California will be the biodiesel market to watch in 2016 as the state implements a diverse portfolio of policies that will directly impact the industry. The state&rsquo;s landmark greenhouse gas (GHG) reduction program, AB 32, is celebrating its 10-year anniversary and ramping up quickly. According to the 2015 State Agency GHG Report Card, California GHG policies reduced more than 37 million metric tons of GHG emissions in 2013, and the state intends to quadruple that rate of GHG reduction by 2020. California is outpacing the U.S. average on both job creation and economic growth and showing no political hesitancy in combatting climate change. The low carbon fuel standard (LCFS) is California&rsquo;s flagship GHG reduction program in the fuels sector and is delivering 10 percent of the state&rsquo;s GHG reductions, despite being hindered by litigation. In 2015, California&rsquo;s Air Resources Board readopted the LCFS program to satisfy procedural requirements while simultaneously enhancing the program and refusing to delay the GHG reduction timetable. Based on credit generation, California&rsquo;s transportation sector reduced its carbon intensity 2 percent between 2010 and 2015, and will reduce it 8 percent more between 2016-&rsquo;20. The market has responded accordingly with credit prices moving from $28 per ton in June to triple digits by December. Robust credit values have incentivized biodiesel production particularly from corn oil, tallow and used cooking oil, and also attracted 115 million gallons of renewable diesel into California&rsquo;s market in 2014. In addition, highly effective participation in the readoption process by the National Biodiesel Board, California Biodiesel Association and individual producers convinced ARB to reduce by more than half the indirect land use change (ILUC) attributable to soy. This change will roughly triple the rate of LCFS credit generation from virgin soy biodiesel compared to the prior LCFS regulation. California&rsquo;s cap-and-trade program will generate approximately $2.5 billion in revenue for the state&rsquo;s GHG Reduction Fund (GGRF) in fiscal year 2015-&rsquo;16. As a GHG-reducing clean fuel technology, current and future California biodiesel producers are potentially eligible to receive a portion of the GGRF budget. In its Second Triennial Plan, ARB recommended that in-state production of low carbon fuels receive funding from the GGRF. The CBA and Low Carbon Fuels Coalition are actively engaged in the political process to secure long-term funding for the industry. The outcome of the GGRF budget process in California could set a precedent for other states that establish cap-and-trade programs pursuant to EPA&rsquo;s Clean Power Plan. With the support of the NBB, CBA and LCFC, Assemblymember Bill Quirk successfully guided AB 692 to passage this year. AB 692 establishes mandatory procurement of low carbon fuels for the overall state fleet with a 3 percent requirement applicable for 2017, ratcheting up 1 percent annually to 10 percent in 2024. Very low carbon diesel fuels must not exceed 40 percent of the carbon intensity of CARB diesel&mdash;a standard that can be met by biodiesel produced from low carbon feedstocks. While AB 692 only imposes reporting requirements in 2016, state fleets are already issuing solicitations for very low carbon fuels. Such an approach is consistent with a central pillar of Gov. Brown&rsquo;s GHG reduction strategy: 50 percent reduction of petroleum use in vehicles by 2030. While these programs appear likely to create opportunities for biodiesel, California&rsquo;s Alternative Diesel Fuel regulation presents more of a challenge. The ADF regulation has been under development for many years and its implementation was made mandatory by the LCFS lawsuit. The ADF regulation establishes a fuel approval process in California. During the rulemaking, ARB analyzed the emissions performance of biodiesel blends and found a small increase in nitrogen oxide (NOx) emissions. As a result, ARB imposed limitations on biodiesel blends that vary from B5 to B10 depending on the season and cetane number. The NBB, CBA and individual biodiesel producers were highly engaged in the ADF rulemaking and convinced ARB to delay implementation of the blending limits until Jan. 1, 2018, and to include a sunset provision based on the market penetration of new technology diesel engines. In addition, ARB established provisions to authorize the use of the NOx-reducing additive DTBP, and to enable biodiesel producers to certify their fuels as NOx-neutral relative to CARB diesel.&nbsp; Finally, the biodiesel industry convinced the California Legislature to solve a bothersome tax problem with the passage of AB 1032. The provision authorizes a refund for tax paid on the biodiesel fuel portion of dyed blended biodiesel fuel removed at rack if the supplier can show that tax on this biodiesel has been paid by the same supplier. Author: Graham Noyes Attorney, Keyes, Fox &amp; Wiedman LLP 916-668-4636 <a href="mailto:gnoyes@kfwlaw.com" target="_blank">gnoyes@kfwlaw.com</a>

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According to the 2015 State Agency Greenhouse Gas Report Card, California GHG policies reduced more than 37 million metric tons of GHG emissions in 2013, and the state intends to quadruple that rate of reduction by 2020.

California Launches New Fuel Policies in 2016

What a year it&rsquo;s been. If I&rsquo;d been asked at the end of first quarter 2015, what the end of the year would bring for the U.S. biodiesel industry, my optimistic attitude would have compelled me to say, &ldquo;Better things,&rdquo; but my countenance might have telegraphed a different story. Overall, the downed U.S. biodiesel market impeded investment and stymied growth. This environment was precipitated by a confluence of factors, such as low diesel prices, and in many cases, negative margins, a prolonged delay in the RFS targets for 2014-&rsquo;15&mdash;the rule for 2014 that should have been finalized by Nov. 1, 2012, was not published until Nov. 30, 2015&mdash;no tax credit for the fourth time in six years, and seriously depressed RIN values. For more information on 2015&rsquo;s market activities and what 2016 may hold, be sure to read &ldquo;Poised for the Best Year Yet&rdquo; on page 18, written by associate editor Katie Fletcher. While the U.S. biodiesel sector suffered as a whole in 2015, this didn&rsquo;t stop many domestic companies from making progress in developing new projects, as evidenced in the page-12 story, &ldquo;Standing On Its Own 2 Feet,&rdquo; by associate editor Anna Simet. This is a genuinely positive story of the perseverance and ingenuity exhibited by those in this business, whose efforts shine like the sun against a backdrop of stormy regulatory and market environments. On page 28, in the article, &ldquo;Biodiesel Opportunities Abroad,&rdquo; I feature four U.S. companies that are focusing on expanding their businesses overseas for a variety of reasons&mdash;whether they are fed up with federal policy inconsistency, state and local regulatory constraints, or are taking advantage of hungry international biodiesel markets. With the serious issues our domestic industry has faced in recent years, it&rsquo;s no wonder companies are seeking this avenue. Given the U.S. EPA&rsquo;s more robust biomass-based diesel volumes in the final RFS rule for 2014-&rsquo;17, however, it will be interesting to see whether some of these companies refocus their efforts on domestic projects. Other influencing factors may include the EPA&rsquo;s commitments to get the program time line back on track and continue raising biodiesel volumes, and the reinstated blender tax credit retroactively in effect from Jan. 1, 2015, through Dec. 31, 2016. For more on the RFS final rule, program time line and tax credit, check out &ldquo;Back On Solid Ground,&rdquo; on page 24. The events that unfolded late in 2015&mdash;EPA&rsquo;s release of a strong RFS rule and reinstatement of the tax credit&mdash;are setting the stage for performance of an about-face in 2016, which, by all accounts, could be the greatest year the U.S. biodiesel industry has ever experienced. I&rsquo;m placing my bets on it.
Author: Ron Kotrba Editor, Biodiesel Magazine 218-745-8347 <a href="mailto:rkotrba@bbiinternational.com" target="_blank">rkotrba@bbiinternational.com</a>

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ABOUT-FACE

Climate change. We read about it more frequently and definitely it is not a new topic for any of us. The difference between now and the moment when we first heard about climate change is how we experience this phenomenon. We felt as though climate change would never threaten us; that it was just a distant and unlikely problem. Unfortunately, it has become not simply a local challenge, but has evolved into a larger global threat. Different and yet equally serious symptoms of climate change are making their presence felt: rising temperatures, weather disasters in the form of droughts, heat waves, wildfires, storms and hurricanes. In addition, included are heat stress and air pollution, which are serious public health threats. The key question is, what is the cause of climate change? Research institutes and environmental agencies agree without any doubt on one single answer: carbon pollution. Carbon dioxide (CO2) accounts for 82 percent of global emissions, wherein, specifically, transportation emissions are responsible for 28 percent of greenhouse gas emissions. It has become clear that reducing man-made emissions is a high-priority solution to that problem. There exist numerous possible ways to reduce man-made emissions. For example, reducing carbon pollution from power plants, expanding and modernizing the electric grid, adopting new technologies and establishing fuel economy standards. Another strong and solid measure adopted in the U.S. that complements this perfectly is the renewable fuel standard (RFS) program: renewable fuels percentage standards for cellulosic biofuel, biomass-based diesel, advanced biofuel and total renewable fuel. The program applies to all motor vehicle gasoline and diesel produced or imported in the U.S. RFS provides a clear path toward the growing development of renewable fuels and the extensive benefits brought to our society, environment and economy. The final rule for renewable volume obligations (RVOs) released by the U.S. EPA Nov. 30 for years 2014-&rsquo;16, in addition to the applicable volume of biomass-based diesel for 2017, confirms the hard work and dedication to biodiesel from active supporters who are committed to a sustainable future. Global Biodiesel Initiatives Other countries have successfully implemented similar initiatives where biodiesel has shown to be the cleanest and most efficient biofuel to reduce greenhouse gas emissions. The European Union ruled the first-generation biofuels at 7 percent, with Germany and France as the prominent supporters of biofuels as a key solution to achieve ambitious CO2 emission goals. The high usage of diesel-powered passenger cars provides an impressive opportunity for biodiesel contribution. In South America, for example, the vast availability and diversity of feedstocks (soybean oil, palm oil, animal fat, and used cooking oil) combine perfectly with the strong dependence on imported diesel to drive renewable fuels programs. Brazil established the B7 (blend of 7 percent biodiesel to 93 percent fossil diesel) mandate in 2014, similar to the average blend in Colombia, while Argentina introduced B10. Other countries like Paraguay and Uruguay are also following, in a minor scale, the biodiesel trend. In Southeast Asia, the availability of low-cost feedstock (palm oil) and the strong dependence on imported fuels resulted in a wise implementation of mandates, ranging from B10 to B20 in countries such as Indonesia and Malaysia. Thailand&rsquo;s government applied a B7 mandate, while Philippines started working with a biodiesel blending of 5 percent. All local authorities and biodiesel producers have made distinct efforts to secure the sustainability of palm oil production, a mandatory element of renewable fuels. We can easily relate to the phrase &ldquo;think globally, act locally.&rdquo; Many countries on all continents are adopting individual plans to mitigate climate change, where renewable fuels&mdash;especially biodiesel&mdash;have been one of the most efficient and effective measures to reduce greenhouse gas emissions. We, at Evonik, have a vision of what our tomorrow will look like: a world with more environmentally friendly fuels. That is why we address this issue by timely identifying trends and being present in all major biodiesel-producing regions. Together, we strive for a sustainable future. Author: Carlos Araujo Marketing Manager-North America, Evonik Corp. 973-929-8181 <a href="mailto:carlos.araujo@evonik.com" target="_blank">carlos.araujo@evonik.com</a>

Evonikâ€™s largest sodium methylate production site, located in Marl, Germany, manufactures a necessary component for processing biodiesel, a fuel governments across the globe rely on to reduce carbon emissions. 

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Evonik Corp., with its headquarters in Essen, Germany, shown here, is a leading biodiesel catalyst supplier in the western and eastern hemispheres.

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Biodiesel is an impeccable combination of agriculture, science and social empowerment to combat climate change. 

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Biodiesel is a real solution to reducing carbon emissions and mitigating the threat of climate change the world over. Many countries are adopting plans to reduce greenhouse gases, and biodiesel is an effective part of those measures. 

Our Commitment to a Sustainable Future

A handful of U.S. biodiesel producers are developing projects overseas, whether it&rsquo;s to capitalize on emerging or growing international markets or to take refuge from the business-stifling inconsistency of U.S. policy. &ldquo;In the near future, our goal is to locate a production facility in Mexico, in one of the border states,&rdquo; says Todd Hill, founder of the now-defunct Promethean Biofuels biodiesel plant, formerly located in Temecula, California. Promethean&rsquo;s decline is a complicated story. It was in the midst of expanding when it was hit by a perfect storm, Hill says. &ldquo;The year prior, we had been negatively impacted by the bankruptcy of one of our customers, which left us with some operating and payroll issues,&rdquo; he says. &ldquo;We were profitable, so that issue would have worked itself out over time. The No. 1 issue was that being colocated next to another recycler we had twice the regulatory burden. Some of the facility changes required would have impacted our landlord adversely and as such, instead of making the changes, we lost our lease. It originally took two years to permit Promethean&rsquo;s facility, and we did not have cash reserves sufficient to relocate and permit a new facility. We briefly attempted to partner with a local tribal organization, but that ultimately did not pan out.&rdquo; Hill recently founded a new firm, Spaq Omni Acquisition Co., that he says is first and foremost a technology-licensing company. &ldquo;Our most exciting product development at this stage is our work in the field of dendrimers, most specifically methyl-ester activated macromolecules,&rdquo; he says. The molecules can aid various aspects of biodiesel production, such as purification or speeding up the ambient temperature of methyl ester production. &ldquo;Taxation, regulation, cost of production, market access, distribution, and feedstock procurement are all more advantageous outside of the U.S. at this time,&rdquo; Hill says. &ldquo;Coupled with a strong dollar, and what looks to be a protracted reduction in the price of crude, you have a set of externalities that all make foreign investment in biodiesel and specialty chemicals very promising for organizations that are not fully integrated feedstock-to-end-product operations. The current climate also promotes foreign operation for those entities looking to integrate or fortify access to feedstock and chemical components.&rdquo; Hill says U.S. federal policy has never truly been in alignment with biodiesel producer interests unless that producer also was able to directly supply their own feedstock. &ldquo;Whether from the historically unstable tax credit or the infamously fraud-prone renewable fuel standard (RFS), government policy and the constant state of flux of these relatively new initiatives have always been difficult and costly burdens for the small producer to bear,&rdquo; he says. Promethean&rsquo;s only directly negative impact from federal policy related to biofuels production, according to Hill, was the &ldquo;sometimes extraordinarily delayed payment of tax credits, in some cases delays in excess of 24 months without real recourse or meaningful interest rates.&rdquo; Hill adds that Promethean sought to build a business that was viable without subsidies. &ldquo;Mexico seems very attractive right now with the exception of the current regulatory climate with taxation and the maquiladora system,&rdquo; Hill says. &ldquo;Wage structure, a plethora of talent, overall facility cost structure, and a transportation infrastructure that is already well-adapted to moving products back and forth, year-round markets for residual byproducts, as well as our prior experience in operating in that region all make it a viable alternative to U.S. manufacturing.&rdquo;
Across the country, Indiantown, Florida-based Genuine Bio-Fuel Inc. has been trying to develop a project at an airport in Lincoln Park, New Jersey, for years, but the company has become frustrated with the permitting and regulatory process. &ldquo;We are approaching our fourth anniversary trying to get our permits,&rdquo; says Jeff Longo, executive vice president of Genuine Bio-Fuel. &ldquo;I do not even have enough time, energy or paper to describe that delay hold-up. Let&rsquo;s just say it is everything from the sign being too large proposed on the hangers we were to renovate, to the noise possibly coming from the plant. We are all aware of the loud sounds air pumps make and how they drown out the noise of aircraft landing and taking off,&rdquo; Longo quips. The company cannot expand its flagship plant in Indiantown, Florida, according to Longo, due to the local authorities&rsquo; regulatory crackdown after the nearby fire at Viesel Fuel&rsquo;s biodiesel facility. &ldquo;So much for expansion there,&rdquo; he says, despite a stellar safety record since 2008. In 2012, Genuine Bio-Fuel announced it was developing a 12 MMgy biodiesel project in Puerto Rico to serve Caribbean and South American markets. &ldquo;After a year and a half of getting all our permits&mdash;and the government there was very pro-job and green&mdash;our largest potential customer, the power company, had multiple indictments for fraud and is totally broke,&rdquo; Longo says. &ldquo;Oh well, that&rsquo;s just another 18 months and hundreds of thousands of dollars spent. But hey, what&rsquo;s a few dollars and time these days, especially when you have a government agency three years behind on the RFS and then makes the mandate a joke?&rdquo; Genuine Bio-Fuel has several proposed build-outs, according to Longo, in Latin America, Alaska, Africa and Europe, and several already completed or in the process. &ldquo;For example, mobile bio facilities that can use various feedstocks supplying generators to power parts of Africa and Alaska at a third of the price per kilowatt normally charged,&rdquo; he says. &ldquo;Our patent-pending technology not only allows us to use 60 percent less energy, but it affords us to be a true continuous flow plant utilizing about 50 percent of the normal catalyst, a wide variety of feedstock with little concern of free fatty acid (FFA) values and having companies purchase our glycerol coproduct due to the higher-quality glycerin in it.&rdquo; Longo says the company owns several operations outside the U.S. and grows its own feedstock in these locations. &ldquo;We have had nothing but enthusiastic participation from these governments, local and national, with set programs that have longevity to them,&rdquo; he says. &ldquo;Our partners overseas are enthusiastic about even further expansion there.&rdquo; Today much of Genuine Bio-Fuel&rsquo;s Florida production is shipped overseas. &ldquo;We make really high-quality biodiesel and ship the majority of it now off shore, negating the RIN market volatility and all,&rdquo; Longo says. &ldquo;Yes, we get higher pricing to offset this, however, we also save these countries money and they are going green.&rdquo; Longo asks, &ldquo;Why would anyone in the right business mind want to expand, much less have a facility in the states? Tax credits that come and go, RFS mandates are years behind schedule, competing for taxpayer support for foreign subsidized imports, and a country that professes it wants to go green&mdash;as long as it is cheaper than what we are paying for now.&rdquo; Longo says with the blender tax credit that was reinstated through 2016, this will help the industry out, but he adds that imports will now stream in way beyond what may be anticipated. &ldquo;Without the credit, they already have 40 percent of the market,&rdquo; he says. &ldquo;With the U.S. taxpayer increasing monies in their pocket, the imports will flood the market. A tax credit not going beyond 2016 will be absolutely no incentive for U.S. investment monies here. By the time build-outs are completed and EPA approval for RINs issued, there is no time for an ROI on the capitalization.&rdquo;
With its November 2015 purchase of the 15 MMgy Veros Energy plant in Alabama and its 50 MMgy facility in Pennsylvania, Hero BX is on the move domestically&mdash;but the company is not putting all its biodiesel eggs in the U.S. market. Hero BX is in the early stages of developing a project in Jamaica. Consultants representing the firm have visited the island since a 2015 Jamaica Investment Forum and have been meeting with various government and private sector stakeholders with serious interest in confirming the project. Chris Peterson, vice president of finance and commodity risk at Hero BX, says his firm is undertaking a very in-depth due diligence process in Jamaica. &ldquo;A little over a year ago, our owner asked about interest in a potential Caribbean investment in biodiesel production,&rdquo; he says. &ldquo;Our due diligence started with a feasibility study that came back not very positive, so his instruction to the team was to figure this out. We looked at all the negatives and drawbacks to see if there were workarounds. It&rsquo;s an island community with limited resources, electricity and chemicals. There&rsquo;s no existing supply chains for feedstock, and they don&rsquo;t have population centers we have in U.S. So there are struggles and challenges with the business model in Jamaica, and we spent the past year trying to iron it out.&rdquo; Peterson says, however, with assistance from JamPro, an agency of Jamaica&rsquo;s Ministry of Industry, Investment and Commerce that promotes business opportunities in export and investment to the local and international private sector, and certain laws, regulations and policies in the Caribbean favorable to trade, interesting opportunities for distribution exist, &ldquo;if we can get the cost side of equation in check.&rdquo; Hero BX intends to leverage used cooking oil in Jamaica, but not exclusively. &ldquo;There is land available for cultivation, so we&rsquo;re looking at feedstock development and the feedstock production side of the business as well,&rdquo; Peterson says. If the company builds a plant in Jamaica, Peterson says exporting fuel would play a role depending on plant size. Domestically, the company&rsquo;s biodiesel would largely go toward electricity generation. Ultimately, Peterson says Hero BX is being cautious since the company is conservative in its investments. &ldquo;We&rsquo;ve been in the due diligence process for a year now, and it&rsquo;s coming to a milestone where we have to make a decision to go forward or not&mdash;we expect that to happen by end of 2015 or early into Q1 2016,&rdquo; he says. &ldquo;The consulting team is looking at the data, so they will make a presentation to the owner and see if we should continue or move on.&rdquo;
In Miami, Lagosur Corp. made a name for itself mid-2015 when the company announced it would develop a business on exporting biodiesel and processing capabilities to Latin America. Months later, in December, the firm announced a collaboration with Alianza Pacifco to sell biodiesel to the mining and transportation industries in Chili, Peru and Mexico. Jorge Abukhalil, Lagosur&rsquo;s executive vice president of business development for Latin America, says the company was formed in 2014 with the specific objective and focus of bringing biofuels to Latin America. &ldquo;Lagosur has two core offerings to targeted countries in Latin America,&rdquo; he says. &ldquo;That&rsquo;s introduction and importation of biodiesel and deployment of biodiesel plants for local production.&rdquo; Lagosur is sourcing biodiesel from a variety of producers in the U.S. and overseas. &ldquo;We are continuously evaluating the best sources of high-quality biodiesel,&rdquo; Abukhalil says, adding Lagosur will not publicize its specific sources. While Chile, Peru and Mexico are the company&rsquo;s initial markets, Abukhalil says the company is by no means limited to those countries. &ldquo;We selected those markets based on market need, potential positive impact and strong relationships,&rdquo; he says. &ldquo;We are making preparations for other markets in Latin America, inclusive of Bolivia.&rdquo; Lagosur has plans to deploy biodiesel production facilities in Latin America. &ldquo;We will be announcing details associated with those facilities in the coming months,&rdquo; Abukhalil says, adding that the company has a number of technology partners, the details of which are currently confidential. &ldquo;Lagosur will play several key roles to deploy local biodiesel plants, including general contractor and plant builder, co-tech developer, licensee and operator,&rdquo; he says. Lagosur hopes to capitalize and leverage the U.S. market&rsquo;s history and experience to help accelerate Latin America&rsquo;s technology adoption. &ldquo;The Latin American markets have all the opportunities and motivations that the U.S. has and, in many cases, even more reasons to incorporate biofuels into their respective energy supply,&rdquo; Abukhalil says. &ldquo;The reality is, most Latin American countries do not have the experience and history with biofuels as an alternative source of energy, and that is where Lagosur comes into the picture.&rdquo; Author: Ron Kotrba Editor, Biodiesel Magazine 218-745-8347 <a href="mailto:rkotrba@bbiinternational.com" target="_blank">rkotrba@bbiinternational.com</a>

With expansion at its Indiantown, Florida, facility (shown) unlikely due to regulatory constraints, and with its plant construction halted in New Jersey, Genuine Bio-Fuel is banking on international developments to fuel its growth. 

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Several U.S. producers, including Genuine Bio-Fuel, Hero BX and the now-defunct Promethean Biofuels, in addition to Miami-based biodiesel exporter and hopeful technology provider Lagosur, sketch out overviews of international developments. 

Biodiesel Opportunities Abroad

After two years in limbo without renewable volume obligations (RVOs) under the federal renewable fuel standard (RFS) for 2014-&rsquo;15&mdash;not to mention uncertainty regarding future years&mdash;the U.S. biodiesel industry had once again found itself in a state of precariousness following the strong growth year of 2013. The pattern of good years followed by bad years is, unfortunately, something the sector has come to expect with seriously delayed RFS targets and the on-again, off-again nature of the $1-per-gallon blender tax credit over the years. But events in late 2015 show signs that this pattern may finally be broken, or, at minimum, the U.S. sector is heading into a period of stability. On Nov. 30, the U.S. EPA released its final 2014-&rsquo;17 RVOs for biomass-based diesel and its final 2014-&rsquo;16 RVOs for the overall advanced biofuel category, and both were higher than the proposal released in May. Moreover, the agency vows to get the program back on track while indicating it plans to continue increasing biomass-based diesel RVOs in years to come. The final RVOs for biomass-based diesel are 1.63 billion gallons for 2014, 1.73 billion gallons for 2015, 1.9 billion gallons for 2016, and 2 billion gallons for 2017. The proposal issued last spring called for 1.63 billion gallons of biomass-based diesel for 2014, 1.7 billion gallons for 2015, 1.8 billion gallons for 2016 and 1.9 billion gallons for 2017. The advanced biofuel bucket, another important category for biodiesel producers, also increased slightly for 2015 and 2016 years compared to the proposal. The final rule for advanced biofuels issued Nov. 30 requires 2.67 billion ethanol-equivalent gallons for 2014, 2.88 billion gallons for 2015 and 3.61 billion gallons for 2016. The proposal for advanced biofuels issued last spring called for 2.68 billion ethanol-equivalent gallons for 2014, 2.9 billion gallons for 2015 and 3.4 billion for 2016.&nbsp; The National Biodiesel Board&rsquo;s CEO Joe Jobe and his organization applaud the Obama administration for boosting the volumes from the proposal and recommitting to biodiesel. &ldquo;It is a good rule,&rdquo; Jobe says. &ldquo;It may not be all we had hoped for but it will go a long way toward getting the U.S. biodiesel industry growing again. We have seen three years of damaging delays, but the administration took a strong step forward that should put biodiesel and the RFS on a more stable course in the years to come.&rdquo; Jobe says NBB will continue working with the administration toward stronger standards, and notes that the advanced biofuel standards &ldquo;could and should have been higher,&rdquo; he says. &ldquo;The production capacity is there, and we have surplus fats and oils that can be put to good use.&rdquo; The Iowa Biodiesel Board indicates that while the final RFS rule is better than the proposal, it is not perfect. &ldquo;While we are thankful for the improved numbers from EPA and the White House, they still fall a little short of what the industry had asked for and what the industry is capable of,&rdquo; says Grant Kimberley, executive director of the IBB. &ldquo;This is especially true in light of the imports of subsidized foreign-produced biodiesel we&rsquo;ve seen from places like Argentina and Southeast Asia. Yet, overall, we are still pleased with the modest increase and grateful to have more market certainty. In future years, we hope implementation of this policy will have clearer direction for our producers well in advance, and reflect actual production capabilities.&rdquo; The final rule represents a commitment from EPA to get the RFS program back on track, Jobe said during a press call in early December, to meet the statutory deadlines going forward. This is extremely important to the stability of this industry and its ability to attract investment. &ldquo;This has been one of the biggest flaws in the program in the past few years,&rdquo; he says. &ldquo;It comes out strongly as a commitment to get on track and move forward.&rdquo; Getting the RFS program back on track means that the 2018 RVO for biomass-based diesel must be out 14 months in advance of the program year&mdash;or by Nov. 1, 2016. Ben Evans, director of federal communications for the NBB, says the organization fully expects EPA to meet its deadlines moving forward. So with the final rule for 2018 to be published by Nov. 1, 2016, this means that the proposal for 2018 should be out by summer. Steady, sustainable and meaningful growth is what this industry needs and, as Jobe says, this rule provides just that. &ldquo;We&rsquo;re going to see a doubling of our industry that is on track to happen in a five-year period,&rdquo; Jobe says, referring to 2012-&rsquo;17. &ldquo;That is demonstrable success.&rdquo; Jobe says the NBB&rsquo;s goal is to push for doubling the RVOs again in the next five years, from 2017-&rsquo;22. &ldquo;This is a very achievable and sustainable goal our industry will work to achieve,&rdquo; he says.
And according to what EPA writes in its final rulemaking, the agency agrees that continued growth is what&rsquo;s needed for biomass-based diesel. &ldquo;Although the biomass-based diesel industry has performed well in 2013 and in subsequent years, we believe that continued appropriate increases in the biomass-based diesel volume requirement will help provide stability to the biomass-based industry and encourage continued growth,&rdquo; EPA states. &ldquo;This industry is currently the single largest contributor to the advanced biofuel pool, one that to date has been largely responsible for providing the growth in advanced biofuels envisioned by Congress. Nevertheless, there has been variability in the number of biodiesel facilities in production over the last few years, as well as the percent utilization of individual facilities, both of which contribute uncertainty in the rate of production in the near future, and which can be mitigated to some degree with an increase in the biomass-based diesel applicable volume. Increasing the biomass-based diesel volume requirement should help to provide market conditions that allow these biomass-based diesel production facilities to operate with greater certainty. This result is consistent with the goals of the Act to increase the production and use of advanced biofuels.&rdquo;
Jobe says another positive aspect of this final rule is that it shows commitment on the part of the EPA and the administration to utilize this existing law and this program as a primary tool to achieve GHG reductions in the heavy-duty transportation sector. Producer Reactions Most producers Biodiesel Magazine spoke with are excited and encouraged by the higher biomass-based diesel volumes in the final RFS rule after the industry has suffered considerably for the past two years operating without a federal mandate. Ron Marr, director of regulatory affairs for Minnesota Soybean Processors, which owns and operates a 30 MMgy biodiesel plant in Brewster, Minnesota, tells Biodiesel Magazine&nbsp; that the EPA&rsquo;s final RFS rule is good and solid. &ldquo;When you look at where we were in 2013 when the EPA issued its proposal that flatlined biodiesel at 1.28 billion gallons, and now we&rsquo;re up to 2 billion gallons in the RFS for 2017, that is fireworks,&rdquo; he says. &ldquo;The increased volumes really show all the hard work and dedication of the D.C. [National Biodiesel Board] lobbying efforts, supported by Jefferson City, along with all the member involvement from the comments they submitted on the proposed rule. Overall, this is very good news.&rdquo; Marr also says that U.S. biodiesel producers manufactured 1 billion gallons in 2012, and with the new final rule, the industry will be producing twice that in 2017. &ldquo;To double production volumes in just five years is truly amazing,&rdquo; he says. The nation&rsquo;s largest biodiesel producer, Renewable Energy Group Inc., is also pleased with the final rule. &ldquo;This increased final RVO provides a solid foundation for REG to continue growth,&rdquo; says Daniel J. Oh, president and CEO of REG. &ldquo;We asked EPA for two things in this process&mdash;longer-term certainty and growth for biomass-based diesel&mdash;and this final rule provides both. This supports a solid, positive growth trajectory for biomass-based diesel over the next two years, particularly when you consider that this was a 1 billion gallon industry less than four years ago.&rdquo; Michael Doyle, president of Agron Bioenergy, a 15 MMgy biodiesel plant in Redwood City, California, says that the news is &ldquo;really encouraging. It&rsquo;s really positive that these volumes are going up.&rdquo;&nbsp; R. Delbert LeTang, president and CEO of SG Preston, a company with plans to construct five renewable diesel production facilities in North America, says that the EPA&rsquo;s final RFS rule is an &ldquo;exciting piece of news. These figures show a lot of progress. It tells us there is a growing acceptance for the ability of our industries to attain these kinds of volumes.&rdquo; Gabe Neeriemer, president of Patriot Biodiesel LLC, a 5.2 MMgy biodiesel plant in Greensboro, North Carolina, says the EPA&rsquo;s feet-dragging on issuing a final RFS rule for 2014-&rsquo;15 and the policy inconsistency and uncertainty has destroyed the industry. &ldquo;The damage is done,&rdquo; he says. &ldquo;It&rsquo;s too little, too late,&rdquo; he says about the Nov. 30 final rule. &ldquo;There&rsquo;s no way it&rsquo;s going to incentivize us to invest more or expand. We&rsquo;re just trying to get our heads above water.&rdquo; He adds, however, that he does like the direction RIN prices are going since the final rule was issued. &ldquo;If they&rsquo;re at $1 or more, I like it,&rdquo; Neeriemer says. &ldquo;But with diesel prices so low, it&rsquo;s not going to make up for the losses we&rsquo;ve incurred over the past 24 months.&rdquo; Blenders Tax Credit Reinstated At press time, a tax extenders package that included the two-year retroactive extension of the $1 per gallon biodiesel and renewable diesel blender tax credit was passed by both chambers of U.S. Congress as one of the legislative branch&rsquo;s last items for the session. The biodiesel blender tax credit will be retroactive to Jan. 1, 2015, and in effect through Dec. 31, 2016. While U.S. biodiesel producers and the NBB had high hopes the incentive would pass as a reformed production vs. a blender credit, the sector will continue the fight next year to educate lawmakers on the benefits of the restructuring.
&ldquo;While this is a missed opportunity to reform this tax incentive, biodiesel plants across the country will have a greater degree of predictability and stability under this extension,&rdquo; says Anne Steckel, vice president of federal affairs for NBB. &ldquo;We will continue pushing to reform this as a producer&rsquo;s credit next year to ensure that U.S. tax dollars are supporting U.S. workers and productivity.&rdquo; Oh, the CEO of REG, says he is pleased with and thankful for the extension. &ldquo;With the president&rsquo;s signature, this worthwhile incentive, combined with higher RFS biomass-based diesel volumes, will reinforce our company&rsquo;s continuing growth by encouraging higher blends and usage of advanced biofuels throughout North America,&rdquo; Oh says. &ldquo;We will continue to work with [legislators] and our industry partners to advocate for a conversion to a producer&rsquo;s tax credit in the future because we believe that is how this credit should be structured.&rdquo; Kimberley with IBB says he is grateful but also disappointed Congress did not follow Sen. Chuck Grassley&rsquo;s lead in restructuring the credit to go to actual biodiesel producers. &ldquo;Our state&rsquo;s biodiesel producers will have some degree of business clarity in the 2016 landscape, rather than gambling on whether it will be reinstated retroactively,&rdquo; Kimberley says. &ldquo;That&rsquo;s a major step forward in creating stability for this truly American energy industry. We&rsquo;re glad Congress recognized its importance. Making it a producer&rsquo;s credit would ensure that foreign-made biodiesel would not be eligible for the credit, better-fulfilling Congress&rsquo;s original intent with establishing this policy. We hope closing this loophole will still happen in future years.&rdquo; The new CEO of Canadian biodiesel producer Biox Corp., Alan Rickard, says the reinstatement of the tax credit will provide much-needed industry stability and support. &ldquo;On the retroactive passage of this legislation, Biox expects a positive impact of approximately $7 million to be recorded in our fiscal Q1 results, related to the entire 2015 calendar year,&rdquo; he says. &ldquo;Even greater is the market stability that the proactive passage of this legislation provides. This, combined with the EPA setting the RFS RVOs from 2014-&rsquo;17, and Ontario&rsquo;s Greener Diesel requirement increasing to 3 percent in 2016, gives us a positive outlook for the biomass-based diesel market in North America.&rdquo; More Work Ahead So while the industry celebrates victories in a renewed tax credit and final RFS rule that establishes a growth trajectory through 2017, along with a commitment from EPA to get the program back on track, plus signs the agency will continue growing biomass-based diesel RVOs, work is far from over. NBB continues to urge EPA to reconsider its approval of a fast-tracked method for Argentine biodiesel to qualify under the RFS program, and the organization will pick up where its work left off at the end of 2015 in trying to educate legislators on the importance of restructuring the tax credit to a producer incentive. Furthermore, with the 2018 RVO proposal expected by midyear, NBB must determine what volume it should suggest to EPA for 2018. &ldquo;I think it&rsquo;s too early for us to say that,&rdquo; Evans says. &ldquo;We have an RVO task force that carefully analyzes the markets each year and makes recommendations, so we will conduct that process again and develop proposals accordingly.&rdquo; In the meantime, producers are making moves to ramp-up production and get this industry back on solid ground. Author: Ron Kotrba Editor, Biodiesel Magazine 218-745-8347 <a href="mailto:rkotrba@bbiinternational.com" target="_blank">rkotrba@bbiinternational.com</a>

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After an extended period of policy uncertainty, the final renewable fuel standard (RFS) rule and a two-year retroactive reinstatement of the $1-per-gallon blenders tax credit are expected to bring stability back to the U.S. biodiesel sector. 

Back On Solid Ground

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The U.S. biodiesel industry had to prove its durability in 2015, but the release of finalized RVOs and reinstatement of the blender tax credit offer many a hopeful outlook for 2016. 

Poised for the Best Year Yet

From the outside, it may seem as though the biodiesel industry had a tough year.&nbsp; An amalgamation of economic and political factors have impacted most biofuel sectors, perhaps the most obvious of hindrances being plummeting oil prices. Diesel costs fell throughout 2015, recently reaching a six-year low, and are forecast to fall even further in 2016. The U.S. DOE&rsquo;s Short-Term Energy Outlook issued in December projected the average price of diesel to settle at $2.71 for 2015, and $2.67 in 2016. A recent OPIS report cited B100 prices at $3.37, falling from an average of $3.55 per gallon in summer 2015. To compound matters, the biodiesel tax credit expired Dec. 31, 2014, for the fourth time in six years. At press time, the U.S. House and Senate passed a two-year retroactive extension of the $1-per-gallon blender credit. Two weeks prior, a restructured version of the tax credit as a producer incentive was introduced in Congress. Producers were hopeful this would pass but at the last minute the incentive was reverted back to a blender credit, voted on, and passed. The credit is now retroactively in effect from Jan. 1, 2015, through Dec. 31, 2016. And finally, the U.S. EPA&rsquo;s renewable fuel standard (RFS) renewable volume obligation (RVO) numbers were woefully late, stirring up investor uncertainty and stymieing development. The highly anticipated numbers were released Nov. 30, 2015, and the volumes for biomass-based diesel were higher than the spring proposal&mdash;1.63 billion gallons for 2014, 1.73 billion gallons for 2015, 1.9 billion gallons for 2016, and 2 billion gallons for 2017. Good news overall, years late, nonetheless. Despite these hurdles, a closer evaluation of the U.S. biodiesel industry and feedback from producers and developers tells a bit of a different story. Below is a cross section of developing projects to watch in 2016.
2 Biodico Projects Roughly two decades ago, Russ Teall, founder and president of Biodico, launched a company that focused on modular, multifeedstock biodiesel plants called Biodiesel Industries. After prototypes, pilots and some work with the U.S. Department of Defense and U.S. DOE, the company built its first commercial plant in 2000, and subsequent plants in Australia, Colorado and Texas, all of which were sold off. &ldquo;We designed, built, operated and then sold to our strategic joint partners once everything was up and operating correctly, in order to fund the next plant,&rdquo; Teall says, adding that, considering the unique, proprietary technology of the plants the company builds, Biodico decided that its two latest projects, one recently completed and the other under development, will remain owned by the company. The first project, Biodico Westside in California&rsquo;s San Joaquin Valley, is a partnership between Biodico and Red Rock Ranch. The 20 MMgy plant was completed in the fall, with the first runs of biodiesel made in early December. &ldquo;The next facility will be at the Naval Base Ventura County, a joint venture we started with the U.S. Navy in 2002,&rdquo; Teall says. &ldquo;It initially focused on biodiesel, but now focuses on all biofuels and bioenergy. We&rsquo;ll be building a biodiesel facility there similar to the one up in west side, supported by renewable, combined-heat-and-power onsite resources.&rdquo; Similar to the design of Biodico Westside, the 10 MMgy Naval Base Ventura County plant&mdash;a partnership with the U.S. Navy, and supported by the California Energy Commission&mdash;will gasify dry biomass, mostly prunings from local orchards and vineyards, and also utilize anaerobic digestion for wet biomass such as crude glycerin, rotten fruits and vegetables, to produce heat and power consumed on-site, according to Teall. The location is already home to the Biodico Technology Test Site, which was built with a CEC grant and is the result of a five-year joint research and development project between Biodico and the Navy. One facet of the partnership is training Navy engineers to learn ASTM standards, Teall says, as well as what might go wrong in the process causing the fuel to fail to meet them.&nbsp; And that is where the most unique part of Biodico&rsquo;s process comes into play, according to Teall. &ldquo;A lot of the testing that&rsquo;s involved is time-consuming&mdash;running the gas chromatograph, it takes 45 minutes. The conclusion we&rsquo;ve come to is that, to make on-spec biodiesel, there are two ways to do it. One is to test the batch when it&rsquo;s done, and that might tell you that on Monday morning you made a mistake, but the other is to divide the process into a series of steps, and to test at the end of each portion of the process. By doing that, you&rsquo;re not wasting time finding out at the end of the day that you did something wrong in the morning,&rdquo; Teall says. Biodico has implemented the latter option&mdash;real-time testing. &ldquo;If you want to know, at end of the transesterification step, whether you have any residual glycerin, mono-, di- or triglycerides, you run a GC test and 45 minutes later it tells you,&rdquo; Teall says. &ldquo;We can tell exactly the state of the reaction at every single step&mdash;a series of sensors and protocols that give us that. We developed that with the U.S. Navy, and it&rsquo;s incorporated into the new facility.&rdquo; The next step is incorporating real-time sensing into automation. Real-time testing differentiates the company as a biodiesel producer, Teall says, and renewable energy is a second distinguishing factor. &ldquo;In 2004, we got a U.S. EPA award for using landfill gas to run our boilers, our first prototype biodiesel plant was run by small-scale solar &hellip; it&rsquo;s a continuation of that focus on renewable energy to create renewable fuels.&rdquo; On challenges with launching two projects in today&rsquo;s economic climate, Teall says there were not many surprises. &ldquo;It was our fifth plant, and we have a focus on getting things done thoroughly and quickly. We obtained all of the necessary permits, networked with all of the agencies, and the fact that it was my area of practice helped quite a bit in understanding what the rules are and what the agencies are looking for, and being able to give it to them.&rdquo; Teall says he doesn&rsquo;t worry so much about today&rsquo;s low diesel prices. &ldquo;The single largest factor in biodiesel production is feedstocks and their cost, and that has to be addressed right up front,&rdquo; he says. &ldquo;We need to zero out all of the subsidies and incentives, because if your business is not stable without subsidies and incentives, then you&rsquo;re exposing your investment to a lot of risk&mdash;people tend to forget that.&rdquo; Lakeview Biodiesel LLC When Lakeview Energy was considering purchasing a shuttered 10 MMgy biodiesel plant in Moberly, Missouri, it recognized it might appear outside of its interests, as the company has investments in agribusiness, wind energy and two ethanol plants located in Merrill, Iowa, and Coshocton, Ohio. But the prospect of diversifying its biofuel portfolio with biodiesel, the attractive characteristics of the Moberly site and its proximity to the company&rsquo;s ethanol plants equated to an opportunity that was just too appealing to pass up, according to CEO Jim Galvin. The plant retrofit is moving full steam ahead, he says, and plans are to bring it online in Q2 2016. &ldquo;I just recently visited the site, and right now, there is probably more equipment outside than inside,&rdquo; he says. At Moberly, the company will deploy a multifeedstock-capable transesterification process, using various fats, oils and greases, potentially including distillers corn oil from the company&rsquo;s ethanol plants. &ldquo;The geography of this plant was one of the big things for us,&rdquo; Galvin says. &ldquo;We&rsquo;re almost equal distance between Kansas City and St. Louis, where there are good local markets for our product. A project we&rsquo;re working on right now is access to rail&mdash;we&rsquo;re working with the local Missouri railroads to see what our options are there, to enable us to serve other local markets.&rdquo; Raw material availability was a key factor in the decision to purchase the plant and move forward with the retrofit, Galvin says. &ldquo;There&rsquo;s a good supply chain there. And one of the things we looked at was the potential for our [existing] plants&mdash;Plymouth or Three Rivers&mdash;to be able to supply corn oil, and whether it would be cost-effective for us. That&rsquo;s advantageous to this particular location.&rdquo; Another aspect Lakeview evaluated was what kind of local support the project would have. &ldquo;It was a very important first step,&rdquo; Galvin says. &ldquo;With any kind of stressed asset purchase, there can always be issues, so this was something we looked at before we made the investment. We&rsquo;ve gotten very good support from the local economic development and city councils, and we&rsquo;re recruiting staff at the moment and are in the interviewing process, and have taken on a number of people already.&rdquo; Galvin says diesel prices were considered but had little impact on the decision to purchase the Moberly plant, as the company makes long-term investments. &ldquo;If we made decisions based on the short term, we&rsquo;d never get anything done&mdash;the market moves so quickly,&rdquo; he says. &ldquo;Fundamentally, we looked at this and believe there&rsquo;s a bit of a consolidation play to take place in the biodiesel industry. Our plan is that if this goes successfully, we&rsquo;ll look at a number of other acquisitions in the biodiesel sector. We&rsquo;re not looking at this as a sole, stand-alone project.&rdquo; Duonix Beatrice When Irving, Texas-based Benefuel Inc. brought to market its novel, patented Ensel technology, a catalytic process capable of refining renewable, high free fatty acid (FFA) feedstocks into a variety of products, it snagged the interest of Flint Hills Resources LLC, a leading refining, chemicals, biofuels and ingredients company. Considering the interests and experience of both companies, the partnership made perfect sense. &ldquo;Flint Hills Resources is a leader in the transportation fuels industry, and has a long history of blending biofuels,&rdquo; says Jeremy Bezdek, vice president of biofuels and ingredients at Flint Hills Resources. &nbsp;In fact, the company has been blending ethanol into gasoline since the 1990s. &ldquo;We are continually looking for ways to innovate and optimize our transportation fuels business and further create value for our customers and society,&rdquo; Bezdek says. &ldquo;That&rsquo;s why, in 2010, our company purchased its first two ethanol plants in Iowa. Since then, we have added an additional five ethanol plants to our biofuels fleet making Flint Hills Resources the fifth largest producer of ethanol in the U.S.&rdquo; In 2011, FHR purchased the Beatrice, Nebraska, biodiesel plant out of bankruptcy. The same year, it made an equity investment in Benefuel, a company that Bezdek says has developed a technology that could dramatically improve the cost-effectiveness of biodiesel production. &ldquo;We believe the Benefuel technology has the potential to expand the range of low-cost feedstocks used in biodiesel production,&rdquo; he says. &ldquo;The Ensel technology process combines esterification of FFAs and transesterification of triglycerides into a single process step, which is a long-standing technology goal of the biodiesel and oleochemical industries.&rdquo; Resulting from FHR&rsquo;s investment in Benefuel is the Beatrice plant, a joint venture titled Duonix Beatrice, which will represent the first commercial use of the Ensel technology. &ldquo;Flint Hills Resources has been hired by Duonix to be the operator and employer,&rdquo; Bezdek explains. Duonix Beatrice will be feedstock-flexible, able to run on distillers corn oil, used cooking oil and animal tallow, and, of course, soybean oil. &ldquo;Feedstock flexibility will allow the plant to purchase lower-cost feedstocks,&rdquo; he says, adding that the types purchased will depend on the market. Progress continues at the Duonix Beatrice plant, with a start-up planned in early Q1 2016, Bezdek says. &ldquo;In preparation for the planned start-up, we have begun plant commissioning including conducting safety checks on plant equipment. These checks include tests on piping integrity, and safety systems designed to maintain balance in industrial systems.&rdquo; On project challenges, Bezdek says Beatrice marks the first time FHR has built a plant from nearly the ground up. &ldquo;That means we couldn&rsquo;t draw on past experience as a guide,&rdquo; he says. &ldquo;It began with a clean slate.&rdquo; And part of working from a clean slate meant putting together a new&mdash;and right&mdash;team, which will include about 50 people when the facility is operational. &ldquo;We are happy with the results,&rdquo; Bezdek says. &ldquo;We have a talented team of individuals, some drawn from within Flint Hills Resources, some from Benefuel, and some drawn from elsewhere, with extensive experience. They have worked hard to get the plant up and running.&rdquo;&nbsp; Another hurdle faced in the beginning was thoroughly testing and validating the Ensel technology. To do so, a pilot plant was constructed near FHR&rsquo;s Euless, Texas, fuel terminal. &ldquo;After multiple rounds of testing, we felt confident the technology would be sustainable at a commercial-scale operation,&rdquo; Bezdek says. &ldquo;Our next challenge will be scaling up production and, with luck, proving our assumptions were correct.&rdquo; And finally, earlier in the year, Beatrice and surrounding areas were hit with 25-year flooding, which washed away some of the railroad tracks leading to the plant, leaving equipment stranded at another location. &ldquo;Waiting for delivery put pressure on our timeline and resulted in some construction delays,&rdquo; Bezdek says. On the recent release of the RFS RVO numbers, Bezdek says they have no bearing on the company&rsquo;s decision to operate its plants. &ldquo;We don&rsquo;t consider it a significant factor in the viability of this project, or our biofuels and ingredients business,&rdquo; he says. CHS/Jatrodiesel Inc. Colocated with CHS&rsquo;s 125 MMgy ethanol plant in Annawan, Illinois, is a 5 MMgy supercritical biodiesel plant designed and built by process technology firm Jatrodiesel Inc. In an early November interview, Jatrodiesel President Raj Mosali told Biodiesel Magazine that the final stages of tying the automation into the process were underway. The innovative facility is able to capitalize on the existing ethanol plant&rsquo;s infrastructure, steam, and distillers corn oil byproduct for biodiesel feedstock. Jatrodiesel describes its Super technology as a single-stage process that eliminates esterification and transesterification, puts no limit on FFA levels in feedstock, and cuts the cost of traditional biodiesel refining by 25 to 28 percent, in part by eliminating the need for conventional catalysts. During the process, feedstock is mixed with methanol and is introduced into the Super column, which operates in a supercritical environment. High temperatures and pressures are maintained, and complete conversion takes place in minutes with minimal or no loss in yield, according to Jatrodiesel. The feedstock&rsquo;s water content also 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 water- or dry-washed to remove excess glycerin. &ldquo;This changes the whole landscape,&rdquo; Mosali says. &ldquo;The simplicity is remarkable&mdash;we&rsquo;re talking three or four steps in the Super process vs. 10 steps in traditional biodiesel processing. We have built 18 traditional biodiesel plants, and we know the complexity in the process due to variable feedstocks and FFA and, also, the complexity in operations due to various processes involved. The Super process addresses those issues and solves them.&rdquo; There were three main challenges in commercializing the Super process, according to Mosali. The first was scale-up of a technology that has never before been commercialized. &ldquo;There&rsquo;s no supercritical process used in a chemical plant at this volume, so all the pumps, valves, reactors, automation&mdash;it was all new ground for us,&rdquo; he says. The next hurdle was making the process truly continuous vs. batch. Most supercritical operations in other industries are batch, Mosali explains. &ldquo;How to pressurize and relieve in continuous fashion was important,&rdquo; he says. The final and perhaps most significant challenge was overcoming the high equipment costs for a supercritical process. &ldquo;If our capex was two to three times the cost of a traditional biodiesel plant, then simplicity and lower operational costs of the process wouldn&rsquo;t matter,&rdquo; Mosali says. Forging Ahead In addition to the above projects, numerous others are under development, including Renewable Energy Group Inc.&rsquo;s four plants in Emporia, Kansas; Clovis, New Mexico; Atlanta, Georgia; and New Orleans, Louisiana. Biodiesel Magazine was unable to obtain project updates from REG, and information on the projects wasn&rsquo;t provided during its Q3 2015 financial earnings call. However, CEO Daniel Oh said the company is making a &ldquo;meaningful upgrade&rdquo; at its Danville, Illinois, biorefinery. &ldquo;We&rsquo;re investing over $30 million for a variety of enhancements that will enable us to produce high-quality biodiesel more efficiently,&rdquo; he said during the call. &ldquo;We&rsquo;re adding distillation equipment that will result in a more pure final product, as well as expanding feedstock pretreatment capacity, storage and other logistical enhancements. Those upgrades are on track and we expect upgrade work at Danville to be completed around the middle of 2016.&rdquo; Additional proposed projects include Viridis Fuels&rsquo; 10 MMgy Oakland, California, facility, which received a CEC grant and is in early stages of development, as well as a new glycerin refinery at Louis Dreyfus Commodities 90 MMgy plant in Claypool, Indiana, scheduled to come online by the end of 2015. In addition, New Heaven Chemicals is nearing completion of an 18,000-ton sodium methylate plant in Manly, Iowa, to serve the growing, regional market, says Prasad Devineni, NHC managing director, with a second, larger catalyst plant under development in Houston. While the past year hasn&rsquo;t been the best of times, it certainly hasn&rsquo;t been the worst, and many projects have been moving forward, tax credit or not, low diesel prices or high, confident in biodiesel&rsquo;s role in the domestic fuel market. The biodiesel industry continues to develop and evolve, demonstrating the ability to stand on its own two feet. &nbsp; Author: Anna Simet Associate Editor, Biodiesel Magazine 701-738-4961 <a href="mailto:asimet@bbiinternational.com" target="_blank">asimet@bbiinternational.com</a>

Lakeview Energy LLC bought the shuttered Producerâ€™s Choice Soy Energy biodiesel plant in Moberly, Missouri, now called Lakeview Biodiesel. 

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Biodico employs a variety of renewable energies and new process testing technologies at its two new California biodiesel facilities. 

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Duonix, a joint venture between Flint Hills Resources and Benefuel, nears completion of its retrofitting project in Beatrice, Nebraska, the former 50 MMgy Beatrice Biodiesel facility. 

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At the end of 2015, CHS started up a unique 5 MMgy supercritical biodiesel plant designed and built by Jatrodiesel. The biodiesel production site is colocated with its 125 MMgy ethanol plant in Annawan, Illinois.

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Despite less than ideal economic and policy conditions, the biodiesel industry continues to move forward, and not just one project at a time. Here are several plants that have come on-line in late 2015 or are preparing to start operations in 2016. 

Standing On Its Own 2 Feet

The National Biodiesel Board was honored by a number of third-party organizations in 2015 for successful efforts and achievements in advancing the biodiesel industry. Honors came from regional and national organizations, and recognized staff members, marketing efforts and the organization as a whole. &ldquo;It&rsquo;s an honor to be recognized by other distinguished organizations for our industry&rsquo;s efforts,&rdquo; said NBB CEO Joe Jobe. &ldquo;But maybe more importantly, it is verification that we are focused in the right areas and what we do to move the industry forward is successful and relevant.&rdquo; 2015 honors included: 
The United Soybean Board&rsquo;s 'Excellence in Oil' award This is one of the highest awards given annually by the national soybean checkoff organization to an individual or organization that has been instrumental in developing major new opportunities for U.S. soybeans greatly impacting the profit potential for all U.S. soybean farmers. The 'Initiative of the Year' award from the Greater Washington Region Clean Cities Coalition The coalition is part of the U.S. DOE Clean Cities program. Anne Steckel, NBB vice president of federal affairs, was presented with the award for her work to advance the renewable fuel standard. The award recognizes an alternative fuels team leader who played a key role in closing a significant and complex alternative fuels challenge during the past year. The 'Outstanding Achievement Award' from the Ohio Soybean Council The state organization annually recognizes one person or organization that has significantly contributed to the goals of the soybean checkoff. NBB was chosen because of the new opportunities created for Ohio soybean farmers through industry growth from approximately 200,000 gallons in 1999 to almost 2 billion gallons in 2015. Honorable mention award from the min&rsquo;s Integrated Marketing Awards NBB&rsquo;s national advertising campaign &ldquo;Coast-to-Coast&rdquo; received honorable mention in the Print/TV or Radio Bundle category as top media and marketing executives gathered in New York City to honor the work of their colleagues and peers, and share best practices and lessons learned in the marketing space.

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Third-party groups highlight NBB successes with industry awards

The National Biodiesel Board continues to spearhead the only comprehensive national education campaign designed to promote biodiesel. The effort reaches many audiences from opinion leaders to local fleet managers and everyone in between. Among NBB&rsquo;s constant objectives is to safeguard against roadblocks that might impede industry growth. &ldquo;Our advertising budget is less than 1 percent of petroleum&rsquo;s ad budgets, but we are confident this campaign is helping,&rdquo; said Jessica Robinson, NBB communications director. &ldquo;An extensive news analysis comparing 2010 coverage to 2015 coverage showed a decrease in biodiesel coverage of about 35 percent overall. However, biodiesel with &lsquo;advanced&rsquo; increased more than 300 percent. So even though biodiesel coverage has dropped, our message&mdash;that biodiesel is advanced&mdash;is getting through.&rdquo; The advertising portion of the 2015 campaign included a 30-second commercial that aired on national television networks, as well as on select local broadcast outlets and cable news programs throughout the summer and fall. The digital campaign included banner advertising and a 15-second version of the television commercial presented as a preroll to programming on news platforms and as openers to videos on YouTube. Radio and print focused on target areas rounded out the comprehensive campaign, anchored by a relaunched website that provided video features on how biodiesel is making a difference from coast to coast. Overall, the campaign successfully earned a grand total of 62.4 million impressions, more than 640,000 online views of the TV commercial, and 67,500 clicks through to AmericasAdvancedBiofuel.com.
&ldquo;According to NBB&rsquo;s annual survey those who have seen, read or heard the ads are much more likely to have a positive image of biodiesel,&rdquo; Robinson added. &ldquo;The difference is more than 20 percent and highlights the significant role of this education effort.&rdquo;

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National ad campaign educates from coast to coast

The National Biodiesel Board is the national trade association representing America&rsquo;s first advanced biofuel. NBB works to create sustainable biodiesel industry growth through governmental affairs, education, communication, technical and quality assurance programs. Serving as the coordinating body for research and development in the U.S., the organization is comprised of state, national and international feedstock and feedstock processor organizations, biodiesel producers, fuel marketers and distributors, and technology providers. &ldquo;The biodiesel industry has achieved much in its relatively short existence through strong leadership and a determined, unified commitment to purpose,&rdquo; said Doug Whitehead, NBB director of operations and membership. &ldquo;Engaged participation is crucial to ensure that momentum continues and NBB staff members are dedicated to serving the membership every single day and in everything that we do.&rdquo; NBB membership has grown significantly over the years from its start with seven members in 1992 to nearly 200 member companies today. These companies vary from Fortune 100 companies to small, family-owned businesses. This diverse membership base has provided a strong foundation for growth with member companies in 44 states. No matter your involvement in the industry, NBB has a lot to offer. To find out how to become a member, visit nbb.org/join-us or contact Doug Whitehead in the NBB office at 800-841-5849.

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NBB: Your membership organization

Nearly a decade ago, California embarked upon a landmark climate initiative commonly referred to as AB 32. The law requires greenhouse gas (GHG) emissions reductions to 1990 levels by 2020&mdash;a reduction of approximately 15 percent below expected emissions in a &ldquo;business as usual&rdquo; scenario. AB 32 includes a number of ambitious climate programs that call for reductions in every sector of the economy. The state&rsquo;s low carbon fuel standard (LCFS) focuses on transportation. &ldquo;Over the past four years of the LCFS, the California biomass-based diesel market has grown from 10 million to 200 million gallons,&rdquo; said Don Scott, director of sustainability at the National Biodiesel Board. &ldquo;This shows how successful carbon policies can be at spurring growth in clean fuels like biodiesel.&rdquo; In part because of the success demonstrated in California, both Oregon and British Columbia have also adopted low carbon transportation policies, and they are setting precedent for the rest of the world. This means that approximately 5 billion gallons of diesel are now under low carbon fuel policies on the West Coast. NBB has concentrated significant resources over the past eight years to ensure that biodiesel participates in these programs. The technical data developed by NBB played a significant role in the determinations by the California Air Resources Board confirming that biodiesel reduces GHG emissions by 50 to 80 percent compared to petroleum diesel. This makes biodiesel the lowest carbon liquid fuel available in today&rsquo;s marketplace. &ldquo;Biodiesel is the most sustainable fuel on the planet,&rdquo; Scott said. &ldquo;But quantifying the precise carbon intensity of fuel from varying feedstocks, geographies, and process technologies does not happen without significant investment in data and scientific analysis. Lifecycle assessment is a complex undertaking that required participation from diverse stakeholders such as the California Biodiesel Alliance, our friends in the environmental community, and NBB members.&rdquo;
On a national scale, biomass-based diesel has the potential to reduce carbon emissions by 40 million tons annually, or the equivalent of removing more than 30 million passenger cars from the road.

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In part because of the success demonstrated in California with its low carbon fuel standard (LCFS), both Oregon and British Columbia have also adopted low carbon transportation policies, and they are setting precedent for the rest of the world. 

West Coast market focus proves successful for biodiesel

The National Biodiesel Board is a member organization that operates under the direction of the membership on a daily basis. Fifteen individuals from member companies volunteer to sit on the board for two-year terms and members guide the daily activities of staff through involvement in the board, standing committees, strategic planning, the program-development process, membership surveys, regional and national member meetings, and more. Each November members vote to fill half of the positions on the governing board. In 2015 members elected to begin their two-year term include Kent Engelbrecht, ADM; Ron Heck, Iowa Soybean Association; Ed Hegland, Minnesota Soybean Research and Promotion Council; Ron Marr, Minnesota Soybean Processors; Steve Nogel, AGP; Amy Sigg Davis, Ohio Soybean Council; Robert Stobaugh, Arkansas Soybean Promotion Board; and Chad Stone, Renewable Energy Group Inc. Others that continue to serve their second year include Mike Cunningham, American Soybean Association; Greg Anderson, Nebraska Soybean Board; Jennifer Case, New Leaf Biofuel; Timothy Keaveney, Hero BX; Steven Levy, Sprague Operation Resources; Robert Morton, Newport Biodiesel; and Ben Wootton, World Energy. &ldquo;All of this is done so NBB as an organization is truly representing the best interests of our members,&rdquo; said Donnell Rehagen, NBB chief operating officer. &ldquo;Being able to come together, identify our strengths and weaknesses, and then go out and execute in the areas that our members determine will help us the most is one of the biggest advantages we have as an industry.&rdquo; Additionally, the new board elected four new officers for 2016 including chairman, Ron Marr; vice chair, Jennifer Case; treasurer, Greg Anderson; and secretary, Kent Engelbrecht. &ldquo;Biodiesel faces many challenges and I&rsquo;m excited to be able to serve the industry that I care so much about,&rdquo; said Marr. &ldquo;This industry has reached nearly 2 billion gallons for a third-consecutive year and will continue to grow into the future under the direction of a unified industry voice.&rdquo;

NBB members elected Ron Marr, Minnesota Soybean Processors, as their new chairman.

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NBB members set direction of their industry

October 2015 was the two-year anniversary of the leaked draft renewable volume obligation (RVO) proposal from the U.S. EPA that signaled the agency&rsquo;s intention to stall biomass-based diesel at 1.28 billion gallons for at least two years.
&ldquo;That devastating leaked draft launched us on a two-year odyssey that cast the future of the industry into a state of limbo,&rdquo; said Anne Steckel, National Biodiesel Board vice president of federal affairs. &ldquo;EPA proposed the rule in the fall of 2013 and stated multiple times that they would improve the rule by spring of 2014. In December 2014, still without a final rule, they withdrew the proposed rule and said they would issue a revised proposed 2014 rule, sometime in 2015, and try to issue a final 2014 rule by the end of 2015.&rdquo; That much-improved revised proposed rule came in June of 2015, and EPA officially righted the renewable fuel standard (RFS) ship with a final rule Nov. 30, 2015. The improved rule that grew both biomass-based diesel and overall advanced biofuel volumes came after NBB mobilized an aggressive advocacy campaign opposing the original proposal. &ldquo;We generated more congressional support than we&rsquo;ve ever had, with nearly 100 lawmakers signing letters to the White House calling for growth and powerful lawmakers holding press conferences or calling the White House directly,&rdquo; said Steckel. &ldquo;We engineered an aggressive media campaign that saw several hundred op-eds, letters, and news stories published. And we organized an aggressive grassroots campaign that raised the profile of biodiesel in Washington and increased pressure on policy makers to act.&rdquo; While the volumes weren&rsquo;t as high as NBB advocated for, they were significantly higher than the original 2013 proposal at 1.28 billion gallons per year. The November decision was also significant as it returned the RFS rulemaking process to the timeline in the statute.

More than a dozen industry representatives testified in support of raising RFS volumes at the summer EPA hearing in Kansas City, including NBB Vice President of Federal Affairs Anne Steckel.

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Industry advocacy helps get RFS volume growth back on track

Hardship. Uncertainty. Perseverance. It may sound a bit like a broken record if you&rsquo;ve been around this industry very long, but the challenges we&rsquo;ve faced over the course of our history aren&rsquo;t for the faint of heart. And much like the other challenges of our past, this industry again stepped up with a strong, united front and succeeded. October 2015 marked the two-year anniversary of the infamous leaked draft renewable volume obligation (RVO) proposal that signaled the U.S. EPA&rsquo;s intention to cap biomass-based diesel at 1.28 billion gallons for two years and presumably forevermore. It launched us on a two-year odyssey that cast the future of the industry into a state of limbo. The National Biodiesel Board&rsquo;s top priorities for 2015 all fit together like the pieces of a puzzle. 1) Finalize RVOs for 2014-&rsquo;16 with a path for growth, 2) extend the biodiesel tax credit, 3) educate biofuel detractors on the benefits of biodiesel to their goals, and 4) continue to maintain a unified biodiesel industry and coordinate membership to be able to continue the powerful leveraging of resources. I&rsquo;m proud to say that as of this writing, we were in a good position to achieve all four of these goals by the end of the year. The renewable fuel standard (RFS) volumes were finalized with growth in the biomass-based diesel category to 2 billion gallons in 2017. NBB&rsquo;s various expert testimony at the June public hearing, as well as our comprehensive comments submitted in July, and our continued advocacy gave extensive evidence that our industry can do even more in 2016 and 2017 to help the RFS achieve its advanced biofuels goals and strengthen the overall program. The volumes were not as high as they could have been, but were much better than the 1.28-billion-gallon proposal where they started.
We&rsquo;ve seen strong bipartisan support for the biodiesel tax incentive with legislation included in both House and Senate versions of tax packages in 2015. There has also been momentum to transition to a producer&rsquo;s credit as of this writing. A production credit has been an industry priority for more than six years and would help concentrate taxpayer support on U.S. companies stimulating growth in domestic production. The Advanced Biofuel Acceleration Project is the single largest program in NBB&rsquo;s history and is the only national educational campaign for biodiesel. Along with educating the general public and key decision makers on the benefits of biodiesel, it has allowed us to reach specific detractor groups like environmental organizations and the livestock industry on their own turf. We have been able to build the case for biodiesel through independent data and show them how it helps them reach their own industry goals. And finally, our successes over the past two years couldn&rsquo;t have happened without priority No. 4, maintaining a unified industry. With members in 44 states and three Canadian provinces, our voice in Washington, D.C., is much louder than other industries our size because we have a unified message coming from a diverse coalition of companies from across the country. The success of the biodiesel industry is a direct result of the diverse, united coalition we have built. We are large, publicly traded corporations and small businesses, Midwesterners and West Coasters, entrepreneurs and farmers, including our soybean partners who have so generously invested in us with both their policy support and checkoff dollars. This partnership has increased and leveraged the value of everyone&rsquo;s dollars and afforded the industry as a united group to do more than any of us could have done individually. Our industry goals couldn&rsquo;t have been achieved without the relentless, diverse, unified, collective voice of an industry standing together. We must not let up as we push for a more robust policy and continued market expansion in 2016. We must protect the industry we built and continue to move forward. It won&rsquo;t be easy, but together we will continue our record of success. Joe Jobe CEO National Biodiesel Board

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Industry Perseverance Pays in 2015 

The biodiesel producer deals with many issues in the process of making a quality, in-spec product at a good profit. Many long hours are spent trying to maximize yield and to find and use lower-cost feedstocks. Optimizing the process is a must to stay profitable, and how that is done is as diverse as the biodiesel plants themselves, and the people who operate them. No matter what the process, fatty acid methyl esters are the goal: making them in spec and in the highest yield. While many different processes are used in biodiesel plants, most processes rely on sodium or potassium methylate and methanol to convert oils into biodiesel. The neutralization of crude biodiesel to remove any methylate catalyst and salts is often done by washing the biodiesel with a dilute water solution of an acid. Typical acids used for this process step are sulfuric, acetic, citric, phosphoric, sulfuric and hydrochloric. Each has disadvantages that are addressed by a relatively new, environmentally friendly acid, Lutropur brand methanesulfonic acid (MSA). If a producer is using sulfuric acid in this step, Lutropur MSA can give up to a 3 percent increase in biodiesel yield due to faster and cleaner phase separation and less corrosion. Scale formation that can occur with citric and phosphoric acids is eliminated with Lutropur MSA, and phase separation is faster with Lutropur MSA, which can improve the efficiency of the process in comparison to acetic and phosphoric acids. If a producer is using hydrochloric acid, Lutropur MSA is much safer (no fumes) and much less corrosive. Like the neutralization of biodiesel, producers have typically used common acids for the neutralization of glycerin and soap splitting to separate fatty acids. Often the producer accepts the undesirable consequences of their choice because the chosen acid is familiar and perhaps the only one that they have experience using. Sulfuric, hydrochloric, acetic and citric acids can each be used in this application; however, each has disadvantages. Sulfuric acid generates insoluble sulfates that require solids handling, and the corrosivity of sulfuric acid is always a concern. In addition, sulfuric acid causes darkening of the oil and reacts with fatty acids to form sulfates that make separations more difficult. Hydrochloric acid is very corrosive, generally requires glass-lined vessels, and liberates toxic fumes. It too can cause the precipitation of insoluble salts, which can negatively impact the process. Acetic acid has the drawback of being volatile and having an odor. The use of citric acid can cause the formation of insoluble citrates, which can cause fouling. Lutropur MSA is an excellent alternative to these acids for the neutralization of glycerin. The salts of MSA have a high solubility in glycerin, which means solids formation is not an issue with MSA as can be the case with most other acids. Because it is not an oxidizing acid like sulfuric acid, it gives fast phase separation and yields a higher quality free fatty acid product. MSA is relatively low in corrosivity compared to sulfuric and hydrochloric acids, which is important for equipment longevity. Lutropur MSA is a friendly acid: It has no odor like acetic acid, and it has very low volatility, making it a good choice for glycerin distillation processes.&nbsp; The conventional strong acid catalyst for free fatty acid conversion is sulfuric acid, which has many disadvantages: corrosivity, formation of emulsifier byproducts that lengthen separation times, and color development in biodiesel, among others. Lutropur MSA is an excellent alternative to sulfuric acid for this process. This unique catalyst allows the clean transformation of fatty acids into a much better-colored biodiesel product. It clearly outperforms sulfuric acid by being less corrosive on expensive stainless steel equipment and by allowing the use of cheaper, lower-quality feedstocks with high levels of free fatty acids while giving better and faster phase separation through the elimination or reduction of undesired side reactions. For biodiesel producers, the goal is cost-effective production that leads to improved profitability. Whether you are trying to improve process separations, eliminate the formation of solids, utilize high free fatty acid feedstocks, improve biodiesel yield, or just need a high-quality methylate catalyst, Lutropur MSA is a process acid that certainly should be considered. Author: Joseph Borst Senior Technical Service Representative, BASF Corp. <a href="mailto:joseph.borst@basf.com" target="_blank">joseph.borst@basf.com</a>

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Lutropur MSA can be used to improve process separations, eliminate formation of solids, allow processing of high FFA feedstocks and boost biodiesel yield. Lutropur MSA has several benefits over conventional acids used in biodiesel processing. 

2016 Edition

Columns

California Launches New Fuel Policies in 2016

ABOUT-FACE

Industry Perseverance Pays in 2015

A New Acid for Your Biodiesel Process

Featured

Biodiesel Opportunities Abroad

Back On Solid Ground

Poised for the Best Year Yet

Standing On Its Own 2 Feet

Contributions

Our Commitment to a Sustainable Future

2016 Edition.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Columns

California Launches New Fuel Policies in 2016

ABOUT-FACE

Industry Perseverance Pays in 2015

A New Acid for Your Biodiesel Process

Featured

Biodiesel Opportunities Abroad

Back On Solid Ground

Poised for the Best Year Yet

Standing On Its Own 2 Feet

Contributions

Our Commitment to a Sustainable Future

2016 Edition