2020 Spring Biodiesel Magazine by BBI International

2020 Spring Edition

FEEDSTOCK PREP Process Technology Providers Share Pretreatment Approaches Page 14

Plus New Feedstock In Town

Page 22

And

Wire Fraud On the Rise

Page 26

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Science behind gy Technolo

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CONTENTS 2020 SPRING ISSUE VOLUME 17 ISSUE 2

FEATURES

14 Joint Evolution PRETREATMENT

As the biodiesel industry evolved to rely more on waste feedstocks, and as renewable diesel emerges, technology providers have adapted their pretreatment offerings

BY RON KOTRBA

22 Opportunity Knocking FEEDSTOCK

BioEconomy Solutions is working to commercialize a new feedstock for biomass-based diesel production while creating jobs and making contracted oil deliveries

BY RON KOTRBA

26 The Other Unseen Enemy INDUSTRY

Spear phishing is costing businesses billions of dollars, and as the coronavirus outbreak crashes the global economy, email fraud will be on the rise

BY RON KOTRBA

DEPARTMENTS

4 Editorâ&#x20AC;&#x2122;s Note

A New Normal BY RON KOTRBA

6 Business Briefs 8 Inside NBB

26 Advertiser Index ON THE COVER:

Austria-based BDI-BioEnergy International, a process technology provider that has been focused on conversion of waste to biodiesel since its inception in 1996, shares a pretreatment system schematic. IMAGE: BDI-BIOENERGY INTERNATIONAL

CORRECTION: In the Winter 2020 print edition, on page 38, Chris Peterson of Hero BX was mistakenly referred to as vice president. Peterson is, in fact, the president of Hero BX.

29 30 13 21 18 12 32 2 5, 31 19 17

AG Energy Transport LLC Air Liquide Global E&C Solutions BDI-BioEnergy International GmbH Biodiesel Magazine Biodiesel Magazine Top News Biodiesel Magazine Webinar Series Crown Iron Works Company Desmet Ballestra North America National Biodiesel Board Verum Analytics WWS, Inc. www.BiodieselMagazine.com

EDITOR'S NOTE

A NEW NORMAL Ron Kotrba

Editor in Chief Biodiesel Magazine rkotrba@bbiinternational.com

In March, as I wrapped up the contents for this issue after interviewing sources over the past few months for articles in this edition, the coronavirus pandemic changed all our lives in a matter of weeks. I was in North Carolina mid-March helping my par-

ents after my stepdad had major surgery. Thankfully, he is recovering well and is now out of the hospital, but during those nine days life in America changed, and we witnessed it hour by hour on the news, through hospital visitation policy, and just trying to buy items at the store. It was unsettling being away from my home in Minnesota during all of this, especially knowing I had to be on a plane to get back there. But with family was where I needed to be, and I wouldn’t have changed that for anything. As we all adjust to a new normal—for how long that will be no one really knows—the events of the day may have effects felt for years to come. But the short-term effects are unnerving and anxietyproducing: plunging stock markets; skyrocketing unemployment; shelter-in-place requirements; an oil feud between Russia and OPEC coupled with reduced demand for liquid fuels, sending crude oil and refined petroleum product prices on a downward spiral; healthcare systems on the brink of overload; and existential concerns about our own and our loved ones’ health. Questions flood the mind, ones as important as whether my elderly parents will get infected and, if they do, will they survive, to the ridiculousness of wondering whether I will be able to buy more toilet paper when the need arises. I hope each and every one my friends, acquaintances, colleagues and associates in this important, topnotch energy sector are doing as well as they can, and I wish safety, good health and peace of mind upon all of you during this unprecedented time. The most important thing is our health and well-being. If we practice physical distancing and follow guidelines from the authorities, as tough as this might be, we can sacrifice a little time, short-term inconvenience and a slow economy for our long-term health, prosperity and security. How all this shakes out will be known soon enough. But with retroactive tax credit refunds and government assistance from the $2 trillion stimulus package signed into law at press time, I look forward to a speedy industry recovery so you all can do what you do best—crank out billions of high-quality gallons to help clean the air, curb climate change and keep local communities employed, engaged and inspired. This industry has seen tough times before, some could argue there’s been more bad times than good, and the resilience of biodiesel producers is unmatched. Perhaps this is politically insensitive for me to say, but with all the biodiesel sector has faced over the years—incessant attacks from Big Oil, inconsistent government support, the financial crisis of 2008 and a prolonged recession, a seriously delayed implementation of RFS, RIN and tax fraud, overcoming crippling fuel quality issues, multifaceted trade wars, food vs. fuel, and attacks from misguided environmentalists questioning the sustainability and carbon intensity of your product—it’s going to take a heck of a lot more than a viral pandemic, slow economy and low oil prices to keep you down. I encourage you, whether we know each other or not, to drop me a line or send me an email just to say “hi,” or to let me know how you’re doing through this. I truly want to hear from my biodiesel friends, now more than ever. Until next time, be safe.

BIODIESEL MAGAZINE

2020 SPRING EDITION

www.BiodieselMagazine.com E D I T O R I A L Ron Kotrba Editor in Chief rkotrba@bbiinternational.com Jan Tellmann Copy Editor jtellmann@bbiinternational.com P U B L I S H I N G

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President tbryan@bbiinternational.com

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Vice President of Operations/Marketing & Sales jnelson@bbiinternational.com Business Development Director hbrockhouse@bbiinternational.com

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BusinessBriefs

People, Products & Partnerships

John and Robin Puthusseril PHOTO: CHICAGO AREA CLEAN CITIES COALITION

The Greater Chicago I-55 Truck Plaza was awarded Service Station of the Year by the Chicago Area Clean Cities Coalition during its annual December meeting. The station was one of the first family-owned and operated independent truck plazas in the U.S. to start selling B11 in 2006. In 2013, Robin Puthusseril, vice president and co-owner, and her father John Puthusseril, invested more than half a million dollars to build infrastructure to begin blending and selling higher blends of premium biodiesel to customers. Today, biodiesel is blended and sold year-round at every diesel dispenser, marketed as premium diesel. The Greater Chicago I-55 Truck Plaza also offers fleet customers bulk B100 biodiesel for purchase. Robin has testified before Congress to explain the benefits of biodiesel and why the biodiesel tax credit is so important.

vestments into expanding infrastructure, including installation of biodiesel terminals in Des Moines and State Center. The company has the ability to provide custom blending options. After more than three years, $6 million of investment and thousands of hours of management time, North Dakota Soybean Processors has abandoned its efforts to build a large-scale soybean crushing facility at the Spiritwood Energy Park in Spiritwood, North Dakota. Site and plant engineering were completed, construction contract bids were solicited, an air permit was in hand, and financing was in place when the Spiritwood Energy Park Association board voted in July to terminate NDSP’s site contract. NDSP then went to court to try and build at that site. In early February, NDSP agreed with SEPA to dismiss its lawsuit with prejudice, meaning its bid to build a plant at the Spiritwood site was over. NDSP continues to search for a new site to build its plant to crush 42 million bushels of local soybeans a year. NDSP is currently a wholly owned subsidiary of Minnesota Soybean Processors.

Joe Jobe, president and founder of Rock House Advisors, and Peter Behrle, managing director of PB Renewables LLC, are working with a $5.5 billion financial institution to offer biodiesel tax credit (BTC) bridge Jobe loan funding for biodiesel producers. According to Jobe and Behrle, the bank is willing to rapidly underwrite and approve BTC-backed bridge loans to biodiesel producers while the producers await the return of their 2018 and 2019 BTC refunds from the IRS. Jobe is former CEO of the National Biodiesel Board and founded Rock House Advisors in 2016. Behrle founded PB Renewables in 2006 as an advisory and funding source for renewable fuel producers. “2018 and 2019 especially were very difficult years,” Jobe said. “I’m glad to be able to help [producers] create some expedited liquidity with this bridge funding to get the industry back on its feet as quickly as possible.”

Saola Energy built East Kansas Agri-Energy’s renewable diesel facility in Garnett, Kansas. PHOTO: SAOLA ENERGY LLC

Naig, center, with Greg Chance, left, and Jim Martin, Diamond Oil PHOTO: FUELIOWA

Iowa Secretary of Agriculture Mike Naig presented Diamond Oil Company Inc. of Des Moines with the 2020 Biodiesel Marketing Award at the FUELIowa annual meeting Jan. 14. The award was created by FUELIowa in partnership with the Iowa Department of Agriculture and Land Stewardship to recognize fuel marketers that have gone above and beyond in their efforts to promote and sell biodiesel. Diamond Oil has made a commitment to supplying biodiesel to its diverse customer base and has leveraged the Iowa Renewable Fuel Infrastructure Grant Program to support its significant private in6

BIODIESEL MAGAZINE

Phillips 66 and Renewable Energy Group Inc. announced Jan. 21 cancelation of their joint effort to construct a large-scale renewable diesel plant in Ferndale, Washington. The project has been canceled due to permitting delays and uncertainties. Originally announced in fall 2018, the 250 MMgy project would have resulted in the largest renewable diesel refinery on the West Coast. “While we believe the Ferndale refinery is a strategic fit for this renewable diesel project, permitting uncertainties were leading to delays and higher costs,” said Robert Herman, Phillips 66 executive vice president of refining. CJ Warner, CEO of REG, said, “Although we are disappointed in this result, REG is undeterred and continues to develop numerous opportunities to grow our renewable diesel production.”

2020 SPRING EDITION

Maire Tecnimont Group’s NextChem of Italy and Kansas-based Saola Energy have formed a new partnership to license renewable diesel technology to the international market. NextChem will be the licensor of the combined technology and provide clients with EPC services and training. Saola Energy’s patented technology consists of a hydrotreatment step followed by isomerization to produce renewable diesel fuel from fats, oils and greases. The technology can process a wide range of feedstocks at industrial scale. In addition, the process has a “modularized approach” and is possible for capacities as low as 10 MMgy, “making it ideal for both smaller bolt-on facilities with access to a limited supply of captive feedstock and larger standalone plants that can aggregate larger amounts of raw materials,” the company stated.

BUSINESS BRIEFS this project is supported by the American Lung Association, the National Biodiesel Board, the Illinois Soybean Association, and the Missouri Soybean Merchandising Council.

Western Iowa Energy in late 2017. Hartley will also assume the role of biodiesel line of business manager for EcoEngineers.

Landman

Following the success of its first Biodiesel Conversion Centre in St. Lucia, Sandals Resorts International is exploring ways to incorporate biodiesel production and use throughout its resorts across the region. The company’s Dive Centre at Pointe Seraphine has been converting used vegetable oil from kitchens at its three resorts on the island into biodiesel for use in marine vessels. Initiated as a pilot project in 2015 by Maurice Moss, former marine boat maintenance manager who built the processor from spare parts, the facility has since been upgraded. It is now managed by Quentin Landman, who holds Moss’ former post, and technician Sammy Hillman operates the plant, which produces 320 gallons per month and fuels four dive boats and a van. The blended fuel saves the resort 90 cents per liter of diesel. Glycerin is made into soap for kitchen use or to wash marine vessels. Sandals plans to replicate this model on all islands where it and Beaches operate.

Archer Daniels Midland Co. is outfitting five Class 8 trucks with Optimus Technologies’ Vector System, an innovative technology that enables diesel engines to run almost entirely on sustainable biodiesel in a wide range of climates. The trucks will run on B100 produced at ADM’s Mexico, Missouri, plant and be used in daily fleet operations for one year, with each vehicle anticipated to travel up to 180,000 miles. Advanced monitoring protocols will compare the performance and results of the new technology with a control group of five trucks operating on conventional diesel. In addition to ADM and Optimus,

PHOTO: MISSOURI SOYBEAN

PHOTO: SÖDRA

Södra has built the world’s first plant for commercial biomethanol, a sustainable fuel from forest biomass, at its pulp mill in Mönsterås, Sweden. An initial pilot delivery in late February was expected to go to Denmarkbased Emmelev A/S, a large-scale biodiesel producer that will use biomethanol in its fuel production. Södra decided to invest in a biomethanol production facility in 2017. Morten Simonsen, co-owner of Emmelev A/S, said, “Our biodiesel will be 100 percent renewable and based on locally sourced raw materials. Biodiesel produced from Danish canola and Swedish forests can secure fuel supplies for heavy road transport, as well as buses and construction machinery. This will be crucial for a transformation of the energy sector.” Renewable energy consulting firm EcoEngineers has opened a new office in California to capitalize on the need for compliance, auditing and regulatory services in the western carbon markets, where growth in Hartley low-carbon fuels such as biodiesel, renewable diesel and biogas is booming. The California Low Carbon Fuel Standard and other climate-driven programs present opportunities for EcoEngineers to expand its services to the West Coast. To help lead the effort, EcoEngineers has hired Roxby Hartley as a senior regulatory consultant. Hartley spent six years as the director of research and development and more than two years as the director of operations at Agron Bioenergy in Watsonville, California, a biodiesel production firm acquired by

The Missouri Soybean Merchandising Council held a grand opening March 5 for its new Center for Soybean Innovation, which stands to connect developments in soybean innovation with farmers, industry partners and the community. The complex brings together the Missouri Soybean Association and Merchandising Council, Biodiesel Coalition of Missouri, Foundation for Soy Innovation, as well as the administrative functions for farmer-owned biodiesel plants, Missouri Farmers Care and the Ag Education on the Move program. The facility, which serves as a hub for business development and incubation, showcases soy-based building materials and demonstrates new uses for soybeans, from soy-based counter tops, flooring and insulation to turf, asphalt sealant and a biodiesel-fueled heating system. Construction began July 2018. Renewable diesel producer Neste Corp. has agreed to acquire 100 percent of Mahoney Environmental, a collector and recycler of used cooking oil (UCO) in the U.S., and its affiliated entities. The transaction is subject to the fulfillment of customary closing conditions and regulatory approval. Peter Vanacker, president and CEO of Neste, said the move is part of executing Neste’s growth strategy and the acquisition will provide access to a substantial volume of UCO as well as a platform to grow its raw material supply chain in North America. Neste operates biorefineries in Singapore, the Netherlands and Finland. Neste’s Singapore refinery is undergoing a $1.54 billion expansion. Mahoney Environmental’s service includes cooking oil equipment installation and design, fresh oil delivery and grease trap cleaning.

www.BiodieselMagazine.com

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Our Vision for 2020 and Beyond Thank you. Thank you to the biodiesel leaders, champions, advocates and many others who helped our industry find success in 2019. It was a tough year, but we finished very strong. The U.S. biodiesel industry can proudly look back on a year in which we made significant progress toward a more predictable industry.

Donnell Rehagen, CEO, National Biodiesel Board

In January, we had the opportunity to celebrate this success at our annual National Biodiesel Conference & Expo in Tampa, Florida. Our annual conference hosted more than 700 biodiesel producers, distributors, retailers and other industry advocates from across the nation to set their sights on a future for biodiesel that is better, cleaner, and here now! During the conference, the National Biodiesel Board celebrated the many achievements of 2019 and shared our new ambitious vision for the industry, which states: Biodiesel, renewable diesel, and renewable jet fuel will be recognized as mainstream low-carbon fuel options with superior performance and emission characteristics. In on road, off road, air transportation, electricity generation, and home heating applications, use will exceed 6 billion gallons by 2030, eliminating over 35 million metric tons of CO2 equivalent greenhouse gas emissions annually. With advancements in feedstock, use will reach 15 billion gallons by 2050.

BIODIESEL MAGAZINE

2020 SPRING EDITION

Ambitious industries need ambitious goals. And, in our case, our country needs us to be this ambitious. I don’t want to suggest this will be a cake walk. I am extremely bullish on the future of the biodiesel and renewable diesel industry. We will face challenges to reach these goals moving forward … we know that and accept the challenge. Aside from sharing our bold vision, to keep eyes on biodiesel our association put together an enticing schedule with engaging, thought-provoking speakers to offer vital information on the latest in the industry.

Here were some of the key takeaways. The industry took pause to applaud the crowning achievement last year—reinstatement of the biodiesel tax credit, which provided much-needed retroactivity for 2018 and 2019 and a forward-looking credit through 2022. A new tag line—Biodiesel: Better. Cleaner. Now!—was showcased to accompany the long-used biodiesel logo that succinctly emphasizes the benefits of the fuel. New research revealed diesel powertrains are expected to remain a dominant force for years to come, and the use of biodiesel blends in diesel equipment continues to be a preferred choice for fleets looking to improve the sustainability of their operations. The Next Generation Scientists for Biodiesel program extended scholarships to 15 university-level science majors interested in learning about all aspects of the biodiesel industry to attend the conference. Reports from the National Renewable Energy Laboratory proved that biodiesel is of the highest quality. Also, now with our new partnership with NREL, biodiesel fuel quality information is more accessible than ever. NBB recognized five visionaries with the 2020 Eye on Biodiesel awards as ones to watch in the biodiesel

inside

NBB reduce carbon through this viable market. Lastly, the industry shared its plans to fight for a stronger, more reliable Renewable Fuel Standard. In 2020, you will see our organization aggressively claim our space in the RFS and advocate at all levels of the government for rightful recognition of biomass-based diesel in the RFS. We may have a lot on our plate for 2020, but we are prepared to lead the challenge and work alongside our strong and determined industry to advocate for American biodiesel and renewable diesel. Join us in personally participating in these critical efforts and accept the challenge to move and grow America’s advanced biofuel.

industry. Conference goers heard from Bioheat heavy hitters that the oilheat industry is a 7 billion-gallon industry with increasing demand to

Donnell Rehagen CEO National Biodiesel Board

Policy Stability for the Biodiesel Industry During the closing days of December, the National Biodiesel Board achieved a long-sought policy victory—a multiyear extension of the biodiesel tax incentive. The industry began the new year with a sense of certainty and a focus on resolving issues with the Renewable Fuel Standard and small refinery exemptions (SREs). “Renewing the tax incentive was a top priority throughout 2019,” said Kurt Kovarik, NBB vice president of federal affairs. “NBB is grateful to the unified front and collective voice of the industry that helped make this continued growth possible.” NBB united producers, heating oil companies and other associations to emphasize the urgent need for a multiyear extension. NBB organized multiple letters, press events and Capitol Hill visits to highlight the issue. The industry’s leading champion, Sen. Chuck Grassley, R-Iowa, insisted that Congress’ end-of-year spending deal renew the tax incentive. On the House side, Rep. Abby Finkenauer, D-Iowa, led a group of congressmembers to keep the credit renewal front and center for her party’s leaders, Speaker Nancy Pelosi, D-California, and Rep. Richard Neal, D-Massachusetts, House ways and means committee chairman. And Sen. Joni Ernst, R-Iowa, ensured that the White House understood the importance of including the credit in the deal. “On behalf of NBB members, I’d like to thank Sen. Grassley and Rep. Finkenauer as well as many other senators and representatives from both sides of the aisle for their strong and consistent championship of our industry,” Kovarik said. NBB is also urging producers to express their thanks by inviting representatives and senators to visit and tour production plants to see firsthand the success of the policy.

The tax credit is now in place through 2022. The IRS has issued guidance and begun to process claims for the credit for 2018 and 2019, setting an Aug. 11 deadline for submitting those claims. NBB has also secured some policy advances in other areas. Since winning a trade case in 2017, NBB has fought to maintain antidumping and countervailing duty rates on Argentine and Indonesian biodiesel imports. The duties stopped those countries’ unfair trade practices that harmed U.S. producers. While the U.S. Department of Commerce and U.S. Court of International Trade have been reviewing the duty rates, they have kept them in place. The commerce department has been open to evidence from NBB’s Fair Trade Coalition that the rates are still important to prevent a resumption of unfair trade. More recently, USDA and Agriculture Secretary Sonny Perdue followed through on a promise to support infrastructure projects that facilitate higher biofuels blends. This promise was part of the White House’s October deal to mitigate the damage done to biofuel producers and the RFS from SREs. NBB worked to ensure that biodiesel was included in that deal. USDA launched an Ag Innovation Agenda and a Higher Blends Infrastructure Incentive Program that will help boost B20 and higher blends. Starting in May, the HBIIP will make available $100 million in matching grants for infrastructure projects; at least $14 million is intended specifically for biodiesel. NBB continues to coordinate with other biofuel associations to advocate for an end to EPA’s abuse of SREs. The industry’s primary goal for 2020 is to convince EPA to reverse the damage to the program and resume growth in the volumes for biomass-based diesel and advanced biofuels. www.BiodieselMagazine.com

insideNBB

Biodiesel Day Marks Launch of 2020 Vehicle Branding Program The 2020 Vehicle Branding Program kicked-off on National Biodiesel Day March 18, with the theme “Biodiesel: Better, Cleaner, Now!” The national holiday celebrates the anniversary of Rudolf Diesel’s birthday. “When Rudolf invented the diesel engine in the 1890s, it was designed to run on peanut oil, and he envisioned the prominent role plant oils could play in fueling vehicles of the future,” said Kaleb Little, National Biodiesel Board director of communications. “Our industry has come a long way since then and our branding program helps biodiesel users across the country share their stories of sustainability and emissions reductions. Our new tagline, ‘Biodiesel: Better. Cleaner. Now!’ tells the biodiesel story simply. Biodiesel is better and cleaner than petroleum diesel—with proven environmental, health and economic benefits—and is ready to use now, unlike some other alternative fuel technologies that require massive infrastructure or retrofit investments.” NBB encourages biodiesel users to promote their use of biodiesel and share its benefits by applying for matching funds to be used for vehicle branding initiatives that may include wraps, stickers or other innovative efforts. To apply, reach out to Samantha Turner, NBB communications manager, at sturner@biodiesel.org. In 2019, NBB provided matching funds to six biodiesel users. Roslin Enterprises branded 10 tanker trailers with the Hero BX and NBB logos. Its trucks travel a 1,500-mile radius in Canada and the U.S. collecting feedstocks. These feedstocks are delivered to Hero BX where they’re converted into biodiesel. Cape Cod Biofuels, a Massachusetts-based biodiesel producer, wrapped an oil tanker used to transport biodiesel and Bioheat across much of New England from Maine to Connecticut.

The City of Moline, Illinois, branded two refuse haulers that travel throughout the Quad-Cities metropolitan area. The city has used B20 biodiesel in more than 80 diesel vehicles and pieces of equipment since 2005. G&D Integrated, a specialized provider of transportation and logistics services based in Morton, Illinois, and an inaugural member of the Illinois B20 Club, wrapped two 53-foot box trailers. G&D operates more than 400 vehicles on blends up to B20 year-round. CityLink, Greater Peoria Mass Transit District wrapped one transit and two paratransit buses that operate in Peoria and Tazewell Counties. The agency has used B20 in more than 50 transit buses and 20 paratransit buses year-round since 2009. Al Warren Oil Co. wrapped a box truck that makes deliveries to customers throughout the greater Chicagoland area and northwest Indiana. Al Warren provides biodiesel blends to its diverse customer base and powers its Illinois-based fleet of more than 70 diesel vehicles on blends up to B20.

Creating Connections and Conversations Coast to Coast It’s already been a busy 2020 for the National Biodiesel Board— a time of travel, relationship building, and extending the conversation about biodiesel and renewable diesel to a wide array of audiences across the country. Trade shows and conferences are in full swing, with industry professionals pouring in to talk about what the future has in store. With all the industry events taking place nationwide, members can be sure trade association staff is on the move representing biodiesel, one conversation at a time. Through sponsorships, expo booths, and a variety of speaking engagements, the National Biodiesel Board has ensured that biodiesel messages get heard by key audiences. This spring, key leaders in the industry represented biodiesel at United Soybean Board meetings, Commodity Classic, Climate Leadership Conference, the National Association of Fleet Administrators Institute & Expo, the National Association of Farm Broadcasters Washington Watch, Advanced Bioeconomy Leadership Conference, Advancing Renewables in the Midwest, the Advanced Clean Transportation Expo, and much more. “Trade association staffers have their boots on the ground at these meetings providing industry updates and showcasing NBB’s new vision with the goal to reach 6 billion gallons of biodiesel and renewable diesel With these meaningful face-to-face interactions, NBB is showing by 2030,” said NBB CEO Donnell Rehagen. “The NBB executive team is committed to working closely with all members and partners to make how biodiesel is providing benefits and highlighting just how biodiesel is Better. Cleaner. Now! this goal a reality as biodiesel continues to grow.”

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Eye on Biodiesel Winners Showcase an Image of Success The National Biodiesel Board’s annual awards recognize a diverse group of individuals and organizations making significant contributions to biodiesel. From long-time champions to present-day breakthroughs, the commercial biodiesel industry wouldn’t be where it is today without these individuals and organizations. NBB recognized the 2020 “Eye on Biodiesel” award winners throughout the National Biodiesel Conference & Expo: • Northeast Heating Coalition—Industry Partnership Award. • Wallace E. Tyner, Agricultural Economist, Purdue University— Erker Steve Larsen, Ruan Bohuslavsky Pioneer Award. • Mike Erker, United Soybean Board, Director of Bio-Based Products—Impact Award. To find out more about the outstanding 2020 winners, visit blog.bio• Ruan Transportation Management Systems—Initiative Award. dieselconference.org or check out the recent press releases on nbb.org. • Victor Bohuslavsky, Executive Director, Nebraska Soybean Board—Inspiration Award.

NBB Celebrates ASA’s 100th Anniversary The National Biodiesel Board applauds and celebrates the American Soybean Association’s century of growth, advocacy and dedication to America’s soybean farmers and the agricultural industry. Through ASA’s grassroots initiatives, the entire soybean complex has been given a voice to strengthen all value chains. “One hundred years is such a milestone,” said Doug Whitehead, NBB’s chief operating officer. “One hundred years says strength and success. Experience matters and ASA clearly has it.” To commemorate this 100th anniversary, the biodiesel industry wants to especially extend its thanks to ASA for taking a chance on this sustainable initiative. “We wouldn’t have had a chance without ASA and the soybean sector saying, ‘Let’s get this done,’” said Whitehead. “Without ASA, the 26 affiliated state associations representing 30 soybean-producing states, and the more than 300,000 individual soybean farmers those groups count as members, the biodiesel industry wouldn’t have near the national policy success we’ve enjoyed to date.” In the early 1990s, soybean farmers had an idea on how to utilize the influx of soybean oil and created a value-added product for producers and consumers—biodiesel. At the time, these farmers had an idea without a

product, but they knew they wanted to be innovative and good stewards of their business leaving no asset stranded. This idea blossomed into the formation of a national trade association—the National Biodiesel Board. ASA has been monumental in helping the soybean and biodiesel industries grow through critical legislation. ASA represents the biodiesel industry in Washington, D.C., and walks the halls of Congress to the benefit of biodiesel producers and U.S. farmers. “The leadership and grassroots muscle ASA brings to the table was critical in getting the biodiesel tax incentive and Renewable Fuel Standard implemented and defended over the years,” said Tom Verry, NBB’s director of outreach and development. “ASA has embraced biodiesel as a priority, which has helped guide us to where we are today at nearly 3 billion gallons, and to where we will be in the future.” For more on ASA’s history visit soygrowers.com.

Biodiesel Fuel Quality More Accessible Than Ever Biodiesel fuel quality information is more accessible than ever thanks to new reports being published from the National Renewable Energy Laboratory. Through funding and support from the National Biodiesel Board, NREL’s statistical analysis is based on thousands of data points previously unavailable. “Never before has NREL been able to provide this level of fuel quality information,” said Teresa Alleman, senior fuel chemist for NREL. “By partnering with NBB’s National Biodiesel Accreditation Commission, BQ-9000, we now have a simpler, more efficient way to collect, analyze and determine the quality of biodiesel. These reports will act as a recurring insight into biodiesel fuel quality each year.” The reports are comprised of data gathered from U.S. and Canadian BQ-9000 producer members. The analysis from both the 2017 and 2018 reports show that the vast majority of biodiesel readily exceeded the performance specification limits in ASTM D6751, the standard for biodiesel. “These reports show what we’ve been saying for years,” said Scott Fenwick, NBB technical director. “Biodiesel fuel is of the absolute highest quality, and these reports prove it. Having this data every year will go a long way in

demonstrating to OEMs and regulatory agencies that biodiesel should be the fuel of choice for any diesel engine.” As part of the data-gathering process (and under BQ-9000 requirements), biodiesel producers have their own B100 fuel analyzed against the full specifications at the point of production, then provide the NBAC with the resulting data. NBAC randomizes and anonymizes the results and provides the final version to NREL for statistical analysis. BQ-9000 is a voluntary program for the accreditation of producers, marketers, laboratories and retailers of biodiesel fuel. It is a unique combination of ASTM D6751 and a quality systems program that includes storage, sampling, testing, blending, shipping, distribution, and fuel management practices. To receive accreditation, companies must pass a rigorous review and inspection of their quality management processes by an independent auditor while participating in annual audits and meeting the additional requirements under the program. www.BiodieselMagazine.com

20+ years focused on Multi-Feedstock BioDiesel technology Optimization and modernization of existing plants Creation of added value from waste fats, oils and greases BioDiesel Multi-Feedstock technology from the market leader

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PreTreatment Know-how in all types of feedstock for the Renewable Diesel industry

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EVOLUTION Technology providers have adapted their pretreatment offerings as the biodiesel industry evolved to rely on waste feedstocks, and as renewable diesel emerges BY RON KOTRBA

Drying unit for pretreatment system IMAGE: BDI-BIOENERGY INTERNATIONAL

Pretreatment washing and separation IMAGE: BDI-BIOENERGY INTERNATIONAL

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PRETREATMENT It’s no secret that global biodiesel production got its start nearly 30 years ago with virgin vegetable oils—rapeseed oil in Europe and soybean oil in the U.S. “A lot of

early biodiesel plants were put on the backend of crush facilities, and biodiesel wasn’t steering the ship,” says Alex Slichter, global commercial director at Crown Iron Works, one of the early market entrants in biodiesel process design and longtime oilseed process technology provider. Jim Willits, former president of Desmet Ballestra North America, another oilseed processing pioneer and early competitor in the biodiesel design space, says, “If you bought refined, bleached and deodorized soybean oil, there really isn’t any pretreatment necessary. The early concept of biodiesel plants was simple.” Markus Dielacher, CEO of BDI-BioEnergy International, says many companies offering pretreatment systems came from the vegetable oil side. “They started with clean feedstock and it worked,” he says. “We came from the other side, the worst feedstocks, and went to the cleaner ones. It’s important if you’re working with heavily impure feedstock to have a robust system, as most don’t work properly with this type of feedstock. For instance, you can use a degumming unit for pretreating the worst feedstock, but it clogs up [quickly] and then doesn’t work. So, you need more robust systems, different kinds of separation units, and further steps in front to pretreat.” The evolution of the biodiesel industry to rely more on waste fats, oils and greases was largely an economic consideration, as feedstock costs can represent 80 percent of operational expenses for production, and regulation driven as governments around the world tie regulations to carbon intensity and sustainability. “Biodiesel was an extension of the soy processing industry and evolved into more of a standalone business that had to survive by processing feedstocks that were competitive in price and availability,” Willits says. Not all biofuels are created equal, from both monetary and sustainability points of view, Slichter says. “With more waste oils being used, instead of just neutralizing [free fatty acids (FFA)] and making soap, producers today are being more diligent in separating contaminants like FFA, and they’re doing

more physical than chemical refining,” he says. In Crown’s early days, pretreatment for soy biodiesel plants employed chemical neutralization and an adsorbent step to remove soaps. “That’s still the situation today for soy plants,” says Kris Knudson, vice president of global marketing and sales for Crown. “That was valid then, and it’s valid now, but we’ve made some enhancements on the pretreatment side by using enzymes and acid degumming—different techniques in the refining step from our portfolio. In the past 10 or 12 years, as animal fats, palm [distillates] and higher FFA feedstocks crept into the marketplace, we’ve employed different technologies from our toolbox, such as deacidification columns vs. traditional neutralization, working with our customers as the market evolves.” Christine Riedl, technical sales manager at BDI, says when “second-generation” feedstock first appeared on the market, the used cooking oil (UCO) and animal fats were higher quality than what’s available today, so pretreatment demands were not huge. “But as lower-quality feedstock was being introduced into systems,” she says, “pretreatment requirements increased as higher amounts of impurities were coming in with that.” Pretreated feedstocks need to meet very strict specifications, not exceeding a few parts per million for phosphorus, alkali metals, chlorine and other contaminants. “Reaching these strict specifications is particularly difficult for cheaper, lower-quality feedstock such as acid oils, certain animal fats and side streams such as distillates and distillation pitches,” Willits says. The key for biodiesel and renewable diesel pretreatment technology providers, Willits says, is knowing the sensitivity of both biodiesel and renewable diesel to the contaminants in the feedstock, and knowing the constituents or analytical makeup of those alternative feedstocks. Martin Ernst, head of biofuels R&D for BDI, says as reliance on waste feedstock with greater impurities grows, the more important feedstock analytics become. “The more varieties of feedstock you have, the more analytic information is necessary,” Ernst says. “But these analytical methods must be pretty easy and fast to keep up with the logistics of the biodiesel process, where you’re pulling in multiple truckloads

a day.” He adds that feedstock categorization is critical, and the quality parameters identified from that categorization will determine which pretreatment steps are necessary. Dielacher adds that the analytical results will then determine which pretreatment steps to run, and which recipe should be followed. Because of BDI’s history with waste feedstock, Ernst says the company has long been aware of polyethylene in animal fats introduced from packaging, ear tags and other means like plastic bags used to separate brains and internal organs from meat, which has become a growing problem over the years. “We developed a patented pretreatment system to remove this, which we are now offering now to customers,” Ernst says. The “usual approach” of filtration does not produce reliable results, he adds. “Our approach involves a pre-unit that accumulates polyethylene using heat and a filter aid,” he says. The polyethylene particles attach themselves to the filter media. The process then employs a centrifuge and tricanter to remove the solid particles. “The fine, small particles we get out with our fat treatment unit,” Ernst says. “We do water extraction for FFA and can use existing equipment.” He says the polyethylene removal module is installed at the beginning of pretreatment and a majority of the contaminants are removed in subsequent steps. BDI patented this two years ago. Riedl says although many different separators and suppliers exist, BDI has relied on Flottweg for years. “We’ve been working with them for more than 10 years,” she says. “They provide the best machines for what we need, which is a big advantage from our side. Their machines are stable, robust and reliable for pretreatment.” While virgin vegetable oil feedstocks have minor variations from year to year, this variation pales in comparison to variations in animal fats or UCO. “When you get into animal fats and UCO, there’s a great difference in quality and thus those nontriglyceride items (i.e., contaminants) as a result of the processing,” Willits says. “If they were frying onions, there can be a high amount of sulfur, so you have to look at this coming in batch to batch and judge what you can handle.” Sulfur Ernst says in the case of sulfur, BDI switched its focus from pretreatment to the backend. “We looked well into sulfur rewww.BiodieselMagazine.com

Wilson, left, and Cairncross PHOTO: ENVIRONMENTAL FUEL RESEARCH

moval in pretreatment systems, but there the removal capacity is limited,” he says. “There are two kinds of sulfur, organic and inorganic, and for organic sulfur bound to fatty acids, there’s really no good removal in a pretreatment system—adsorbents maybe, but with some waste materials the sulfur content is so high you can only remove so much on the frontend. This is why we employ a special distillation unit optimized for sulfur removal.” Standard distillation can handle up to 100 parts per million (ppm) of sulfur in feedstock, or in the biodiesel before distillation, Riedl says. “But we also implement an additional sulfur removal unit that allows up to 150 to 170 ppm of sulfur in biodiesel.” Even with higher amounts of sulfur, this additional unit means the fuel can still meet ultra-low sulfur requirements of 10 or 15 ppm, depending on the region. A startup company named Environmental Fuel Research LLC is working to prove out its polarity-based desulfurization process that leverages a specific type of adsorbent and a process developed by Rich Cairncross, EFR senior research engineer and associate professor at Drexel University. “Our technology is more than an adsorbent,” Cairncross says. “That can be purchased from a variety of manufacturers. There are really tight specifications on what the adsorbent has to look like, pertaining to its physi16

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cal properties and in terms of how it’s used. So, we’re not in the business of selling anything, but supplying customers all they need to know to effectively remove sulfur, which includes specs for the adsorbent, conditions under which it’s used, and the ability to regenerate the adsorbent to reduce costs.” Don Wilson, EFR technical director, says he and Cairncross have investigated both frontend and backend sulfur removal with their technology. “It does work on both, although during biodiesel conversion, some level of desulfurization happens on its own,” Wilson says. “Since this process is probably not as inexpensive as some might like, it is best saved for the end when sulfur levels are at their lowest level.” Wilson explains that EFR investigated many forms of distillation, and while many did significantly lower sulfur levels, EFR’s adsorbent-based approach outperformed each of them. Although most of EFR’s work in desulfurization has focused on purifying biodiesel rather than feedstock, one particular project did focus on feedstock pretreatment. “There, we were dealing with trap grease and other forms of brown grease, purifying the FFA out of dirty feedstocks to maximize yield,” Cairncross says. “We hydrolyzed and then did purification and adsorption, and we were successful in getting sulfur content that met specification in the feedstock. But this is more difficult to do on FFA than on

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biodiesel. It’s harder to meet spec.” Wilson says while he would call EFR’s approach a polishing step instead of pretreatment, he wouldn’t rule it out as purification for feedstock. “There are potential applications for people who are collecting grease that may want to desulfurize it for end users,” he says. “Then they could charge more.” The preferred adsorbent for EFR’s polarity-based desulfurization technology is silica. “But it comes down to the physical properties,” Wilson says. “There’s as many different flavors of silica out there as bottled water. Specific grades work better than others. And there are others that work better for what we’re assuming our different species of sulfur are. We’re still working on confirming the effects of speciation and we’re hoping to have data this summer. We do know different adsorbents tend to desulfurize better based on feedstock—silica works well generally, but adsorbents made of different materials may work better on poultry grease, for instance.” EFR has developed a technoeconomic model, and although the expense of deploying the system is influenced by electricity, labor and input costs, a penny per ppm per gallon “would put them in the ballpark,” Wilson says. “Our focus has been if someone wants to use the dirtiest of the dirty feedstocks, distill it first, and while that alone won’t get them to 15 ppm, then use our process to go from 25 or 30 ppm sulfur to below 15 ppm.” The key to all this is, Willits says, is about having the ability to understand what kind of impurities are in the feedstock, and what can be taken out. “But you also need to understand the feedstock and purchasing program, and your ability to blend stocks,” he says. “If you buy and process, buy and process, then there’s big limitations. So, one of the major keys is the ability to blend oils available to you. Sometimes the only solution is dilution—mixing high- and low-contaminant feedstock and then processing that through the plant. That can be done on the frontend. My preference is blending feedstock and pretreatment, based on known quantities through analyzing what’s in your tank. The other way is producing biodiesel and then blending down to necessary levels. Either way, you need to know the quality and parameters in the feedstock or finished product to accomplish this. To handle wide swings in feedstock, blending is an analytical ability of

PRETREATMENT determining what’s in your tanks and then what blend will produce the best yield going through the pretreatment operation.” If the feedstock is extremely bad, this may require running product through the pretreatment system twice, Willits says. “Or a high concentration of chemicals or slowing the plant down so you can process the material,” he explains. “All are expensive things to do. The key is, if you don’t have the ability to blend stocks, and if you’re tied to buying all your oil from a select number of suppliers, then work with them to balance what’s coming in. If you can’t, then as your feedstock comes in, you need a full analysis to determine what adjustments you have to make to process it. This makes it much more difficult, however, and there’s a higher opportunity for failure.”

soy, and we’re doing enzymatic degumming there,” Harrington says. “That’s sort of the latest, greatest technology in terms of pretreatment on soy oil. Then there’s a separate line for waste fats, which utilizes high temperature deacidification to physically remove the FFAs.” Harrington says prior to deacidification, there is an acid degumming step to remove the bulk of the phospholipids, followed by a water wash. Cavitation may also be employed in pretreatment. “Cavitation is an up-and-coming technology,” Harrington says, “but it has a niche application depending on the feedstock, so lab tests will prove whether cavitation is effective to run on certain feedstocks. In layman’s terms, cavitation is a blender on steroids.” Slichter says the differentiation in Crown’s pretreatment design is feedstock State of the Art flexibility vs. employing brand new techCrown’s most sophisticated biodiesel nologies. “We build in robustness,” he says. pretreatment system, according to Patrick “So, 50/50 actually means 25/75.” He says Harrington, Crown’s global technology lead Crown can design a pretreatment system to for renewable diesel, was designed for a handle the worst-case scenario, “but there multifeedstock biodiesel plant whose pro- are capital implications there as well,” SlichWWS-TRADING-ARTWORK-OL.pdf 10-03-2019 11:47:15 duction lines are dedicated to 1processing terAMsays. different feedstocks. “One is dedicated to

Willits details Desmet Ballestra’s stateof-the-art biodiesel pretreatment. When a truckload arrives, the first step is to make sure it contains minimal particulate matter. “We’ve become more sophisticated using filtration and cleaning the material up from the big things—the bricks, bats and dead rats,” he jokes. “Once unloaded and the large material is taken out, we’ve gone from an old bag in the tank filters or metal screens to automated filters that clean themselves and return dirty materials back to a place they can be utilized. The next issue is whether we have to worry about polyethylene. If it’s melted, we use cooling and a filtration process to remove the plastic.” Next is removal of phospholipids, or phosphorus-bearing materials in the oil. “There are hydratable and nonhydratable,” Willits says, “so we acid pretreat to make all phospholipids hydratable. Then we degum. To separate the oil and water mixture, we use a centrifuge to remove water from the oil portion. If it’s been acid pretreated, all those products have been turned into hydratables, which greatly reduces phosphorous in the oil. Along with the gums, this will take out other contaminants and it’ll [reduce] the met-

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PRETREATMENT als content. Since we used acid in degumming, now we have to neutralize the acid, so we mix in caustic to remove. Depending on what we’re trying to do, if we’re taking the FFA out, we can add additional caustic to transform the FFA into soaps and remove them in a water wash.” Bleaching comes next using bentonite clay treated with acid, dried and mixed with oil, heated up, agitated for 20 to 30 minutes and then filtered out. “This takes the trace phosphorus and soaps out,” Willits says, “but there’s still water left in the oil so then it’s dried under a vacuum flash to take the moisture off.” If waxes from distillers corn oil, for instance, must be removed, then the dried oil is cooled, allowing the wax to crystalize, and then they’re filtered out. “This will improve the quality of the finished product so it will pass the [Cold Soak Filtration Test],” Willits says. “Then, depending on the sulfur content, if we need to strip sulfur out, we’ll run it through vacuum distillation to strip the material off.” He adds that this approach is “a much more robust system than what we’ve had to supply in the past for soy oil. It’s not simple, but it gives you much more control over feedstock variability.”

“State of the art” is developed through what’s been learned over time. Depending on the kinds of impurities, BDI can employ several combinations of processing steps in pretreatment—washing extractions, separation techniques, solids removal, filtrations, adsorptions, bleaching. “We utilize any and all pretreatment steps that are either available on the market, or which we have developed specifically for our pretreatment systems,” Riedl says. “The big advantage is we develop a pretreatment concept according to requirements of the existing biodiesel process and of the customer’s requirements. Usually the customer will come to us and say, ‘I want to use this or that with these impurities, so how can you install the most efficient pretreatment system for the parameters of my plant and feedstock?’ With more than 20 years of experience in waste materials and different technologies available, we will find the best, most cost-effective combination to provide them a reasonable and working solution for what they need.” Dielacher reiterates the importance of cost efficiency. “Process yields, how much chemicals or energy is needed to treat, output—we have optimized these steps to lose as little feedstock in pretreat-

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ment as possible,” he says. “If we put a pretreatment unit in front of a biodiesel process not designed by us, then we’ll adjust the pretreatment according to the needs of the customer.” Ernst emphasizes that, for pretreatment, there is no “one size fits all.” Like any reputable technology provider, Willits says Desmet Ballestra has made modifications to its processes over time to go in wider directions. “We’ve had to improve mixing of our oils and chemistries, and we’ve leveraged nanotechnology to try and get better, more complete reactions,” he says. “There’s been a lot of tweaking to the process, but also a lot of research done on feedstocks. When we first got into biodiesel, and then into renewable diesel, we gathered hundreds of samples of potential feedstock, ran them through our analytics lab and pilot plant to try and understand what we can do to help our customers deal with these. We learned a lot along the way and maintained that learning. It’s as much now the counseling of our potential customer to what they need to know of those feedstocks and the effect on their finished product as it is the technology or state of the industry. We’re still applying chemistry. The physics don’t

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PRETREATMENT change. But how those feedstocks change, and the chemistry we can control applied to those feedstocks, that’s where we’ve grown.” Renewable Diesel As renewable diesel interest and project development picked up, tech providers that have historically serviced biodiesel producers are adapting to capture new market share. Crown created a dedicated renewable diesel team, which Harrington leads. Given that many renewable diesel players are petrochemical refiners, the industry and, as an offshoot, its pretreatment systems must be more familiar to the energy sector and less tied to agriculture, Slichter says. “We continue to evolve pretreatment to look less like a legacy [soy oil or biodiesel] refinery and more like a petrochemical refinery,” he says. “We need to integrate these onsite, using new technologies and innovate without the legacy burden.” For renewable diesel pretreatment, technology providers must ask questions such as, “How can I get out phospholipids if I don’t care about the color of the oil or its impact on flavor?” Slichter says Crown’s approach, in the hierarchy of pretreatment refining rigor, has bio-

Early this year, Crown unveiled its new pretreatment system for renewable diesel, which can double the life of expensive hydrotreater catalysts. PHOTO: CROWN IRON WORKS

diesel at the bottom, meaning the least rigor, followed by edible oil and then renewable diesel requiring the most processing. “For renewable diesel, we’re talking about less than 1 ppm on a number of contaminants,” Slichter says, adding that hydrotreating catalysts used in renewable diesel production are expensive and sensitive to impurities—particularly metals and polyethylene.

Crown’s renewable diesel pretreatment technology consists of four standard operations, which Slichter says can be mixed and matched as needed. The first step is a proprietary process for removing polyethylene. “In tallow, that’s a problem,” he says. “This can be an instantaneous problem and cause a catastrophic shutdown.” Since polyethylene can be fat soluble at moderate temperatures,

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PRETREATMENT

IMAGE: CROWN IRON WORKS

Slichter says Crown has designed a system to take out larger impurities as well as polyethylene. “We do this upfront,” he says. “Others may do this on the back end in bleaching, but bleaching clay can be expensive for solids.” The second step is a degumming and acid wash step. “First, we take out the gums, proteins—anything that’s complex or creating miscibles that can be shielding ions or contaminants that have an affinity to be removed with water, so we create a pH change to coax those molecules out. This is a good place to lose FFAs if you’re not careful, if you’re not controlling pH.” He says Crown’s design is intended to not routinely need any caustic. One significant difference between biodiesel and renewable diesel pretreatment approaches is FFAs in biodiesel feedstock must be removed before conventional caustic processing or they’ll turn to soap, but for renewable diesel, “it’s just another source of carbon,” Willits says. Slichter adds that since the hydrotreater converts FFAs to yield in renewable diesel processing, pretreatment approaches have to be gentle “because FFAs are the first thing to be lost in a waste stream, if a continuous pretreatment system is not designed properly to minimize losses. It’s not uncommon to see a 10 percent FFA loss in pretreatment,” he says, if the design doesn’t take this into account. The third step in Crown’s renewable diesel pretreatment approach is a water wash, and then the material is ready for the fourth and final treatment: a two-stage bleaching process. “Bleaching clay can be a major operating expense, and disposal can be a major pain for petrochemical companies that are not used to dealing with it,” Slichter says. “They know stack gases, flare off and wastewater, but there’s not a lot of solid waste generated at a refinery, so the idea of having a dumpster a day of bleaching clay coming out of the plant is a major concern. So, we’ve 20

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maximized the efficiency of our bleaching system.” With polyethylene removal upfront, Crown can elevate the temperature of the feedstock during the bleaching process to perform a true double-pass to maximize time. “And there’s the option to use two types of adsorbents,” Slichter says. “Some just add bleaching clay twice,” but silica, cellulose or other filter aids could be used to bring contaminant levels from less than 5 ppm down to 1 ppm. Harrington says Crown has worked with many adsorbent suppliers to get specific adsorbents into the renewable diesel market. Besides robustness, Slichter says the other phrase Crown uses for its pretreatment system is “future-proof.” Regulations will change, and questions will arise that no one knows or has the answers to yet. “They may be putting more investment up front,” Knudson says, “but they’ll spend less in the long run on solid disposal from adsorbents, for instance. This ‘future-proof ’ design gives us and our customers the flexibility to test new adsorbents and optimize the system going forward. We listen to the market, watch it evolve, and listen to the mindset of our customer.” While sulfur is a concern in feedstock for biodiesel, experts say it’s not much of one for the petroleum companies moving into renewable diesel since they have long known how to manage sulfur. “Petroleum companies have been dealing with sulfur ever since they began processing petroleum,” Willits says. For renewable diesel, the primary contaminants, according to Slichter, are phosphorous, metals, chloride, and polyethylene. “Sulfur would be considered a second-tier contaminant,” he says. “We’ve worked closely with hydrotreater technology licensors and it’s on their radar but it’s not driving the bus, so to speak.” Desmet Ballestra designed the pretreatment process for Diamond Green Diesel’s

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renewable diesel plant in Louisiana. “The renewable diesel pretreatment process has to be focused on metals removal whereas with biodiesel, if you’ve taken out phosphorous, you’ve gone a long way to getting there,” Willits says. Shortly after designing and installing Diamond Green Diesel’s original pretreatment unit, the company expanded and relied on Desmet Ballestra again to double its pretreatment process line. The plant is currently expanding yet again, building a duplicate plant next door, and it called on Desmet Ballestra for even more work. “There’s other opportunities for future expansion with them, and others,” Willits says, intimating Diamond Green Diesel’s investigation of another large-scale renewable diesel plant in Port Arthur, Texas, may also contract Desmet Ballestra for pretreatment. BDI is also making its nearly 25-year history and vast experience pretreating waste feedstocks for the biodiesel industry available to the renewable diesel sector. “Renewable diesel certainly needs even more pretreatment steps,” Dielacher says. “But our experience comes from cleaning up the worst feedstocks, so it’s easier for us to clean them up and produce a cleaner feedstock with lower impurities of metals. This is something we can do by adding further pretreatment steps.” Dielacher adds that BDI has been working intensively with catalyst producers to better understand what they need. “We have the experience to jump into this field and fill a gap,” he says. “Renewable diesel producers do not have much knowledge of pretreatment, so they need someone who can run the unit afterwards.” Author: Ron Kotrba Editor in Chief, Biodiesel Magazine 218-745-8347 rkotrba@bbiinternational.com

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FEEDSTOCK

Opportunity

Knocking

BioEconomy Solutions plans to create 200 jobs in South Carolina through operation of a new crush facility while commercializing a little-known crop for the biomass-based diesel industry BY RON KOTRBA

Most people in the U.S. have probably never heard of cyperus esculentus, but Victor Garlington, managing partner at BioEconomy Solutions, believes it is the next big thing in biomass-based diesel feedstock. The company has grand plans for this obscure crop, including a signed 10-year offtake contract for 120,000 metric tons (36 million gallons) of oil annually with an overseas buyer and, eventually, small-scale renewable diesel production. But to fulfill this, BioEconomy Solutions must educate farmers, get them onboard to grow the crop, build out crush capacity and install a hydrotreating unit.

Cyperus esculentus, also referred to as tiger nut or earth almond among other names, is a relatively obscure, oil-rich tuber familiar mainly to foodies and turkey hunters in the U.S.

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FEEDSTOCK

Cyperus esculentus goes by many names—chufa sedge, nut grass, yellow nutsedge, tiger nutsedge, edible galingale, water grass and earth almond, to name the more popular ones. Unlike many crop-based feedstocks used for biodiesel or renewable diesel production, cyperus esculentus is not an oilseed. Rather, the crop is valued for its edible, oil-rich tubers, sometimes called tiger nuts. “Ninety-nine percent of the population has never heard of it, especially in the venture capital realm,” Garlington says. “Farmers in the Southeast who farm and hunt turkeys and food nuts, or ‘foodies,’ are the only people I found with any working knowledge of what I’m talking about.” He says this is one of the reasons that makes investing in cyperus esculentus so great—it’s an opportunity to get in on the ground level, so to speak. “Soy and corn are established markets,” Garlington says. “This is something no one has looked at [in the U.S.] since the late 1800s or early 1900s as a commercial crop. In other places like Spain or countries in Africa, it’s a commodity used as food, or a replacement for milk.” Garlington says BioEconomy Solutions is focusing on cyperus esculentus for a couple of key reasons. One, the tubers contain about 25 percent oil—a relatively high oil content compared to, for example, soybeans, which typically contain less than 20 percent oil. The second reason involves the type of oil. “The cold flow properties are excellent for the EU climate and does not require further additives, which increase final product cost,” he says. Furthermore, he says cyperus esculentus can be commercially planted, harvested and processed with existing implements and machinery. “No special equipment is needed,” Garlington says. “We are using readily available equipment in the marketplace currently.” For years, Garlington has been the director of client services for 70centsagallon. com, a provider of small-scale biodiesel processing equipment. When asked why he started this new venture—BioEconomy Solutions—he says, “Since the early frontier days of biodiesel processing, it’s been all about the feedstock. Even in 2006, biodiesel was great until the price of feedstock went up. I said, ‘Wow, why not become a player in the oil business?’ Not petroleum oil, but the oil that grows on top of the ground vs. oil being pumped from underground. This 24

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took us down the rabbit hole of food vs. fuel. We were players in growing alternative mustards on the West Coast, camelina, but then the bottom fell out of the industry and interest went out. Two years ago, we saw the writing on the wall, especially in the EU. We had chance to travel to Turkey and England, and soon I realized everyone outside of the U.S. was far more [worse off] than we are, paying so much more than us for fuel. That drives action. On the West Coast, diesel was $5 a gallon. Again, that drives action. That’s what I feel is driving our business, proven by our long-term offtake agreement [with a buyer in the U.K.]. With the pain they’re going through in Europe today, and government mandates up from 5 to 7 to 10 percent blends, IMO 2020, the ban on palm oil—all these things are converging to make a boom for biofuels again. Maybe not so much here in America, but abroad. We’re thankful to have the $1 per gallon tax credit again here in the U.S., but there’s nowhere near the demand here compared to the EU. Most of the equipment that we at 70centsagallon.com have sold has been somewhere else—not here.” In February, Carolina Opportunity Funds announced that its first IMPACT Carolina Fund investment—a qualified opportunity fund (QOF) designed to provide seed and early-stage financing to qualified opportunity zone businesses located in North and South Carolina—was being provided to BioEconomy Solutions for its planned cyperus esculentus crush facility and subsequent renewable diesel plant in Georgetown, South Carolina. An opportunity zone is a designation created by the Tax Cuts and Jobs Act of 2017 allowing for certain investments in lower income areas to have tax advantages. A QOF is an investment vehicle set up as either a partnership or corporation for investing in eligible property that is located in an opportunity zone and utilizes the investor’s gains from a prior investment for funding the QOF. The Opportunity Zone Initiative, included in the 2017 tax reform bill, was proposed by U.S. Sens. Tim Scott, R-South Carolina; Cory Booker, D-New Jersey; and Rep. Ron Kind, D-Wisconsin. After Carolina Opportunity Funds announced its support for BioEconomy Solutions, Sen. Scott gave the company and Carolina Opportunity Funds a shout-out on Twitter by tweeting: “#OpportunityZones

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doing work in Georgetown – hundreds of jobs on the way!” Hannah Kirby, managing partner of Carolina Opportunity Funds, says, “BioEconomy Solutions’ decision to locate an advanced [renewable diesel] processing plant within an economically disadvantaged opportunity zone represents the spirit of the Opportunity Zone Initiative. The vast majority of opportunity zones within the Carolinas are in rural communities and the BioEconomy Solutions project will provide measurable economic growth to the region. Not only do investments in qualified opportunity zones provide tax incentives, but companies like BioEconomy Solutions are on the cusp of a new wave of agribusiness technologies that will drive the future growth of the industry.” The amount Carolina Opportunity Funds is investing in BioEconomy Solutions is confidential, Garlington says. But it is still raising additional funds with a total goal of $20 million. In return, Carolina Opportunity Funds receives a management fee “not unlike a hedge fund,” Garlington says. With the investment, Garlington says BioEconomy Solutions will establish grow contracts with area farmers and complete the oil processing plant. BioEconomy Solutions’ business plan is laid out in two phases. The first phase is educating farmers and establishing grow contracts, building a large-scale crush facility and supplying oil. “Our goal for Phase 1,” Garlington says, “is to supply our offtake agreement by the fourth quarter [of this year]. In 2021, the plan is to increase our oilseed processing capabilities along with educating farmers on our oilseed crop.” While Garlington will not say how many farmers BioEconomy Solutions has contracted now to grow cyperus esculentus, he says the plan is to grow the crop on 27,000 acres in the Carolinas down to Florida. “When it’s cold in North Carolina, they’re harvesting tomatoes in Florida,” he says. “But the processing plant, where the bulk of the employment is, will be in Georgetown, South Carolina.” Thus far, the company has been crushing tiger nutsedge through toll contracting via mechanical cold-pressing. To fulfill the large offtake contract of 36 million gallons a year, however, with a buyer whose name Garlington will not disclose, construction and completion of a large-scale crush facility must ensue. He says the company anticipates

Garlington

BioEconomy Solutions is planning to grow cyperus esculentus on 27,000 acres. PHOTO: BIOECONOMY SOLUTIONS

starting construction of the crush plant in the second quarter of this year, adding that it can be completed in as little as 90 days. Garlington says the plant will use Komet Vegetable Oil Expellers manufactured by IBG Monforts. He says while the company is making smaller deliveries of chufa oil in ISO tanks today, he expects to be producing 3 million gallons a month by the end of the year, with high-volume bulk shipment deliveries across the Northern Atlantic Ocean by second quarter 2021. The second phase of BioEconomy Solutions’ business plan is to construct and operate a 5 MMgy renewable diesel production facility in Georgetown, South Carolina, near the cyperus esculentus crush facility. Garlington says the company is currently in negotiations with technology providers, but no decisions on renewable diesel process technology have been made yet. “We want to add a 5 million-gallon hydrotreating renewable diesel production facility to focus on the marine, rail, and over-the-road diesel markets,” he says. “We’ve been talking to folks in the marine industry, ship owners in Canada and Europe. With IMO 2020, the need for [low-

sulfur marine fuel] is tremendous, and they don’t know how to fill that gap. Once we get a good baseline proof of concept, and offtakes with those operators, we can expand. We’ve got plenty of land in Georgetown, not to mention there’s people there from other industries—the pulp and paper and steel industries—to employ.” Garlington emphasizes that movement on the renewable diesel production facility won’t occur until 2022. “What’s going on in the next 12 to 18 months,” he says, “is we’re talking with people in Georgetown, training farmers and employees. One of the things that’s so important to us is jobs, jobs, jobs. If you look at that region, it’s had lots of ups and downs with the local paper and steel mills. There are two military bases, and my partner and I are prior military, so we intend to employ veterans and those who worked in the declining paper and steel industries. We’re creating jobs in renewable energy.” Operation of the crush facility alone, along with movement of whole tiger nutsedge in and shipment of oil and meal out, will create 200 jobs. “We’re not hiring farmers directly, so those 200 jobs are just the

people that have to process the oil, move the feedstock, treat it, prepare it for shipment, and get it from point A to point B,” he says. “Three million gallons a month—that’s a sea of oil, not to mention the meal created. We’ll be employing a lot of people to make this happen. We’re taking advantage of [the infrastructure that] soy and corn created, for another input.” Jobs, jobs, jobs. “That’s what it’s all about,” Garlington says. “It’s been fantastic working with Carolina Opportunity Funds. It’s gotten us noticed by the Republican legislature running the state. It’s been wonderful. What I really want to get across is that we are creating 200 full-time jobs in renewable energy through this project, the right way.” Author: Ron Kotrba Editor in Chief, Biodiesel Magazine 218-745-8347 rkotrba@bbiinternational.com

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INDUSTRY

THE OTHER

UNSEEN ENEMY Targeted email fraud known as spear phishing is costing businesses, including those in the biodiesel sector, billions of dollars BY RON KOTRBA

As the novel coronavirus pandemic pushes the global healthcare system to the brink and temporarily grinds the world’s economies to a halt, another scourge affecting biodiesel-related businesses big and small has been around for years. This

unseen enemy comes in many forms and goes by many names—spear phishing and CEO fraud being two of the more common ones— but in the end, they are all email and wire fraud that ultimately result in loss of revenue and trust. “In the simplest terms, phishing is a fraudulent attempt to obtain information—financial, personal, usernames and passwords—through which the perpetrator is passing themselves off as a trustworthy entity that you’re familiar with,” says Scott Tremain, IT director for the National Biodiesel Board. “Phishing attempts are sent to large numbers of users simultaneously, like spam. It’s like casting a net in the ocean.” Spear phishing, on the other hand, is just like the name suggests—it is a much more targeted phishing attempt. “The scammer has studied or gathered information about the victim online,” Tremain says. “Because of that, the scammer’s email includes personalization to trick the victim into falling for the scam.” The goal of spear phishers is to trick the target into remitting payment to their bank accounts. Everything a scammer typically needs to pull off a successful spear phishing attempt can be found on the victim’s corporate website for everyone to see: company staff members and executive leadership, logos and letterheads, email addresses, clients, news and more. To 26

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make matters worse, businesses and individual staff members within those companies often have social media accounts that detail personal information including children’s names, travel plans, likes and dislikes, and much more. Outside of the content of a spear phishing email, which can include personal information, letterheads, a writing style and email signature that may lend credence to its legitimacy, one important detail the receiver sees right away is the name of the sender. “You can make the name anything you want,” Tremain says. “That’s easy to do.” Another important detail is the email address. Tremain says some scammers use email addresses that are similar to, but not exactly the address of the person they are impersonating. “The scammer is counting on, or hoping the victim won’t notice the email address is a little off,” he says. Maybe there is an underscore instead of a dot, or the name portion, the front half, of the email address is the same but the domain name, the back half, is one of the many free email services available instead of the company domain name. “To make matters worse,” Tremain says, “some email clients don’t show the sender’s address, so all you see is the sender’s name, which, again, can be anything you want.” If employing an exact username and a similar email address is spear phishing 101, then Tremain says spear phishing 201 involves spoofing the email address so it looks precisely like the address of the person being imitated. “Spoofing the email gets trickier, but spammers have long been able to do that,” he says. This is similar to how callers spoof telephone numbers to make it appear as if the call is coming from a local number with the same area and

2020 SPRING EDITION

city codes. Tremain says although the incoming email address may look identical to the person’s email address the spear phisher is imitating, the “reply to” email address will be different. “They’ll put their email address—or an email address they’ve created that is similar to the address they’re impersonating—in the ‘reply to’ field,” he says. This way, the email seems as if it’s coming in from a trusted person but the sensitive bank account or financial information in the reply message is routed to the scammer. A more specific type of spear phishing is called CEO fraud. “This is even more diabolical because the scammer will make their email look like it comes from the company CEO,” Tremain says. Under the guise of the company CEO, the spear phisher, who again has done their homework, will send an email to the chief financial officer (CFO), the human resources or accounting departments asking them to wire funds. “As strange as it sounds, it’s easier to ask for the bank account information or for money to be wired than to hack into the company system or network,” Tremain says. “They just send an email and, surprisingly, companies fall for it. The FBI has statistics, and in 2015 alone there were 7,800 complaints and $246 million lost to CEO fraud. Since 2016, this has cost companies $26 billion. It’s working. People are being victimized.”

Industry Attacks Paul Dickerson, president of Third Coast Commodities, a physical commodities merchandiser buying and selling fats, oils and greases in the biodiesel sector, says his company first became aware of spear phishing in 2014 when TCC got an email from a vendor stating that their bank information had changed. “It came in writing from a known email address,” Dickerson says. “A few days later, we got another email from the same address asking for payment.” Since the “bill” was already “paid,” TCC advised the vendor that payment was already remitted. “The receiver said, ‘We never got it, and we never changed our bank account information.’ We showed them the email, and that started the process. We went to the FBI, and they said unless it’s more than $50,000 in fraud, they wouldn’t chase after it.” This was six years ago, and the situation has only gotten worse since then, particularly recently, Dickerson says. “We know and are now aware of dozens of similar cases of email or wire fraud like this in our industry,” he says. “It’s been particularly rampant in the past 90 days.” Dickerson rattles off a long list of wellknown companies in this sector, from biodiesel

producers and large rendering companies to lesser-known mom-and-pop outfits. When asked how he learned of all these companies falling victim to spear phishing, Dickerson says, “This is what we do for a living—we trade information and we’re at the nexus of a network of people who talk every day. Our industry wires millions of dollars daily, buying and selling RINs, transportation freight and feedstock. All it takes is the wrong person getting an email asking to change my bank information and there go tens of thousands of dollars.” An ex-employee of a large rendering company who asked to remain anonymous tells Biodiesel Magazine of a similar situation that bilked his old firm of tens of thousands of dollars. “We had a customer pay an invoice after receiving an email from a trader within [our company] that our remittance information had changed,” the source says. “There was a PDF document attached to the email and they clicked on it, and it looked like our company letterhead. But instead of confirming this by reaching out and verifying whether this account information had in fact changed, there were no questions asked. The truckload of feedstock went to [the biodiesel producer] and they paid the new ac-

count. Then, a week later when we inquired on where they were with the payment, they told us that our account information had changed, and they paid it. This threw a bunch of red flags up and [the rendering company] got the FBI involved. Within something like 15 minutes of receiving the ACH (automated clearing house) payment, it was transferred and went through like 12 different accounts and was gone. Luckily this only happened with one truckload, but after that, the company cracked down.” The NBB isn’t immune to this either, but thankfully, as the organization’s IT director, Tremain knows what to watch for. “We still get these,” he says. “I remember the first one we got maybe five or six years ago. Our CEO at the time was Joe Jobe, and he was traveling overseas. Our CFO received an email, which appeared to be from our CEO asking us to wire him $28,000. Immediately our CFO recognized that this isn’t something Joe would do.” Tremain says he would not recommend doing this, but he wanted to see where responding to the email would lead. “When I hit reply, the email address in the ‘reply to’ field was something like ‘joejobe@gmail.com’ so I said, ‘Okay, let’s see what we can do here to reel www.BiodieselMagazine.com

INDUSTRY them in a little,’” Tremain says. “After the CFO responded asking how to proceed with wiring the money to ‘Joe,’ we quickly got another email in which the scammer gave us their bank and account information. At that point, we stopped all communication and I contacted the bank, which is in New York City. Not surprisingly, this was not the first time the bank’s fraud department had taken a report on that account. After that, we never heard any more about it.” NBB’s accounting office still gets this type of email from time to time, Tremain says. “When our CEO changed, so did those emails,” he says. “They are pulling this information from our website, which seems easy. It’s uncanny though how that email from ‘Joe’ said he was out of the country when, in fact, he was. I don’t know if the scammer knew this, or if it was just a lucky coincidence. It’s not farfetched to think that they did their research and knew he was traveling at a conference overseas. I can see them doing that—they want to make it as believable as they can.” When asked what can be done about prosecuting these fraudsters or recouping any lost money, Tremain says, “Nothing. I don’t think there is anything that can be done. When we got that one and we followed up, they sent us the bank information and account number. After notifying the bank and hearing nothing further from them, we reported it to the attorney general and the Federal Trade Commission, but the trail went cold after long. Whether they can trace the bank information back to an individual, I don’t know, but there are ways to obfuscate and hide behind these things.” Insurance won’t cover this type of loss either, Dickerson says. “If money is taken from your account, that’s one thing,” he says. “But if one willingly changes bank information without following up, then that’s when you’re out the cash.” Dickerson says according to the FBI, this type of activity is strong in eastern Europe and southeast Asia. “It’s simple math,” he says. “There’s 3 billion people on planet earth who make less than $1,000 a year. They have the opportunity to go to work in a [shoe] factory earning $2 an hour, or they can pull off a scam like this and rake in tens of thousands of dollars—far more than they could ever make in a factory.” Anthony Pellegrino, a senior trader with TCC, says these fraudsters are monitoring their emails 24 hours a day. “As soon as they get a hit, they pull the money out and wire it to Asia or wherever,” he says. With the novel coronavirus outbreak, concerns are mounting about email-related 28

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wire fraud ramping up. “Our biggest concern is what’s happening in the global economy right now,” Dickerson says. “There may be another 500 million people out of work, sitting around looking for money.” Tremain says scammers aren’t going to self-quarantine or take a break during the pandemic. “They typically come out of the woodwork after a disaster and prey on people’s generosity,” he says. “And that will be the case here too.” Protective Measures Technology only goes so far in protecting people from these scams, so it ultimately comes down to knowing what to look for and taking extra precautions before transmitting sensitive bank account information over email or remitting payment to someone asking via email to send funds to an unfamiliar or new account. “Spam filters and malware can only do so much to keep phishing emails from reaching your inbox,” Tremain says. “We see a lot of attempts that get filtered and stopped before reaching the inbox. There are products that, on the server level, scan emails for things. They’ve got algorithms to detect things. There are a lot of checks and balances sophisticated servers will use when emails come in. Like, if an email address doesn’t match the mail server it’s coming from, it’ll raise a red flag. But these scammers are always one step ahead to outsmart these filters. Just like with Covid-19, it’s your and my and everyone’s responsibility to do the right thing from a hygiene perspective to prevent the spread. It’s the same for businesses and email fraud. They have to educate themselves to be aware of what’s out there and how these fraud attempts are built and fashioned to trick people into responding, wiring money or bank information. Businesses must let their customers or clients know that they’ll never ask for this information over email. No real business will email you for your username and password. I hate to say, but so much of this is common sense. If you get an email like this, you need to ask yourself whether you know them. If you don’t, it’s a scam. If you do, then run it by your IT department or call the person who emailed you, or if you have their real email, send them a fresh email and ask them.” Dickerson says TCC has an internal policy never to change anyone’s bank information until it’s been verified through a phone call or other means. “I am shocked how many people didn’t have that kind of policy,” he says. “In January, people started receiving emails on our letterhead, which several of our customers got and changed bank account information. We

2020 SPRING EDITION

thought we had made everyone aware, but you have to be repetitive—over and over. Don’t change anyone’s bank information without talking to a voice you’re familiar with. If the whole industry adopted that technique, these fraudsters would be shut down tomorrow. It’s that simple. Do not change people’s bank information without approval or talking with them in person.” Other protection measures TCC employs includes a two-factor authentication for company smart phones, application securities, Microsoft authenticators for all system logins and more. “Also, our bank has external key fobs, so there’s a password and remote fob key and a random number generator so you have to be in possession of that, and a username and password, so if they detect an [unfamiliar] computer there’s a third-party text to phone.” After the large rendering company was taken for thousands of dollars, the source says the firm sent out a companywide letter from the legal department, broadcasting that if employees receive any kind of email request changing bank information, it must be verbally approved and confirmed. “The company did its best to mitigate any further occurrences by telling customers, ‘We never change our bank or account, as we’ve been with the same bank for 20 years, so if you see anything like this, please call first. If you need to call a trader, then call them, but never change our remittance information.’” The source says other attempts came through and they were red-flagged and caught. “We also received scam emails from what looked to be our vendors,” the source says. “After all this happened, the IT security team developed an in-house phishing program where we all had to go through a one-hour training course. Then they would test us by sending us emails that would look real but when you’d hover the mouse over the address line, you’d see it was fake, stuff like that.” Writing styles can be spoofed too. “If it comes in writing through an email, they can spoof anyone’s writing to where you can’t tell it’s fake,” Dickerson says. “But if you know my voice, my phone number, and a second party in my company, it’s as simple as that.” Tremain reiterates that common sense is critical. “Look at emails closely,” he says. “Look for broken English, or their writing style or lack of an email signature. Look at the email address or the address in the ‘reply to’ field. Be skeptical and really scrutinize these.” He adds that people must also continue to be careful about what links they click on in their emails. If one is un-

Checklist to Help Avoid Falling Victim to Email Wire Fraud 1. Never change remittance or provide bank account information, usernames or passwords solicited via email without verification through other means (phone call, in writing, in person, a fresh email to known contacts, etc.). 2. Develop an internal policy on emails soliciting financial information or bank account changes, and notify customers of this policy. 3. Develop a rigorous internal training program to make personnel aware of these scams, what to watch for, and test employees afterwards.

sure whether the email is legitimate, open a web browser and access the site directly, he says. “We’ve got to start being more cautious when dealing with emails,” he says. “People hear this a million times, but the problem continues.” In the end, this type of fraud can destroy relationships and cost businesses a lot of money. “Stay diligent,” the rendering company ex-employee says. “Don’t take anything for

4. Collaborate with customers on education, training, corporate policy and protocols.

6. Be aware of information posted to the company website and know this may be used by spear phishers.

5. Scrutinize emails, particularly those seeking sensitive information. a. Look closely at the sender’s name and incoming email address, and even more importantly the email address in the “reply to” field. b. Watch for broken English, misspellings or inconsistencies in language and writing style. c. Look at signatures and scrutinize for inconsistencies.

7. Be cognizant of information posted on social media accounts including travel plans, children’s names and other personal information.

granted.” Keeping open lines of communication is critical between companies and customers or vendors, and internally between executives, the IT department and employees. “The biggest thing is awareness,” Dickerson says. “Talk about it. Call us. Stop the problem from happening. We’ve been able to alert multiple companies that they are under attack. Tell them we’re not changing this until we talk. If every

8. When in doubt, run any suspect emails by the IT department. 9. Be wary of clicking on links. 10. Stay diligent.

company did that—made that phone call— this would all be over tomorrow.”

Author: Ron Kotrba Editor in Chief, Biodiesel Magazine 218-745-8347 rkotrba@bbiinternational.com

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