldquo;Clean diesels are simply one of them that have undergone dramatic improvements over the years. Overall, the technology has improved and they&rsquo;re still fun to drive.&rdquo; Author: Bryan Sims Associate Editor, Biodiesel Magazine (701) 738-4974 <a href="mailto:bsims@bbiinternational.com">bsims@bbiinternational.com</a>

ITALIAN INNOVATION: Fiat\&#39;s 1.3L Multijet II engine is one of the company\&#39;s signature developments in common rail technology.

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SPLIT DECISION: Public interest in optional diesel engines, where available, has been strong. The percentage favors consumers that buy the diesel engine option versus those selecting the hybrid on vehicles that offer choice, which points to a glaring

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Clean diesel technology greatly improves efficiency and emissions profiles of compression-ignition power

Clean  Diesel  Developments

Hybrid trucks are already in commercial production, and with Peugeot&rsquo;s pending launch of the world&rsquo;s first diesel-electric hybrid passenger car, the industry is poised for considerable growth. Although the U.S. lags behind Europe in terms of favoring light-duty diesel applications, interest may soon grow as the European market takes off.
 The environmental benefits of diesel hybrid technologies are impressive, allowing for an average fuel consumption saving of 20 to 35 percent. When biodiesel is added to the fuel mix, the environmental benefits are even more pronounced, especially when it comes to carbon dioxide emissions.
 In mid-2011, Peugeot will launch the world&rsquo;s first production-scale diesel-electric hybrid passenger car. The 3008 HYbrid4 features an average fuel consumption savings of 35 percent. A traditional two-liter, 163-horsepower diesel engine mounted in the front of the vehicle, and a 37-horsepower electric engine mounted in the rear, provide the car with a maximum power output of 200 horsepower, says Peugeot spokesman Martin Alloiteau. The electric motor can be used as the primary power source during city driving, adds Peugeot spokesman Laurent Debure, but can also be used to boost performance during highway driving.
 The 3008 HYbrid4 can be driven in three different modes. The ZEV&mdash;or Zero Emissions Vehicle&mdash;mode allows the driver to run the vehicle in an all-electric mode when in the city. When placed in auto mode, the electronic components of the car automatically control the entire system, including transitions between the diesel engine and electric motor. Finally, four-wheel drive mode allows both powertrains to work together, with the rear wheels driven by the electric motor and the front wheels powered by the diesel engine.
 Although the Peugeot&rsquo;s 3008 HYbrid4 is particularly notable for its hybrid technology, Debure adds that great care has been taken to ensure the car meets Peugeot&rsquo;s high-performance standards as well. &ldquo;We&rsquo;ve maintained the driving pleasure of the car, which is very important for our brand,&rdquo; he says. &ldquo;We don&rsquo;t only talk about the low fuel consumption of the vehicle, but also try to focus on its performance and drivability. It is a clever wedding between the diesel and electric engines, and we are using the most efficient technologies for this hybrid solution. That&rsquo;s why we think our world premier will be a success. It&rsquo;s not a boring car, and it has been designed to be a pleasure to drive.&rdquo;
 While production-scale diesel-electric hybrid passenger cars are a new development for the industry, diesel hybrid technology has been commercially available in heavy-duty trucks for several years. In fact, Eaton Vehicle Group has been working to develop electric hybrid systems for two decades and has been producing them commercially since 2007. The company also began offering a hydraulic hybrid system in 2010.
 Eaton provides its technology to major truck and bus manufacturers around the world. The company offers several hybrid technologies, all of which are fuel neutral and can be added to diesel powertrains, says James Parks, Eaton&rsquo;s manager of global communications-hybrid. Eaton&rsquo;s hybrid electric technology maintains the conventional drivetrain architecture and is designed to recover power typically lost during braking, and stores it in batteries. The company also offers two hybrid hydraulic systems: one that offers regeneration and launch assist, and another that completely replaces the conventional drivetrain.
 Volvo Bus Corp. also has several different hybrid technologies in production today, including those designed for the European and North American markets. The company has been working to develop its diesel hybrid technology since 2002 and began vehicle production in 2006. &ldquo;We started the industrial-scale production in May 2010,&rdquo; says Edward Jobson, Volvo Bus environmental director, noting that before reaching industrial production, his company did on-demand building.
 Volvo&rsquo;s diesel hybrid buses are able to achieve a 30 to 35 percent reduction in fuel consumption in the city, and a 20 to 30 percent reduction when highway driving. The Volvo 7700 Hybrid model is what&rsquo;s known as a parallel hybrid. This means that the diesel engine and electric motor can work either independently or in unison to power the bus. The electric motor is used to start the vehicle and can power acceleration up to approximately 20 kilometers per hour (12.5 mph). When traveling at higher speeds, the diesel engine takes over, supplying the power. Batteries used to power the electric engine are charged by both the brakes and the diesel engine.
 Markets, Demand, Cost
 Peugeot&rsquo;s 3008 HYbrid4 vehicle has been designed specifically for the European market. The car will initially be available only in Eastern and Western Europe. Diesel passenger cars in the U.S. don&rsquo;t have a very good image, which is why hybrid diesel cars&mdash;at least in the beginning&mdash;will be designed for the European marketplace, says Alloiteau. That doesn&rsquo;t mean the vehicle won&rsquo;t be introduced into other markets in the future, but in the beginning it really makes sense to focus on Europe, he says.
 &ldquo;The European market is very keen on diesel engines,&rdquo; says Debure. In fact, Alloiteau notes that at least half of the passenger cars on European roads are equipped with diesel engines. According to Debure, diesel hybrids are also significantly more efficient and less expensive than their gas-electric hybrid counterparts. &ldquo;We have chosen to do the diesel because our diesel engine has very good fuel consumption performance, so it was a good base to make a hybrid,&rdquo; Debure says. &ldquo;If we had chosen a gas engine with higher fuel consumption, it would be difficult for us to reach our objectives in terms of reducing consumption.&rdquo;
 &ldquo;In Europe, we are facing very demanding norms in terms of reductions of emissions,&rdquo; Alloiteau says, noting that the carbon dioxide reduction goals are particularly demanding. Our brand is a leader in the field, and we want to maintain our position, he says. In fact, the 3008 HYbrid4 is just the beginning. Since the HYbrid4 technology is built into the rear suspension of the vehicle, it&rsquo;s very adaptive to similar platforms and will be added to more Peugeot and Citro&euml;n vehicle models in the future. &ldquo;The technology will expand to other cars&mdash;not small cars and very compact cars in the beginning, but more on the medium and medium-high segment of cars,&rdquo; Alloiteau says. &ldquo;In 2015, we think for Peugeot and Citro&euml;n the sales on the open market could be approximately 100,000 cars equipped with hybrid diesel technology.&rdquo;
 While the price of the 3008 HYbrid4 has not yet been released, it&rsquo;s clear there will be a price premium when compared to traditional diesel passenger vehicles. However, a significant portion of the additional cost can be recouped through fuel savings. The price premium for diesel hybrid technology is also expected to reduce as the technology is transferred to additional models and economies of scale improve.
 Increased future demand for diesel hybrid technology is not exclusive to passenger cars. Volvo also supplies gas-powered buses to the market. Since the May 2010 launch of its 7700 Hybrid diesel model, Jobson notes that his company has sold more hybrid diesel buses than gas buses. In fact, Volvo has received orders for nearly 200 hybrid buses in its first six months of production. In mid-December, the company secured its largest single order to date when bus operator Arriva ordered 27 Volvo 7700 Hybrid buses, which will be used in Dordrecht, Netherlands.
 &ldquo;Customers are very happy with the hybrid, with the performance, the reliability and the fuel consumption, of course,&rdquo; Jobson says. &ldquo;Also&mdash;dare I say&mdash;the pricing.&rdquo; Even though hybrid technology does add cost to the vehicle, Jobson says that most customers understand that they can save money over the lifetime of the vehicle. Many also see it as a sort of insurance to protect them from rising oil prices, he continues. Strong demand also means that Volvo will be offering more hybrid options to its customers in the future.
 While Peugeot and Volvo are most active in the European marketplace, Eaton has been more active in North American markets. &ldquo;The majority of our sales are in North America; with China, city bus sales growing quickly,&rdquo; Parks says. &ldquo;We&rsquo;re working hard to grow in Europe, but a lot of the manufacturers there are vertically integrated and, when it comes to hybridization, they&rsquo;re trying it themselves.&rdquo; Even with obstacles in the European marketplace, Parks says interest in Eaton&rsquo;s products has been growing quickly. &ldquo;Sales have increased steadily since production began in 2007, and we absolutely expect that to continue,&rdquo; he says.
 Like Volvo, Eaton has received extremely positive feedback from its customers, many of whom are placing additional orders. &ldquo;Some of our earliest customers, who [bought] one or two trucks, are now returning and placing orders for 10 or more hybrids at a time,&rdquo; Parks says. Eaton is also working to expand its offering. &ldquo;We&rsquo;re definitely working to improve the systems and offer our customers more combinations that better fit the needs of their customers,&rdquo; he says.
 Considering Biodiesel
 Eaton&rsquo;s hybrid systems are all designed to be fuel-neutral, and are compatible with biodiesel. &ldquo;It really doesn&rsquo;t matter what fuel runs through the truck with our system,&rdquo; Parks says. &ldquo;We really don&rsquo;t touch the fuel.&rdquo; Rather, each manufacturer employing Eaton&rsquo;s hybrid technologies likely has its own unique thresholds and guidelines for biodiesel use in its vehicles.
 According to Debure, Peugeot&rsquo;s 3008 HYbrid4 is compatible with fuel containing up to 30 percent biodiesel. &ldquo;All of our diesel engines are compatible with B30,&rdquo; he says. Customers who chose to fuel their vehicles with biodiesel-blended fuel will compound fossil-fuel reduction benefits that the hybrid can achieve on its own. This is because the hybrid technology alone can reduce fossil fuel usage by approximately 35 percent. A diesel hybrid fueled by B30 will further reduce consumption of fossil fuels by nearly one-third.
 Volvo&rsquo;s actions in regard to biofuel are particularly notable. The company is currently field testing its hybrid buses with B100. &ldquo;The evaluation is not finished yet, but the expectation is that we will find that B100 is okay from a technical standpoint, but that you will need to take some service measures,&rdquo; Jobson says.
 When it comes to biodiesel, Volvo is only testing B100 in its diesel hybrid bus systems, no blends. &ldquo;Either you have it or you don&rsquo;t,&rdquo; Jobson says. &ldquo;If you allow biodiesel, you should be able to run them on up to 100 percent.&rdquo;
 Volvo&rsquo;s field tests are expected to conclude in 2011. &ldquo;We don&rsquo;t know exactly when they will be finished, but we know that it will be finished [this] year,&rdquo; Jobson says. Some of the anticipated service measures that are expected to be required for biodiesel use include increased intervals for oil and fuel filter changes. &ldquo;You will also have to change&mdash;before you start with the B100&mdash;some seals and the fuel lines,&rdquo; he continues. Specifically, fuel lines made of an alloy that contains copper must be replaced with stainless steel.
 Although it is likely Volvo will approve the use of B100 in its hybrid buses, only time will tell if customers will be interested in taking the steps needed to implement the fuel. The use of biodiesel is largely politically driven at the moment, Jobson says, noting that interest in biodiesel tends to rise and fall with political sentiment. &ldquo;I think there will be some local requests, but it&rsquo;s very early to guess what the demand will be on the market.&rdquo; Author: Erin Voegele Associate Editor, Biodiesel Magazine (701) 850-2551 <a href="mailto:evoegele@bbiinternational.com">evoegele@bbiinternational.com</a>

INCREASING EFFICIENCY:  Volvoâ€™s 7700 Hybrid bus increases fuel efficiently by up to 35 percent in town, and up to 30 percent on the highway.

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How biodiesel makes a good thing—diesel-electric hybrid technology—even better

Diesel Hybrid Market Fires Up

Some people say the greatest benefit of biodiesel use has to do with independence, or greenhouse gas reductions, or even as an alternative option for an economy that needs all the energy it can get. Simon Hauger, a former math and physics teacher turned biodiesel-hybrid vehicle developer, holds a different opinion of biodiesel&rsquo;s greatest benefit, however, and he has the students of West Philadelphia High School&rsquo;s EVX team to thank.
 More than 10 years ago, Hauger began searching for a way to positively engage the inner-city kids he saw struggling to graduate, let alone make it into college. The answer he found was fueled by biodiesel. &ldquo;When you think of all the negative stereotypes,&rdquo; Hauger says of the West Philly community, &ldquo;unfortunately, a lot of them are true. The inner-city high schools are pretty tough.&rdquo; But, by combining the fuel qualities of biodiesel with a hybrid electric motor system, Hauger found a way to create a sustainable after-school program that eventually flipped the graduation rate for those participating completely on its head. Compared with those attending West Philadelphia who aren&rsquo;t EVX members, 70 percent of whom will not attend a post secondary institution, 80 to 90 percent of all EVX team members not only graduate, but attend post secondary schools all across the country.
 This is more than just another feel-good story about a caring, hardworking teacher and a successful after-school program that just happens to include biodiesel, however. Look at the publicity the student team has already received from the Discovery Channel, the Today Show, and President Obama himself, to see the importance of this school and these kids. Simon, who grew up in West Philly, shows that to measure the benefits and impact of biodiesel, there&rsquo;s more to it than any life-cycle assessment or greenhouse gas (GHG) reduction level test could ever account for.
 From Go-kart to Supercar 
 The EVX team hasn&rsquo;t always produced biodiesel hybrid vehicles. The story starts in the shop of the Automotive Academy at West Philadelphia High School (think of it as the vocational wing of the school), with a go-kart that just happened to be lying around. After converting the go-kart to run on electricity with the help of Simon and other instructors, the students started showing interest. &ldquo;We were looking for ways to really engage the kids and help them develop their skills,&rdquo; Hauger says. &ldquo;There was no master plan, it just kind of happened.&rdquo;
 After recognizing the potential of the program and the reaction from his students, Hauger began a fundraising campaign, raising money, expertise and the necessary components to build electric vehicles&mdash;and he was successful. The team competed in a national competition, the Tour de Sol, which was based on low emission levels in conjunction with high fuel efficiency, and won it with an electric car built in the school&rsquo;s shop. The principal and other teachers thought the team was getting in way over its head, Hauger says, but that didn&rsquo;t stop him from continuing the program and researching national competitions for the team to compete in. The element of competition drove the students to improve in the classroom as well. If any of the students on the team received any D&rsquo;s or F&rsquo;s, had an absentee rate of 20 percent or higher, or were suspended from school, they were &ldquo;benched&rdquo; until they improved, Hauger says.
 &ldquo;In 2001, we were competing against a modified biodiesel vehicle in the Tour de Sol,&rdquo; he says. &ldquo;That was our first experience with biodiesel.&rdquo; Following that experience, the team, made up of students ranging from freshman to seniors, became enamored with biodiesel. The team took a Jeep and turned it into a biodiesel hybrid, using a Yanmar two-cylinder industrial lawn mower engine fueled by biodiesel to generate electricity for the vehicle. &ldquo;We basically had a lawnmower-type throttle, and when we saw the battery power dropping we just kind of throttled it up.&rdquo;
 After learning more about the properties of biodiesel, and even making their own from waste vegetable oil for a while, the team realized, as Simon notes, &ldquo;There is no downside to it.&rdquo; It&rsquo;s better for the engine, the lubrication and cleaning properties make it better for the car and better for the air, he adds. The new knowledge of biodiesel, combined with the experience at the 2001 Tour de Sol, added to the team&rsquo;s desire to build hybrid vehicles and helped transform once-struggling teens into young innovators capable of competing at a national level, teens who would eventually win hybrid vehicle contests four separate times. And their accomplishments weren&rsquo;t achieved solely because of Hauger's enthusiasm. &ldquo;If you hang out with us,&rdquo; he says, &ldquo;there is a lot of dialogue. It isn&rsquo;t like adults are just driving the decision making.&rdquo;
 In 2007, the team put all its work to the test, and made the leap from participating in low-prize competitions like the Tour de Sol, which netted only a few thousand dollars for a win, to a $10 million dollar first-place prize competition known as the Progressive Insurance Automotive X Prize, a global competition calling for vehicles that were affordable, safe, desirable and achieved at least 100 miles per gallon.
 &nbsp;&nbsp;&nbsp; Quest for the X Prize
 The team relished Hauger's challenge to compete nationally. Using the sleek design offered by the Factory Five GTM sports car, the team converted a powerful electric engine to run, in part, on biodiesel. Hauger says the team could not afford the expensive batteries required to run the electric engine so they incorporated a Volkswagen TDI engine, the ALH, to help. The whole idea, he says, was that &ldquo;if you are driving around the city, you run on just the electric motor. But if you want to turn it up a little, you can turn on the diesel engine to get added power.&rdquo; In the GTM, the TDI engine ran the rear wheels and the electric motor ran the front wheels.
 The work by the team garnered national attention, drawing exposure from the Today Show and the Discovery Channel, and the attention continued to grow as the team made it further and further in the X Prize.
 The competition began with each of the 111 teams having to present a business plan that showed its entry could be viably produced to the tune of 10,000 vehicles per year. Hauger enlisted help from Drexel University to create a full business plan for the EVX team. Out of all the teams, which represented 11 different countries and ranged from start-ups to multinational conglomerates, the West Philly crew was the only high school-based team to participate, and one of only 48 teams that made it through the business plan round. After the first on-track event, it then made it to the round of 22 teams, before its journey ended due to charging issues. &ldquo;In hindsight,&rdquo; Hauger says, &ldquo;we overlooked our charging scenario and ended up wasting a lot of electricity when we were charging our cars, so we didn&rsquo;t make the cuts for the finals.&rdquo; The team, however, impressed the competitors enough that the winners actually decided to partner with EVX for their next project.
 &ldquo;It&rsquo;s not a secret formula, having a hybrid vehicle,&rdquo; Hauger says. &ldquo;I think the thing that makes the program work is getting something good to do, building a project that is real.&rdquo; Ann Cohen, the team&rsquo;s manager, couldn&rsquo;t agree more. After years working for the automotive mechanics Union in Philadelphia, Cohen joined the EVX team and started fundraising. While she pins her excitement and interest in the team on the ability of the students to continually beat &ldquo;the big boys,&rdquo; she points to the program&rsquo;s impact on energy and breaking America&rsquo;s addiction to foreign oil as its greatest assest.&ldquo;The most important thing to me,&rdquo; she says, &ldquo;is giving an incredible variety and wealth of opportunities to have a voice in one of the most critical issues in the country. I don&rsquo;t think it can be any more important than that.&rdquo;
 That voice Cohen refers too, seen through the commitment by Hauger and his team to continue churning out sleek, sexy, hybrid vehicles of the future, has been heard by President Obama as well. In a speech based on the EVX team after it was officially eliminated from the X Prize, the president spoke about the importance of the team&rsquo;s work. &ldquo;What they had was a program that challenged them (the students) to solve problems and work together. To learn and build and create, and that&rsquo;s the kind of spirit and ingenuity that we have to foster. That is the potential that we can harness all across America,&rdquo; he said.
 To say that for more than 10 years Hauger&rsquo;s EVX team members have reached that potential, evidenced by the team&rsquo;s improved graduation and post-secondary institutional acceptance rates, might be an understatement. &ldquo;To say it out loud,&rdquo; Hauger says of the team&rsquo;s success, &ldquo;sounds kind of ridiculous&mdash;that an inner-city high school on a shoestring budget could develop a really compelling hybrid sports car. But we did.&rdquo; Those cars are cool, Cohen says, &ldquo;but the kids are cooler.&rdquo;
 Without a B20 blend of biodiesel it might be hard to envision the EVX team&rsquo;s success turning out in a similar way, and arguing that the greatest benefit created by biodiesel has more to do with a new hope for a bunch of students from West Philadelphia than GHG reductions or energy independence, might be going too far&mdash;or maybe not. Of the team&rsquo;s accomplishments, Obama said, &ldquo;These are actually the kinds of things that 10 years from now, 20 years from now, we are going to look back and say this is something that made a difference.&rdquo; &nbsp;&nbsp;&nbsp; Author: Luke Geiver Associate Editor, Biodiesel Magazine (701) 738-4944 <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a>

GROWING UP: Each year the EVX team consists of roughly 10 to 15 high school students, and each year several of the former team members return to check in on the new members.

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CAUGHT UP:  Simon and Jerry DiLossi, a member of the teamâ€™s auto faculty, work in conjunction with the students to create the optimal biodiesel hybrid vehicles. 

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ON FIRE:  Hauger says the kids wanted a capable car that looked hot on the street. They choose the K1 Attack. 

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How the EVX Hybrid team from West Philly High School does biodiesel 

The Greatest Benefit

In today&rsquo;s heavily regulated fuels environment, where fuels are subject to high quality standards, adverse impacts on the supply chain or on vehicle operability are not expected. But reports of blocked fuel dispensers and vehicle filters during biodiesel use have forced the industry to seek a solution as a matter of urgency. Petroleum additive companies such as Infineum are working to understand this complex issue, examining the role of additives in the elimination of these operability limitations.
 The need to improve energy supply security, reduce greenhouse gas emissions and enhance air quality is accelerating the pace at which alternative fuels are being incorporated into automotive fuels. Fatty acid methyl ester (FAME) biodiesel has been used as a diesel fuel for more than 10 years. Now, in order to help meet legislated renewable volume targets, the use of biodiesel is increasing. However, the qualities and properties of the oils and fats used to make FAME vary significantly and ultimately affect the resulting fuel.
 Vehicle and supply chain operability issues concerning the use of blends of diesel and biodiesel have been reported in recent years. These issues can be expensive for fuel suppliers to rectify, both in terms of actual cost and brand image. Reported field incidents involve the blocking of fuel dispensers and vehicle filters by materials that have precipitated out of biodiesel blends above the cloud point. Unfortunately, the way in which this occurs varies depending on the diesel and the type of biofuel used, the level of impurities and contaminants present in the fuel, the supply chain management and the climate, making the phenomenon difficult to study, hard to measure and tough to resolve.&nbsp;
 A number of factors can contribute to poor filterability and operability, including water contamination, bacteria and fungi growth, presence of proteins, wax formation and settling, poor oxidation stability, and impurities such as monoglycerides and sterol glucosides. By examining a few of the main contributors, a much better understanding of the phenomenon can be gained.
 Understanding the Causes
 One of the biggest issues for FAME is its tendency to form wax crystals at low temperatures because of the degree of saturated fatty acids in the feedstock used to make the biodiesel. This wax can block vehicle filters and settle in storage and vehicle fuel tanks. As more highly saturated feedstocks are introduced, biodiesel and its blends with diesel are more likely to exhibit cold weather operability issues because of the additional saturated esters increases the total wax level in the fuels. Field issues observed in buses indicate that problems tend to occur on start-up in the morning in vehicles that have been refuelled the previous evening, suggesting that the wax had settled out in the fuel tank overnight. Unfortunately, the obvious solution on refuelling in the morning is not always practical as fleets often need to move off quickly at the start of the day. Appropriate additive solutions could help to provide consistent FAME product quality throughout the distribution system and ensure vehicle operability.
 Microbiological issues can significantly affect pumping rates at service stations, increasing filling times and keeping vehicles off the roads for longer periods. Simple housekeeping measures, such as ensuring the tank levels do not fall too low and avoiding filling immediately after fuel delivery, can help to prevent the microbial material from being stirred up and drawn through the system. Treatment of bacteria or fungi with biocides can provide a remedial solution, as long as the tank is cleaned afterwards. Otherwise, as every subsequent delivery of fuel is treated, the dead bacteria build up in the tank, which can cause further filterability issues.
 An issue that can arise when FAME is used as fuel in its neat form, B100, or in blends with diesel, is its tendency to oxidize during storage, transport and distribution. The oxidation products can lead to sediment formation, filter blocking, injector nozzle coking, and corrosion. The presence of metals, such as copper and iron, and impurities such as glycerol and free fatty acids, can make the situation even worse. Specifications have now been introduced around the world to set stability requirements in order to control FAME quality.
 A wide range of impurities can also cause filtration issues in biodiesel. Monoglycerides, sterol glucosides, glycerin and soaps, which can be present in biodiesel, are undesirable in the resulting biodiesel blend with diesel. Upon cooling, the solubility of these impurities decreases, which means they can come out of solution as discreet crystalline particles. These particles can then go on to interact with other impurities and moisture, eventually forming structures that can interfere with the flow and filtration of the biodiesel blend above the cloud point.
 Dispenser filter plugging issues at retail sites have been observed with B5 fuels at temperatures of around 5 degrees Fahrenheit (minus 15 degrees Celsius). These events were probably caused by polar compounds such as monoglycerides and other biodiesel contaminants, which have poor solubility in the fuel as it cools. The range of potential contaminants that could contribute to the formation of these precipitates, however, has yet to be fully defined and confirmed through testing.
 Specifications and Tests
 The ASTM D6751 specification covers biodiesel fuel blend stock, B100, in grades S15 and S500 for use as a blend component with middle distillate fuels. The standard sets limits for parameters including water, sediment, kinematic viscosity, sulphated ash, oxidation stability, sulphur, cetane number, cloud point, and total and free glycerin, among others. The Cold Soak Filtration Test, developed in response to low temperature vehicle filter blocking issues experienced in Minnesota, was added to the specification in 2008 to determine the suitability of B100 for biodiesel blends.
 In Canada, the Canadian General Standards Board is working closely with the industry to develop two national standards to help ensure the quality of biofuels in its harsh climate: CGSB 3.520 for B1 to B5, and CGSB 3.522 for B6 to B20. They have also been looking at a more severe Cold Soak Filter Blocking Test.
 Some additives that eliminate the visible cloud or haze that can form in biodiesel blends above the cloud point can still give poor filterability as demonstrated in the CSFT. This is because the small particles that block the 0.7 to 1.6 micron (&mu;m) filters used in the test are not necessarily visible to the naked eye. These very small particles are a real concern to the industry because vehicle and dispenser filters are becoming less and less porous as the requirements for injector nozzles increase in severity.
 Industry bodies have also been looking at introducing limits on certain impurities, with ASTM D6751 for example, limiting total glycerine in B100 to 0.24 percent. It is possible, however, that some B100 fuels that meet current limits may not be fit for purpose. To address this issue, ASTM formed the Filter Clogging Working Group, and its approach has been to propose limits on the amount of saturated monoglycerides. Setting limits on individual impurities in B100 will not guarantee that distribution systems and vehicles will be adequately protected, however, since, as already mentioned, filterability issues are not the result of one specific type of molecule. The development and introduction of a performance test would far better serve the industry and vehicle owners.
 Collaboration is Essential
 These many and varied issues will require careful consideration, and the industry has been very busy gathering data. Because so many factors can have an impact on the behavior of biodiesel blends in the field, Infineum has been actively working with diesel and biodiesel producers, fuel retailers, original equipment manufacturers and other industry players to gain a real insight into causes of these filterability and operability issues. This collaboration has resulted in the development of a test to assess the required level of filterability performance required to avoid field issues. By employing these new performance tests, Infineum has been able to develop robust, harms-free additive solutions to counter filterability issues. These advanced additives can enhance the quality of biodiesel blended fuels, helping suppliers to increase market share and improve margins.
 A new video from Infineum is available, which highlights the problems associated with cold weather operation and the advantages of using cold flow additives. To view the video, visit http://www.infineum.com/Pages/ColdFlow.aspx. Author: John Chandler Sr. Fuel Additive Technologist, Infineum USA LP (800) 654-1233

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Visual Improvement Does Not Guarantee Performance

2011/01/12948515808708.jpg

Understanding and preventing biodiesel-related filter blocking issues 

Flowability: A Complex Issue

Ohio-based Jatrodiesel Inc. has launched its next-generation technology for biodiesel production. Trademarked Jatro Super, the biodiesel refining technique utilizes proprietary and patent-pending Solid Catalyst Process technology that has been under development for more than two years, and is lab- and pilot-tested at Jatrodiesel&rsquo;s facilities in Dayton, Ohio.
 The traditional biodiesel production process involves esterification for processing free fatty acids (FFA) into esters; and transesterification for processing low-FFA oils into biodiesel. The conventional process involves using sulfuric acid for esterification and sodium or potassium methylate catalysts for the transesterification process. These processes work very well and have decades of production experience behind them. Jatrodiesel has used these processes in six turnkey biodiesel plants it has built through the years. Virtually all functioning biodiesel plants in the U.S. use a form of these two technologies with similar, or exactly the same, catalysts.
 The drawbacks of these traditional processing methods are formation of soaps and loss of yield, both due to high FFA processing (the higher the FFA, the greater the soap formation and yield losses); usage of fairly expensive catalyst; and, since multiple processes that are contaminant-sensitive require sundry pieces of equipment, high capital costs. Apart from these, another major drawback of the traditional process is the amount of training required for a new operator with no prior background to familiarize themselves enough to proficiently and safely run plant operations independently. To address the above issues, Jatrodiesel developed a next-generation technology for biodiesel production trademarked Jatro Super, or SCP technology.
 The new biodiesel technology is a single-stage process that eliminates esterification and transesterification, and puts no limit on feedstock FFA levels. The process requires an extremely small footprint and very low capital expenses compared to conventional methods. In addition, Jatro Super completely eliminates the need for traditional homogenous catalysts. In short, it cuts the cost of traditional biodiesel refining by a third. And, it requires little time for operators with no background in biodiesel processing to learn how to run the process.
 In the newly developed processing method, the feedstock is mixed with methanol and is introduced into the Super column, which employs a solid metal catalyst in a supercritical environment. The temperature and pressure is maintained in such as way in the process that the feedstock completely converts to biodiesel in a few minutes, with minimal or no loss in yield. Also, the water content of the feedstock has no effect on the process.
 The mixture coming from the Super column is then sent through a separation process to isolate biodiesel from glycerin, and the excess methanol is recovered. The biodiesel is then either washed with water or through a waterless approach with magnesium silicate, to get rid of any excess glycerin. The biodiesel coming out of this process meets ASTM D6751 specifications, and it can then be distilled to further clarify the properties.
 The metal catalyst employed in the Super column should be switched out once a year at a minimal cost, which comes out to about one and a half cents per gallon of plant capacity per annum.
 The advantages of the new process include:
 &bull; Lower production costs.
 &bull; No perceivable yield loss.
 &bull; No more ongoing catalyst consumption.
 &bull; No acid number issues for higher FFA feedstock.
 &bull; Higher glycerin purity due to no bleeding of homogenous catalyst.
 &bull; A number of processes are cut in half, thereby minimizing downtime and training required by operators.
 &bull; The area required for the process is cut by 60 percent.
 &bull; Low capital expenses.
 For a typical 10 MMgy plant, the production cost using the Jatro Super process is 30 cents a gallon. That includes the cost of chemicals, energy, maintenance and payroll. For a comparable traditional plant, the cost is 45 to 48 cents a gallon. Coupled with lower production costs is the capability to process higher FFA feedstocks, up to 15 percent, and elimination of yield losses of 2 to 5 percent found in traditional processing methods. Author: Rahul Bobbili Vice President of Technology, JatroDiesel Inc. (937) 847-8050 ext. 203 <a href="mailto:rbobbili@jatrodiesel.com">rbobbili@jatrodiesel.com</a>

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CRYSTAL CLEAR: The Jatro Super column uses a solid metal catalyst in a supercritical environment to produce on-spec fuel from low-quality feedstock. 

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How Jatro Super, a new biodiesel process from Jatrodiesel, addresses shortfalls of conventional methyl ester refining 

February 2011

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Business Briefs

Business Briefs

Columns

It's Back

Annual Legal Checkup

Satisfying the End User

Featured

Clean Diesel Developments

Diesel Hybrid Market Fires Up

The Greatest Benefit

Contributions

Flowability: A Complex Issue

New Process Uses SCP Technology

February 2011