2018 Biodiesel Magazine Summer Issue by BBI International

INSIDE: NATSO ALT FUELS COUNCIL PRIORITIZES BIODIESEL QUALITY 2018 Summer Edition

C LEA N

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Several NOx-Reducing Formulations Approved for B20 in California

Page 20

Plus Spotlight on Fuel Quality Page 14

And Biodiesel

Firestarter Page 22

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CONTENTS 2018 SUMMER ISSUE VOLUME 15 ISSUE 3

FEATURES

14 Fuel Quality Focus SPOTLIGHT

Biodiesel Magazine spotlights three leading companies whose products and services help ensure biodiesel quality in the marketplace

BY RON KOTRBA

20 On the Road Again—Legally ADDITIVES

NOx mitigation requirements in California’s ADF regulation left B20 with an uncertain future—that is, until biodiesel stakeholders stepped up to the plate

BY RON KOTRBA

22 Biodiesel Firestarter PRODUCTS

Escogo founders epitomize the bootstraps mentality of the American dream, a garage startup that grew to stock shelves in 20,000 stores

BY RON KOTRBA

20 DEPARTMENTS 4 Editor’s Note

7 Events Calendar

Inspiration Moves Me

8 Business Briefs

BY RON KOTRBA

10 Inside NBB

5 Legal Perspectives

Go Big with Data, or Go … Out of Business?

BY DONNA FUNK 6 Talking Point

Advertiser Index 28 24 2 25 18 15 9 8 17 7, 19 16 27

2019 International Biomass Conference & Expo Bioblending.com Biodiesel Industry Directory Biodiesel Magazine's Top News Biodiesel Magazine's Webinar Series Dallas Group of America, Inc. Fuels Fix HTH Companies Intertek Caleb Brett National Biodiesel Board OXIBIOL (EcosMetique) Universal Green Commodities

NATSO Alternative Fuels Council Prioritizes Biodiesel Fuel Quality

26 The Last Word

A Decade Deep: Positioned, Poised & Prospering BY JAMIE O’BRIEN

BY JEFF HOVE

ON THE COVER:

Diesel truck drivers in California now have several marketplace options for B20 additized with NOx-reducing agents approved by CARB and compliant with the Alternative Diesel Fuels regulation. PHOTO: RENEWABLE ENERGY GROUP INC.

www.BiodieselMagazine.com

EDITOR'S NOTE

INSPIRATION MOVES ME

www.BiodieselMagazine.com

Ron Kotrba

E D I T O R I A L Tom Bryan President & Editor in Chief tbryan@bbiinternational.com

Editor Biodiesel Magazine rkotrba@bbiinternational.com

Ron Kotrba Editor rkotrba@bbiinternational.com Jan Tellmann Copy Editor jtellmann@bbiinternational.com

One of the most enjoyable aspects of my job is being able to share some of the many inspirational stories that have built, and sustain, this great industry. It brings a vital human element to the machinery, equipment, vehicles, technology and abstract indexes so often associated with the field of biodiesel. There is an abundance of these tales floating in the biodiesel ether, but in this day of social networking and electronic communication, the delicate nuances found only in conversation with one another are often lost to technology. As a result, capturing these fascinating experiences, or even knowing they exist at all, becomes a shot in the dark. The irony is social media and technology are thought to bring people closer together, but in many cases these are doing just the opposite. The even greater irony is the art of communication is being lost as our communications technologies intensify. Many times, a simple face-to-face conversation, or even a discussion on a very old piece of technology—the voice function on a telephone—can provide magnitudes more information than a tweet, post, text or email. Serendipitously, I managed to capture several of those inspirational stories floating in the biodiesel ether for this issue. What started as an additive piece on page 20, “On the Road Again—Legally,” ended as the latest installment of the biodiesel industry’s overcoming seemingly insurmountable obstacles. Just over a year ago it was uncertain whether biodiesel blends above a few percentage points would even be legal in California under the Alternative Diesel Fuels regulation, which went into effect Jan. 1, 2018, requiring NOx-mitigating solutions for biodiesel. No additives to mitigate NOx emissions existed, and it was uncertain whether anyone would develop them. With help from the National Biodiesel Board, which got the ball rolling, we now have several effective and affordable solutions in the California marketplace. During my routine plant calls to check on statuses of biodiesel manufacturing facilities for our annual printed plant map, I talked with Rick Huszagh, co-founder of Down to Earth Energy doing business as Clean Energy Biofuels, which owns and operates a 2 MMgy plant in Monroe, Georgia. In our talk, he mentioned the chemicals business he and the inventor of the Smarter Starter Fluid, Marcus Smith, were growing at the biodiesel production plant in Georgia. After additional conversations with Smith and Huszagh, the story on page 22, “Biodiesel Firestarter,” came to be. The account proves to me the American Dream is still alive and well. Check it out and see for yourself. On page 26, Jamie O’Brien, founder of Universal Green Commodities, provides his own inspiring story in “A Decade Deep—Positioned, Poised & Prospering.” With only a high school education but possessing worldly experience many will never see, O’Brien left the rat race of the corporate world to venture out on his own. Facing setbacks, learning curves and interesting people along the way, he managed to not only survive in the cutthroat world of biodiesel, but thrive. In the pages that follow, we hope you find the stories we share with you as informative and inspirational as I found them. As Jerry Garcia of the Grateful Dead sang in the 1970s song Terrapin Station, “Inspiration, move me brightly.” We all require inspiration now and again. The inspiration you need or can give may be just a conversation away.

P U B L I S H I N G Joe Bryan John Nelson Howard Brockhouse

Business Development Director hbrockhouse@bbiinternational.com

Chip Shereck

Senior Account Manager cshereck@bbiinternational.com

Jessica Tiller

Circulation Manager jtiller@bbiinternational.com

Marla DeFoe

Marketing & Advertising Manager mdefoe@bbiinternational.com

Dayna Bastian

Social Media & Marketing Coordinator dbastian@bbiinternational.com

Jaci Satterlund

A R T Art Director jsatterlund@bbiinternational.com

Raquel Boushee

Graphic Designer rboushee@bbiinternational.com

Subscriptions Subscriptions to Biodiesel Magazine are free of charge to everyone with the exception of a shipping and handling charge for any country outside the United States. To subscribe, visit www. biodieselmagazine.com or you can send your mailing address and payment (checks made out to BBI International) to: Biodiesel Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Reprints and Back Issues Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 701-746-8385 or service@bbiinternational.com. Advertising Biodiesel Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and highquality print production. To find out more about Biodiesel Magazine advertising opportunities, please contact us at 701-746-8385 or service@ bbiinternational.com. Letters to the Editor We welcome letters to the editor. If you write us, please include your name, address and phone number. Letters may be edited for clarity and/or space. Send to Biodiesel Magazine Letters, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203 or email rkotrba@bbiinternational.com.

Please recycle this magazine and remove inserts or samples before recycling

BIODIESEL MAGAZINE

2018 SUMMER EDITION

S A L E S

Marketing & Sales Director jnelson@bbiinternational.com

CEO jbryan@bbiinternational.com

LEGAL PERSPECTIVE

Go Big with Data, or Go … Out of Business? BY DONNA FUNK

About a year ago, I remember reading an excerpt by Bill Gates— founder of Microsoft and one of the wealthiest citizens on the planet— advising college graduates on the fields he would explore if he were starting out in the world today. In essence, he advised considering these three areas: artificial intelligence (AI), energy and biosciences. His interest in energy was not surprising as he stated that making clean, affordable and reliable energy will be essential for fighting poverty and climate change. Regarding AI, Gates remarked, “We have only begun to tap into all the ways it will make people’s lives more productive and creative.” What a simple explanation for something so wildly complex and underdeveloped, I thought. With so many news headlines circling on a daily basis regarding “future possibilities” of AI, the Internet of Things and data management, it’s easy to dismiss these topics and file them away in the “not now” pile. But as flashy as the promises of applying AI technologies might be, if you look closely, it’s already starting to take shape—and the foundation is being laid out right before our very eyes.

We Are All Witnesses

The International Data Corp. forecast in a report that the amount of data being generated in the digital universe will grow to 44 zettabytes by 2020—that’s 44 trillion gigabytes! One can’t help but marvel at the speed in which the big data adoption is already changing industry landscapes and operations. We are able to collect and analyze more data than ever before. But to stay competitive as the data growth continues to explode, it will be imperative to derive maximum value from the data captured. As a certified public accountant focused on the world of biofuels, it has become abun-

dantly clear that energy will, sooner rather than later, be interconnected with massive computing power, data collection and storage capabilities—and will ultimately change how we all do business from virtually every standpoint. Even accountants are changing the way we gather, analyze and provide data. Moving away from traditional financial data reporting and the reliable spreadsheets, we are gathering more data from many sources and using technology to support assumptions and draw conclusions. We are emerging as advisors with more and varied data for predictive financial and operational analytics.

The Big Data Algorithm

The business algorithm for data management is quite simple: The ability to extract broader types of data can ensure that a business becomes more agile. Big data provides real-time information to enrich usability. Usability drives more meaningful business decisions. Biodiesel companies that adopt a data management system are able to govern big data and build solutions to: • Improve return on investment through environmental and cost of production analysis (as well as understand changing market conditions) to determine whether yields might be profitable and achievable. • Improve production efficiency through remote monitoring and analysis, and avoid environmental and safety issues. • Secure cost-effective and timely supply chain and logistics management through timely deliveries and optimal production facilities. • Expand market analysis of current pricing and trends to determine production, optimization and expansion strategies. While extensive amounts of data can be used to create more streamlined supply chains or performance optimization, none of this can happen without data management systems. Businesses must know how to gather, use and

analyze data to optimize production and pass product traceability data further along the supply chain.

Data Management Best Practices

Implementing data management systems is prescriptive and unique for each biodiesel organization. The importance of protecting the quality and security of your data will be imperative for its management. When adopting and managing big data collection systems, there are several recommended best practices to which organizations should adhere. First, audit what data is being collected, through what means and measures, and how it is processed and stored. Next, establish consistent data definitions to streamline data collection and storage. Set business objectives and goals to store and analyze only necessary data. Implement data governance procedures related to data management, access, usage and security. Lastly, distribute verification responsibilities to ensure policies are being followed and educate on procedures. Poor-quality data can be very costly; IBM estimated that the cost of poor-quality data was $3.1 trillion in 2016 alone. Big data has taken the world by storm and is helping businesses prepare data and conduct predictive analysis so that biodiesel companies can overcome future challenges easily. While having tremendous amounts of data will not necessarily give you a competitive advantage, it will help you extract actionable information, which can impact how quickly and easily you can analyze business decisions.

Author: Donna Funk CPA and Principal, K·Coe Isom 913-643-5002 funk@kcoe.com

www.BiodieselMagazine.com

TALKING POINT

NATSO Alternative Fuels Council Prioritizes Biodiesel Fuel Quality BY JEFF HOVE

When it comes to renewable fuels, recent discussions have centered on the effects of small refinery hardship waivers under the Renewable Fuel Standard, renewable identification number (RIN) credits on exported gallons, acceptable RFS mandate levels, and new EPA Administrator Andrew Wheeler. But be-

yond these high-level topics are a number of less-discussed issues that affect everyday fuel quality issues for fuel retailers. Alternative fuels such as biodiesel represent an important growth opportunity for fuel marketers nationwide. But for many fuel retailers, myriad state and federal regulations and incentives for alternative fuels can seem like a complex and almost overwhelming system to navigate. In addition, the growing number of fuel offerings and renewable fuel blending options makes fuel quality increasingly important from a product liability and customer retention standpoint. To help fuel retailers leverage the resources necessary to learn about and incorporate alternative fuels into their supply offerings, NATSO, the national trade association representing travel centers and off-highway fuel retailers, in mid-June launched the Alternative Fuels Council (NATSOAltFuels.com). Designed to satisfy our industry’s need for expert, convenient and cost-effective solutions that will help bring alternative fuels to market, the Alternative Fuels Council works with all members of the fuel marketing industry to navigate the litany of state and federal fuel regulations and to utilize available government incentives for alternative fuels, including the RFS and state and federal tax credits. The Alternative Fuels Council also helps its partners implement profitable strategies related to alternative fuel supply options and fuel infrastructure. Among its initial offerings, the Alternative Fuels Council unveiled a biodiesel Fuel Quality Plan designed to help those who blend, market and distribute biodiesel blends ensure the final product that they sell to consumers meets a minimum standard of quality. To assist with new and existing supply relationships, the Al-

BIODIESEL MAGAZINE

ternative Fuels Council will help facilitate fuel testing and analysis for marketers. There are a number of financial incentives for marketers to incorporate renewable fuels into their supply offerings. For any credits or incentives to be viable, however, the fuel must meet certain ASTM fuel quality standards. If the fuel does not meet these standards and a credit is claimed, then the claimant is open to severe compliance penalties. While biodiesel producers and ULSD suppliers can provide certain accreditations and quality assurances, the blender must understand that a certificate of analysis rarely represents the actual gallons being purchased. It is imperative that the blender or marketer remains vigilant regarding the quality of the unblended and blended product. To do this, the marketer must consider each step in the blending process and how to mitigate any negative outcomes to their business, while at the same time taking advantage of the incentives that blending fuel has to offer. The Alternative Fuels Council’s Fuel Quality Plan provides further insight into each element of the blending process and delivery to customers, critical points for fuel quality management including sampling procedures, protocols and proposed schedules. This guide also includes cost-saving suggestions for analytical sampling, which the Alternative Fuels Council has negotiated on behalf of its clients and NATSO members. Fuel sampling, prior to blending and post-blending, is at the core of the Fuel Quality Plan. The Alternative Fuels Council’s Fuel Quality Plan addresses many market factors that impact biodiesel and diesel fuel quality and provides fuel quality guidance in the following areas. Purchasing: Many biodiesel producers today use different streams of feedstock rather than a single stream. Feedstock streams influence cold weather properties and therefore the quality of fuel. The Alternative Fuel Council’s Fuel Quality Plan outlines various accreditation programs, the EPA’s Quality Assurance Program for RINs, and the importance of a certificate of analysis. Transporting: The chain of custody dictates who is responsible for fuel quality. If a producer or supplier is also maintaining cus-

2018 SUMMER EDITION

tody until the product has been delivered, then this allows the buyer to test the fuel prior to taking possession of the product. The Fuel Quality Plan addresses a number of transportation challenges. Storage: B100 is a solvent and therefore may loosen or dissolve varnish and sediments in fuel tanks and systems that petroleum diesel has left over time. The Fuel Quality Plan provides a number of housekeeping and maintenance tips related to fuel storage, temperature considerations, equipment compatibility and federal underground storage tank regulations. Blending: Blending can take place by an upstream supplier or distributor or can be completed downstream by a petroleum retailer. The Fuel Quality Plan provides guidance on splash, terminal or rack blending, and on-site blending equipment. Dispenser Labeling: There are a number of federal and state labeling requirements associated with different blends of biodiesel. The Fuel Quality Plan provides guidance on these requirements. Sampling Protocols: The best way for a fuel marketer to stand behind their fuel quality is through regular and ongoing testing of the fuels they are purchasing and the final blends being sold. But testing fuel can be expensive and time-consuming. The Alternative Fuels Council has partnered with a BQ9000-certified fuels lab for a fuel quality check sample regiment at a substantially discounted price. This allows participants to sample their supply more frequently and minimize exposure to consumer complaints and regulatory violations. The Fuel Quality Plan is available to blenders at no cost and is designed to be easily implemented by single-location or large-chain operators. Biodiesel has a tremendous capacity to expand in the U.S. and it is our goal to do this safely and most efficiently with best practices and close oversight. Author: Jeff Hove Vice President, Alternative Fuels Council 703-739-8560 jhove@natsoaltfuels.com

EVENTS CALENDAR

National Biodiesel Conference & Expo JANUARY 21-24, 2019 San Diego, CA Marriott Marquis San Diego Marina

25 Years of Serving the Biodiesel Industry

The National Biodiesel Conference & Expo is the biggest biodiesel event of the year. Whether you are an industry veteran, or just getting your feet wet in the biodiesel world, the National Biodiesel Conference & Expo has plenty for all. Speakers will present thought-provoking and engaging sessions, with keynote speeches and roundtable discussions presented by industry experts. Find new opportunities to network with other professionals from around the country and get business done. Registration will be live this fall at www.biodieselconference.org.

The National Biodiesel Board is International Fuel Ethanol Workshop & Expo JUNE 10-12, 2019 Indianapolis, Indiana From its inception, the mission of this event has remained constant: The FEW delivers timely presentations with a strong focus on commercial-scale ethanol productionâ&#x20AC;&#x201D;from quality control and yield maximization to regulatory compliance and fiscal management. The FEW is also the ethanol industryâ&#x20AC;&#x2122;s premier forum for unveiling new technologies and research findings. The program extensively covers cellulosic ethanol while remaining committed to optimizing existing grain ethanol operations. 866-746-8385 www.fuelethanolworkshop.com

Advanced Biofuels Conference JUNE 10-12, 2019 Indianapolis, Indiana With a vertically integrated program and audience, the Advanced Biofuels Conference is tailored for industry professionals engaged in producing, developing and deploying advanced biofuels, including cellulosic ethanol, biobased platform chemicals, polymers and other renewable molecules that have the potential to meet or exceed the performance of petroleumderived products.

celebrating 25 years of hard work and innovation by those who were driven to make the biodiesel industry what it is today and those who are driven to take this industry into the future. For Governmental Affairs, Communications, Market Development, Technical and Quality Assurance programs, and more, join NBB today. Contact Brad Shimmens, Director of Operations and Membership, at bshimmens@biodiesel.org for information.

866-746-8385 www.advancedbiofuelsconference.com

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Learn More About the Biodiesel Industry View Biodiesel Magazine's Webinar Series' upcoming and OnDemand webinars. 866-746-8385 | www.biodieselmagazine.com/pages/webinar

www.nbb.org | www.biodiesel.org 1-800-841-5849 www.BiodieselMagazine.com

BusinessBriefs

People, Products & Partnerships

Bio Petro Biofuels’ 50 MMgy plant in Sao Paulo, Brazil Baker

PHOTO: INVENTURE RENEWABLES

PHOTO: BRIDGEPORT BIODIESEL

Bridgeport Biodiesel 2 LLC, a fully permitted, commercial-scale biodiesel refinery with a capacity of 13 MMgy, has retained Equity Partners HG to find an investor or buyer for the company. The refinery is located in an ecotechnology park in Bridgeport, Connecticut, 50 miles north of New York City. Commissioned in 2017, the plant produced 220,000 gallons of on-spec biodiesel from used cooking oil. Production setbacks with a novel esterification technology ultimately led to filing of Chapter 11 bankruptcy. CEO Brent Baker said he is eager to exit bankruptcy properly capitalized and restart operations.

Inventure Renewables announced the successful implementation and nearly year-long operation of its Mixed Super Critical Fluid technology at a Wilmar International Ltd. processing plant in Jiangsu province, China. The technology is being used to produce fatty acid methyl esters for oleochemicals and biodiesel from a wide range of vegetable oil feedstocks. Mark Tegen, CEO of Inventure, said the launch of the plant in China is validation of the MSCF technology’s scalability at a commercial level.

PHOTO: BIO CLEAN ENERGY S.A.

Bio Petro Biofuels, a subsidiary of Denver-based Bio Clean Energy S.A., has won a contract to supply biodiesel to the Bolivian government-owned Yacimientos Petrolíferos Fiscales Bolivianos in a public tender process. The biodiesel will be produced at the company’s 50 MMgy plant in Sao Paulo, Brazil, which was constructed in 2008 and expanded in 2013 to produce refined glycerin. YPFB provides about 90 percent of the fuel consumed in Bolivia. According to John Kaweske, CEO of Bio Clean Energy, the contract calls for up to 9.5 million gallons over 12 months.

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BIODIESEL MAGAZINE

2018 SUMMER EDITION

BUSINESS BRIEFS

PHOTO: HERO BX

Hero BX cut the ribbon at its new research and development laboratory on the Erie campus of Penn State Behrend. Located at Knowledge Park in the Advanced Manufacturing and Innovation Center, the lab advances Hero BX’s efforts to diversify and develop biodiesel products for new markets while utilizing students in industry-driven research. One of the first initiatives is to realize a way to reduce the sulfur content of feedstocks used in biodiesel production. Subsequent studies will focus on increasing the efficiency of biodiesel in cold temperature applications such as the airline industry.

PHOTO: BIODIESEL AMSTERDAM

PHOTO: RENEWABLE ENERGY GROUP INC.

Renewable Energy Group Inc. completed its $32 million biodiesel plant expansion and upgrade project in Ralston, Iowa, taking capacity at REG’s first plant from 12 to 30 MMgy. Along with the expansion, significant upgrades have been made to its logistics and storage capabilities. REG broke ground on the project in November 2016 with an initial $24 million commitment. The company invested another $8 million for additional improvements. First Midwest Bank provided $20 million to partially finance the expansion.

U.K. biodiesel producer Argent Energy Group, a subsidiary of John Swire & Sons Ltd., has reached an agreement to acquire Amsterdam-based Simadan Group’s biodiesel production, tank storage and cleaning facilities. Biodiesel Amsterdam is an operating facility that produces more than 100,000 tons per year (30 MMgy) of tallow-based biodiesel. The company expects the acquisition to be completed by early September, representing Argent Energy’s first step to replicating its business outside the U.K.

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NATIONAL

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Targeted Outreach Efforts Lay Foundation for Industry Growth One of the things that makes our work here at the National Biodiesel Board both unique and exciting is that we are never satisfied with the status quo. As the national trade association representing the entire biodiesel value chain, we continually strive to identify new opportunities to educate and engage stakeholders on the wide-ranging benefits of biodiesel. By sharing our clean-energy success story with diverse, targeted auDonnell Rehagen, CEO, diences, we increase awareness and supNational Biodiesel Board port for America’s advanced biofuel, laying the foundation for industry growth. NBB programs offer ample opportunity to make inroads with key allies, including through our communications, technical, sustainability, and state and federal affairs efforts. New this year, NBB is proud to partner with several industry sponsors to offer five regional, one-day seminars designed to educate the supply chain about the benefits and opportunities surrounding biodiesel. We are offering NBB’s years of expertise at no cost to attendees in an effort to increase understanding of biodiesel’s place in today’s liquid fuels supply chain. It is critical that those who handle, store, buy and sell biodiesel have a complete understanding of how the fuel can be leveraged not only as a cleaner-burning, renewable complement to diesel fuel, but as a means to increase market share and enhance an organization’s brand. Thanks to our sponsors, NBB staff and other industry experts are able to provide a comprehensive overview of all things biodiesel during these four-hour seminars, Exploring Biodiesel (XBX). We ask you to help spread the word and encourage participation in these educational events. The program is designed for fuel wholesalers, distributors, retailers, marketers, fleets, municipalities and other end-users who are interested in the operational, environmental and cost benefits of biodiesel. Our goal is to offer the most comprehensive biodiesel educational seminar available anywhere in the nation. The XBX series kicked off in Boston June 12 and the second stop was Philadelphia on July 18. The first two seminars drew strong participation from all sectors of the biodiesel marketplace. Initial attendee survey results were overwhelmingly positive, with the vast majority of respondents reporting that the seminar exceed10

BIODIESEL MAGAZINE

2018 SUMMER EDITION

ed their expectations and indicating that they would likely attend an annual XBX event to stay updated on biodiesel. At press time, the three remaining cities and locations are: • Los Angeles | Aug. 7 | Long Beach Marriott • Portland, Oregon | Aug. 9 | Billy Frank, Jr. Conference Center • Cleveland, Ohio | Sept. 18 | DoubleTree by Hilton Downtown – Lakeside You can find additional program details and register to attend at www.exploringbiodiesel.com. Second, NBB recently launched our industry’s annual advertising campaign designed to educate key decision-makers, with a special focus on Washington, D.C. The launch, timed alongside our June membership meeting and D.C. fly-in, saturated the midAtlantic and D.C. markets with biodiesel education advertising that supports our advocacy efforts. This year’s “Innovation”-themed campaign includes highly targeted digital advertising videos and images, along with radio, print buys and a social media component continuing throughout the summer and into the fall. This is the eighth year of NBB leading a national advertising campaign, which year-after-year has been cited as a key component of our successful efforts to advance the industry. And our annual voter survey shows that the campaigns have increased awareness and positive impressions of biodiesel nationwide. Finally, NBB’s technical team continues important outreach to OEM representatives from every market segment using diesel fuel to encourage approval of higher biodiesel blends. This includes onand off-road transportation, heating oil, railroads, marine, power generation, and more. All segments currently approve at least B5, which could account for more than 3 billion gallons of total biodiesel consumption. And the vast majority of on-road vehicles support B20 thanks to decades of technical work by the industry. An evolving and growing industry like ours must continually seize new opportunities. NBB is committed to developing educational programs that cultivate new allies and expand our reach to additional markets. These are just a few of NBB’s important outreach efforts that I believe will provide long-term benefits for our industry.

Donnell Rehagan CEO National Biodiesel Board

inside

NBB RFS Growth Welcomed News, But Small Refinery Waivers Threaten Industry The National Biodiesel Board continues to leverage all available resources—expert consultants, biofuels allies and other industry partners—in the daily battle to enact policies in Washington, D.C., that will strengthen the industry and increase biodiesel production. When the U.S. EPA proposed increases in the biomass-based diesel and advanced biofuel categories under the Renewable Fuel Standard in June, NBB expressed cautious optimism. NBB acknowledged that the proposed increases send a positive signal to the industry, but cautioned that EPA’s granting of dozens of retroactive small refinery hardship exemptions undercut prior year volumes and could still have a negative impact on future year standards. “We welcome the administration’s proposal to grow the biodiesel volumes, following two flatlined years,” said Kurt Kovarik, vice president of federal affairs at NBB. “We’re pleased the EPA has acknowledged our ability to produce higher volumes, but instability in the RFS program caused by the EPA has done significant damage that can only be rectified for biodiesel through consistent and predictable growth in volumes.” Kovarik explained that EPA’s decision to retroactively grant numerous waivers to petroleum refiners, releasing them from their obligations under the RFS, has effectively reduced obligations for biodiesel by more than 300 million gallons. “As a candidate on the campaign trail, Donald Trump pledged he would support biofuels and protect the RFS,” Kovarik said. “While this is just a proposal, we hope the administration is serious about growing biodiesel volumes and will fulfill the president’s promise to support and grow the RFS.” The EPA’s proposed renewable volume obligations (RVOs) for the biomass-based diesel category would increase from 2.1 billion gallons in 2019 to 2.43 billion gallons in 2020. The advanced biofuel category, for which biodiesel also qualifies, would increase slightly under the EPA’s proposal from 4.29 billion gallons in 2018 to 4.88 billion gallons in 2019. The RFS, passed by a bipartisan Congress and signed into law by President George W. Bush, requires the EPA to gradually grow the volume of advanced biofuels like biodiesel delivered to consumers. Since taking office, President Trump’s EPA has recommended zero growth for the biomass-based diesel category. Across the nation, biodiesel representatives are making their voices heard on the importance of the RFS. In June, more than 100 NBB members attended the association’s annual membership meeting and fly-in, visiting Capitol Hill to engage their members of Congress on the RFS and other key issues.

USDA Secretary Sonny Perdue, right, met with the NBB governing board in June to discuss important issues affecting the industry.

Earlier that month, Renewable Energy Group CEO Randy Howard, on behalf of NBB, testified before the House Energy & Commerce Subcommittee on Environment emphasizing that stable, predictable growth for biodiesel is key to the future success of the RFS. Biodiesel producers, advocates and agriculture leaders joined the effort with an open letter to President Trump, imploring that biodiesel not be ignored in the Trump administration’s efforts to navigate differences between petroleum refiners and the ethanol industry. Furthermore, NBB joined a coalition of biofuel and agriculture groups in petitioning the EPA to change its regulations to account for lost volumes of renewable fuel resulting from the unprecedented number of retroactive small refinery exemptions from RFS obligations recently granted by EPA. NBB’s wide-ranging efforts have had a positive effect in the nation’s capital, and biodiesel supporters will not let up as they push for federal policies to continue biodiesel’s growth across the country. On July 18, NBB and many of its members testified at an EPA hearing in Michigan on RFS standards for 2019 and the biomass-based diesel volume for 2020. In addition, NBB will submit formal comments on EPA’s proposed rule before the Aug. 17 deadline. The August congressional recess is a great time to set up meetings or invite members of Congress or senators to tour biodiesel plants. Anyone interested in engaging in congressional outreach activities can contact NBB for support. These collective efforts continue to be critical to achieving the biodiesel industry’s policy goals.

www.BiodieselMagazine.com

insideNBB

Minnesota’s Landmark Policy Sets Stage for New Energy Future Long-time biodiesel leader Minnesota is making history and transforming America’s energy landscape by becoming the first state to upgrade virtually all of the diesel supply for sale in the state to B20. The seismic shift in our country’s liquid energy supply turns the status quo on its head. “We often refer to Minnesota as a trailblazer, but somehow that just doesn’t seem adequate anymore,” said Donnell Rehagen, National Biodiesel Board CEO. “Transitioning virtually an entire state’s diesel supply to 20 percent biodiesel is unprecedented. My hope is that Minnesota’s bold move will inspire other states to take similar action. Americans have a choice to change our fuel identity to include much more renewable, economically powerful, clean energy—just like the power industry has diversified with solar and wind.” The transition to B20 happened gradually, from the first statewide requirement of 2 percent biodiesel (B2) implemented in 2005, to B5 four years later, and B10 since 2014. This approach helped ensure sufficient blending infrastructure and education statewide. Like the previous B10 standard, B20 will appear at the pump from April through September. B5 will remain the standard for the rest of the year. Farmers, public transportation systems, fleet operators, school bus fleets, commercial carriers and private users have successfully used B20 across the country for decades. According to the American Lung Association of Minnesota, during the 10-year period with biodiesel as a fuel standard for Minnesota,

U.S. Sen. Amy Klobuchar, D-Minnesota, showed support for the landmark move, pumping B20 during a Minnesota Soybean event on the first day of implementation.

a reduction of more than 7.4 billion pounds of carbon dioxide has already been realized. “NBB is proud to have worked closely with all parties involved to help make this extraordinary policy change a reality,” Rehagen added. “The biodiesel industry in the state and across the country will benefit from the vision and tenacity displayed by those Minnesota farmers, producers, soybean staff and legislators that were on the front lines of this battle.”

Midwest Voters Demand Commitment to Renewable Fuels A recent poll commissioned by the National Biodiesel Board sends the clear message that voters across three Midwestern states want President Trump to keep his promises to protect the Renewable Fuel Standard. According to the survey, voters in Iowa, Missouri and Minnesota are disappointed with Trump administration decisions they view as broken promises of support for local agriculture and renewable fuels industries. Voters across party lines overwhelmingly support federal policies to encourage growth in biodiesel and renewable fuels use. In the 2016 election, then-candidate Donald Trump’s performance in the three states surveyed demonstrated strong support for his public statements that he would support the RFS. “When candidate Trump promised he would be their defender in Washington, D.C., farming communities turned out to the polls in big numbers for him in November 2016,” said Kurt Kovarik, vice president of federal affairs at NBB. “To be frank, rural voters haven’t seen that similar support reciprocated from the administration and that’s reflected in the survey.” While the U.S. EPA recently proposed renewable volume obligations (RVOs) for 2019 that are encouraging, the administration has sent mixed signals about its support for the RFS. In addition to the lack of growth in the RFS in 2018, President Trump’s EPA has pro12

BIODIESEL MAGAZINE

2018 SUMMER EDITION

vided numerous exemptions for refiners, including one of the largest in the U.S., that excuse them from fulfilling their obligations to blend biofuels at their facilities. “Midwestern voters are desperate to see some positive signal from President Trump and Congress,” Kovarik said. “Income from farming has plummeted more than 50 percent. It’s at its lowest point in a dozen years. This poll sends a clear message that rural voters want the Trump administration to take decisive action in support of agriculture and the biofuels industry.”

insideNBB

NBB Highlights Benefits of Biodiesel at Exclusive Ford Fleet Preview Event The National Biodiesel Board was honored to have received an invitation from Ford Motor Co. to attend and exhibit at its exclusive, invitation-only Ford Fleet Preview and Pool Account Meeting in June at FedEx Field in Washington, D.C. This private event brought together Ford’s key executives, dealers and industry partners with Ford’s largest fleet customers to preview and test drive the coming 2019 Ford vehicle product line. NBB was invited to exhibit in the Ford vendor area at the event to help showcase Ford’s support for B20 and the benefits of using clean, renewable biodiesel blends in all of Ford’s diesel vehicles. In addition, NBB representatives had the opportunity to network with Ford executives, product development specialists and key fleet customers. During the event, Ford executives also shared a glimpse into the future of mobility as Ford sees it. Ford anticipates that driverless/autonomous vehicle options will become more prevalent in the years to come, and they are investing significant resources into developing that technology. In fact, Ford is already incorporating some early enabling technologies such as adaptive cruise control and automatic braking technologies into their 2019 models. However, Ford also sees a strong trend toward trucks, SUVs and crossover vehicles and away from sedans. Within the next two years, Ford expects to have the freshest vehicle lineup of any domestic

OEM, with more than 70 percent of its product offerings being new models, including a number of hybrid and battery electrics. Fortunately, all of Ford’s diesel models will remain in the lineup for the U.S., including the world’s best-selling Ford Super Duty F-Series trucks (F-250 to F-750) and existing Ford Transit vans. In addition, Ford is adding two more diesels to its lineup, including the new 2018 F-150 diesel pickup and the 2019 Transit Connect diesel van. All of Ford’s diesel products proudly support the use of B20 biodiesel blends.

2 Communications Experts Fill Vital Roles at NBB National Biodiesel Board members are benefiting from the wealth of experience and biofuels expertise offered by two communications team members who have taken new positions. Kaleb Little takes the reins as director of communications after working in various communications roles at NBB for more than eight years. Paul Winters, the new director of public affairs and federal communications, hit the ground running in June after more than a decade at Biotechnology Innovation Organization. “Kaleb has been a key part of the NBB communications team since his arrival in 2010 where he is a familiar face for our members and a trusted source for media covering our industry,” said NBB CEO Donnell Rehagen. “We are excited to see where Kaleb’s passion, commitment and strategic communications skills take our industry as he moves into a formal leadership role on our staff. His knowledge of the biodiesel industry and our association members is a real asset.” In his most recent role at NBB as senior communications manager, Little oversaw the many strategies used to communicate the benefits of biodiesel to the public including member communication pieces, public events, coordination with stakeholder groups, NBB’s numerous online platforms, social media and more. Winters comes to NBB from BIO, another biofuels trade association, where he was director of communication for the orga-

nization’s industrial and environmental section since 2003. At BIO, Winters led the integration of their policy advocacy and public relations efforts Little Winters into a strategic public affairs program and was key in building BIO’s reputation as a thought leader on regulatory policy. “Paul has been entrenched in the Renewable Fuel Standard, the Farm Bill and other biofuels policy efforts for the past decade,” said Rehagen. “NBB members will benefit from his subject matter expertise and policy background. Based in our Washington, D.C., office, Paul will be key in communicating about some of our members’ highest priority areas.” www.BiodieselMagazine.com

SPOTLIGHT

spotlight FUEL QUALITY

FOCUS Biodiesel Magazine spotlights three companies—an adsorbent manufacturer, a quality assurance firm and an additive maker—whose disparate fields converge on biodiesel to help ensure quality fuel in the marketplace BY RON KOTRBA

BIODIESEL MAGAZINE

2018 SUMMER EDITION

SPOTLIGHT The Dallas Group The Dallas Group of America Inc. coined the term “dry wash” and introduced its synthetic magnesium silicate D-SOL D series products under the Magnesol trademark in 2002. It was the first adsorbent used in the biodiesel market. In the mid-to-late 2000s, the company introduced its D-SOL R series to purify various feedstocks. Steve Sullivan, sales and service director for the Americas, says strong activity in the biodiesel space is fueling innovation. “Existing plants continue to push capacity limits,” he says, adding this has driven interest in DSOL products for feedstock pretreatment and biodiesel posttreatment. “Pretreatment provides a cleaner feed for improved reaction efficiency as well as a cleaner biodiesel product. Posttreatment can allow plants to run higher temperatures and rates through their filters, easing a potential bottleneck.” As producers ramp up production, bottlenecks arise. “A bottleneck may occur with filtration, especially if chillers are used to cold filter in order to pass the cold soak filtration test,” Sullivan says. “Rather than invest more capital on equipment, filtration rates can be increased by filtering hot with D-SOL.” Reaction rates can be increased by improving

feedstock quality with pretreatment. “Furthermore,” Sullivan says, “water usage or water-wash capacity can be augmented or even replaced with D-SOL.” George Hicks, manager of innovation and development, says, “Continued growth and activity in the industry is exciting and justifies continued investment in product development.” One production trend Hicks sees is producers working to reduce costs while increasing plant throughput. In addition, the use of lower-quality feedstock and feedstock blending have become increasingly popular. “With that, customers are utilizing D-SOL products to aid in cleaning up these lowerquality feedstocks and their finished biodiesel,” Hicks says. Sullivan adds, “Regardless of the feed, we have a D-SOL solution to clean and upgrade the quality of a wide range of feedstocks—to improve process efficiencies and produce on-spec biodiesel.” As producers focus on reducing costs by utilizing lower-quality feedstocks, Hicks says there is much to be learned. “Contaminants can vary immensely in the feedstocks,” he says. “Knowing what type of contaminants are present is critical. With this knowledge you can tell what effects it can have on biodiesel quality and production. Having the right material to remove those impurities is a

The Dallas Group’s manufacturing headquarters PHOTO: THE DALLAS GROUP OF AMERICA INC.

must in order to meet the demand to drive costs down and make a profit.” Dallas Group possesses a suite of products, including a patented process, designed to selectively address specific needs. “We recommend contacting us to discuss your specific situation and what you need to accomplish,” Sullivan says. “With that information, sample analysis and lab testing, we can design a solution that best meets our customers’ needs.” The company continues to innovate and is conducting commercial trials with a new technology that, compared to dry-wash processes, can significantly reduce costs and waste while increasing reliability. “We are excited about the results thus far,” Sullivan says, “and we feel this can provide a step-change for the industry.”

SPOTLIGHT EcosMetique EcosMetique S.L., trading as 3A-Antioxidants, has been in the antioxidants business for 10 years. The company focuses on antioxidants and preservatives for the feed, food and industrial sectors. Company Manager Sergio López says it entered the biodiesel space when developing antioxidants for animal fats and plant oils. Just recently, the company’s OXIBIOL biodiesel antioxidant achieved billing on AGQM’s latest “no-harm” list, a prestigious accomplishment for additives. “It was important because this guarantees our customers that the antioxidant will not leave residues in the biodiesel that could damage engines,” López says. “This opened the doors for all biodiesel producers and we competed on equal terms with our competitors. AGQM only does two tests a year consisting of two phases.” Phase I measures stability increases, additive flash point, ash content, interactions between the additive and biodiesel, engine oil compatibility, filtration and efficiency compared to BHT. Phase II involves a nozzle fouling test. “The process was quite slow,” López says. The OXIBIOL additive contains an oxygen molecule sequestrant, a free radical

BIODIESEL MAGAZINE

stabilizer and a metal chelating agent. The formulation stabilizes the unsaturated fraction of biodiesel. “It is a formulation with a defined concentration based on a standard biodiesel production process,” López says, adding that the customer’s mixing must be taken into account. “The product must be added once the biodiesel has been manufactured, always taking advantage of the transfer to the storage tanks to enable homogenization. The ideal situation would be to have a mixer to incorporate the additive. We have automatic equipment to dose the antioxidant.” The amount of OXIBIOL may vary depending on the type of biodiesel in order to obtain a better homogeneity, López says. “In this sense, the same amount of OXIBIOL is not always required to stabilize the biodiesel. For small amounts of the additive, it may be necessary to dilute it to homogenize better, increasing its yield.” Dosing rates can range between 75 and 200 grams per ton of biodiesel, depending on feedstock and other factors. “They are not very high amounts,” López says. OXIBIOL is liquid at room temperature with a melting point lower than minus 20 degrees Celsius, which, according to López, can help reduce certain energy costs, as well as precipitation problems.

2018 SUMMER EDITION

López

EcosMetique offers technical and advisory services to its clients. “We can analyze the oxidation and stability of raw materials, because it’s important in order to stabilize the final product,” López says. “We also analyze the biodiesel fuel.” The company analyzes many other parameters, including fatty acid profile, iodine index, CFPP and more. “We also advise on the ideal dosing point and, of course, the best dosage of the antioxidant,” he says. “Likewise, EcosMetique is focused on the search for new molecules that allow increasing the performance of the product, as well as ensuring other parameters, such as the corrosion test on copper foil according to [prevailing standards].”

SPOTLIGHT Intertek Caleb Brett Founded in 1885 by Caleb Brett in the U.K., Intertek Caleb Brett delivers assurance, testing, inspection and certification services to refiners, producers, blenders, distributors, consumers and research institutes around the world. Scott Blakely, director of lab services for North America, says the company has more than 500 laboratories in 100 countries. “Intertek is an independent lab network that provides third-party quantity and quality services,” Blakely says. “We participate in numerous technical committees, including ASTM, ISO and EN.” Intertek provides a breadth of commodity fuel testing, including gasoline, diesel and jet fuel, and renewable fuels such as biodiesel and ethanol. Its labs can run both octane and cetane tests and perform full certifications. “We certify biodiesel to the ASTM D6751 spec, so that’s part of our service for custody transfers,” Blakely says. The company provides quality certifications for fuel, such as certificates of analysis, along with quantity inspections for imports or commodity exchanges. “We are customs-accredited for imports,” Blakely adds.

Intertek’s labs are both ISO 9001 and ISO/IEC 17205 accredited, and they are qualified to certify to the BQ-9000 requirements for biodiesel beyond testing to D6751. “We got into biodiesel in the early stages,” Blakely says, “and in 2005 we went all in and pushed our biodiesel testing capability across our network. We’ve seen specifications continue to tighten and quality increase after producers realize they can actually meet the new specs, whether it’s lower monoglycerides or significantly lower cold soak time. We’ve seen manufacturers meet those without issue.” Blakely and Intertek were part of the original industry training of the cold soak filtration test developed a decade ago to combat cold flow issues that plagued the biodiesel industry in the mid- to late 2000s. Blakely says now ASTM is working to approve a new method that can take the cold soak test from one to three days down to just 20 minutes. “Round robins are being formed to get the test method approved,” Blakely says. “It may take another year but it’s progressing well.” Intertek Caleb Brett is most often engaged by those in the biodiesel industry to run a full slate of tests for certification testing. “Most parameters pass easily—flashpoint, cetane, those are typically not a problem,” Blake-

Blakely

ly says. For laboratories, he says, cold soak is perhaps the most challenging procedure due to the long testing time, but others such as the free and total glycerin test are also difficult. “The standards themselves are unstable, but the method has come a long way—especially for monoglyceride content,” he says. “Cetane number is still a high-cost test to run because it uses a very expensive engine.” When people hear the company name Intertek, Blakely says he wants people to think of quality service and independent results. “One of our corporate mottos is precision, pace and passion,” he says. “The best quality fast, and the best service.”

QUANTITY AND QUALITY BIODIESEL SERVICES

TREATING EACH CARGO AS IF IT WERE OUR OWN Since 1885, Intertek Caleb Brett has delivered assurance, testing, inspection and certification services to refiners, producers, blenders, distributors, consumers and research institutes around the world. • Full Expert Quantity and Laboratory Services for Biodiesel Products • Global Laboratory Network ISO 9001, ISO/IEC 17025 Accredited - Certification of Biodiesel to Full ASTM D6751 Specifications - Qualified to Certify Biodiesel to BQ 9000 Requirements

FOR MORE INFORMATION 888 400 0084 / 281 971 5600 cbwnalabs@intertek.com

intertek.com/biofuels/biodiesel

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25 Years of Serving the Biodiesel Industry The National Biodiesel Board is celebrating 25 years of hard work and innovation by those who were driven to make the biodiesel industry what it is today and those who are driven to take this industry into the future. For Governmental Affairs, Communications, Market Development, Technical and Quality Assurance programs, and more, join NBB today. Contact Brad Shimmens, Director of Operations and Membership, at bshimmens@biodiesel.org for information.

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BOARD

www.nbb.org | www.biodiesel.org | 1-800-841-5849

ADDITIVES

ON THE ROAD AGAIN—

LEGALLY

Just over a year ago the future of B20 in California was uncertain, thanks to in-use requirements of the Alternative Diesel Fuels regulation, but as we’ve seen so many times, the biodiesel industry shone in the face of adversity BY RON KOTRBA

The advent of the Alternative Diesel Fuels regulation in California is a lengthy, contentious tale of state agency missteps, legal wrangling and concessions. Some contend the multiyear

tional NOx generation over CARB diesel fuel. So the NBB and the biodiesel industry took it upon ourselves three years ago and solicited help from and worked with a number of different additive manufacturers across the country. There wasn’t a lot of interest in developing a fuel additive to mitigate NOx emissions, or a lot of hope it could be done. It was really the work and foresight of our governing board that provided NBB the opportunity and funding to do the initial research and development of the first approved additive in California.” Fenwick says the first year was spent just reviewing the literature from various additive manufacturers. “What we found is combustion technology is very dependent on so many factors—engine, the duty cycle, things like that,” Fenwick says. “It was a lot of trial and error.” A couple of years and a million dollars later, the first NOx-reducing additive for biodiesel was approved by CARB: Vesta by California Fueling LLC. Since Vesta’s approval in summer 2017, California Fueling has received several more approvals for different concentrations. “The only difference between the products is the treat rate,” says Pat McDuff, CEO. “Vesta is the only technology that actually improves NOx—all other products are on parity with the reference fuel.” McDuff says some of his larger customers using the Vesta additive are Kern Oil & Refining Co. and Renewable Energy Group Inc. Shelby Neal, director of state governmental affairs for NBB, says the entire additive approval process far exceeded expectations. “At the end of the day, Vesta decreases NOx by 1.9 percent with B20,” he says. “On a B100 basis, we see a 9 to 10 percent NOx reduction com-

legal war began as a battle for renewable liquid fuel market share in the lucrative theater of California’s Low Carbon Fuel Standard. Long story short: Ethanol producer Poet LLC filed suit against California Air Resources Board, arguing that its analysis of NOx emissions from biodiesel under LCFS implementation was inadequate. The courts ultimately agreed. The ADF is essentially CARB’s corrective measure to address its initial failure to adequately assess and mitigate any potential NOx emissions increases from biodiesel blends up to 20 percent used in California under the LCFS. Biodiesel is the first ADF subject to the regulation. Renewable diesel has been used in California under the LCFS for years, but it is not considered by CARB to be an alternative fuel. “Renewable diesel consists solely of hydrocarbons, and is therefore considered diesel rather than an ADF,” the agency states. As of Jan. 1, 2018, biodiesel blends from 5 to 20 percent used in California must include an approved NOx-reducing additive, depending on the feedstock and time of year. Higher saturated biodiesel (with cetane values 56 or above) can be blended up to 10 percent without the need for a NOx additive. “This was all completely new,” said Scott Fenwick, technical director for the National Biodiesel Board, referring to the development of NOx-reducing additives. “Biodiesel has a lot to offer, a lot of benefits, and the sole detraction in older vehicles was the potential for addiBIODIESEL MAGAZINE 2018 SUMMER EDITION 20 l

pared to CARB diesel, which is a huge success because CARB diesel is already really clean. So this was a home run for us. It sent a signal that not only can this be done, but it was way easier than we thought. The only reason we got involved was because no one else was interested. The results were so good, everyone else thought, ‘We can do this too.’” In February, Targray, a BQ-9000 marketer and distributor of biodiesel, announced CARB had approved the second NOx-mitigating biodiesel additive compliant with the ADF regulation: CATANOX. In March, Targray began offering its CATANOX additive as part of a fully blended, B20-ready turnkey solution at five of its fuel terminal locations in California—Stockton, Fresno, Bakersfield and two in Los Angeles. Unlike California Fueling and its Vesta product, Targray is not selling CATANOX as a standalone additive, but rather premixed with the B20 Targray already distributes. “Targray is not an additive supplier,” says Olivier Benny, head of marketing and communications for Targray. “Our strategy with CATANOX was to continue focusing on what we do best—creating turnkey biodiesel solutions for retailers, distributors and fleets. With Cali-

PHOTO: RENEWABLE ENERGY GROUP INC.

fornia being such an important market for us, and convenience playing a big part in the value we provide, we felt it was critical for our biodiesel to be fully ADF-compliant. Not having to invest in the additive blending infrastructure has proven to be a very attractive benefit for our California customers.” In early May, REG—the largest biodiesel producer in North America and owner of a 75 MMgy renewable diesel production facility in Louisiana—announced its own unique, patent-pending solution to the California ADF regulation: a blend of biodiesel and renewable diesel it calls REG Ultra Clean Diesel. According to REG, the fuel reduces total hydrocarbons and carbon monoxide emissions by 15 percent and particulate matter emissions by 40 percent, while emitting fewer NOx emissions than CARB diesel. A month later, BQ-9000-certified biodiesel producer, laboratory and marketer Community Fuels, whose production and fuel terminal facilities are located in Port of Stockton, California, announced it was the first biodiesel marketer in the state to offer NOx-neutral biodiesel using the new Best Corp. BC-EC1c additive. Community Fuels intends to provide

NOx-neutral biodiesel for all B99 loaded at its terminal, which plant manager Mitch Bishop says is ideally located to provide reliable, 24/7 biodiesel supply to dozens of Northern California and Central Valley petroleum refiners and terminals, as well as diesel distributors and retailers. “We had the opportunity to test the additive in advance of the CARB approval to ensure the additive would not have adverse effects on biodiesel fuel quality,” says Steven Sabillon, lab manager for Community Fuels. “Based upon our testing results, we are confident that the Best additive will maintain, and possibly improve, the biodiesel fuel quality.” CEO Lisa Mortenson says Community Fuels was not involved in development of the additive, but chose it for “a variety of factors, including, but not limited to, fuel quality and safety and handling.” Ultimately, the real success of this series of events is, 18 months ago, it was uncertain whether biodiesel blends above 5 or 10 percent would be legal for sale and use in California at all, and now there are multiple marketplace options that are affordable, ADF-compliant and effective. It’s the classic biodiesel story—not

just overcoming seemingly insurmountable obstacles, but thriving in the face of them. “I would say the biodiesel industry hit another one out of the park,” Fenwick says. “Regulators in California, along with vehicle and engine manufacturers had a need—they were all concerned about NOx, and this industry stepped up to meet that need. We’ve got multiple CARB approvals now, and the NBB is pleased to see that. We wanted to get this industry kicked off to a good start. We were hopeful, and that’s why we were involved in the first certification—and we are glad to see the industry stepped up to find other solutions.” The industry and NBB are not stopping here though. Neal says now there is a specific process to approve biodiesel blends above 20 percent in California. Fenwick adds, “In the very near future, I don’t think we’ll be constrained to B20, so the question becomes, ‘How high can we go above B20?’” Author: Ron Kotrba Editor, Biodiesel Magazine 218-745-8347 rkotrba@bbiinternational.com

www.BiodieselMagazine.com

PRODUCTS

BIODIESEL

FIRESTARTER

From garage batches to nationwide distribution, Escogo exemplifies American ingenuity and determination as an underdog that took on the establishment and, against all odds, is winning BY RON KOTRBA

Not every day does a man trying to please his family end up launching a highly successful business as a result. But then again, most clichéd garage

he says. “Back then you could sell to individual Whole Foods stores. I was a pain in the neck. When you’re launching a product, you have to sell something before you have it.” Smith says that this particular buyer was instrumental in shaping the product and helping him understand price sensitivity. From that one location, Smith was able to leverage all 23 Whole Foods stores in New England. “I might as well have pasted a dollar on every bottle when I factored in my time and delivery costs,” he says. “But the goal was to pioneer a brand and place it on the shelf.” From there, Smarter Starter Fluid grew into national distribution. “At that point, I had to make a choice,” Smith says, “on what the direction of the company would be.” Struggling to make a profit, Smith wondered how to reduce input costs. Rather than buying biodiesel at retail or wholesale costs at best, he considered several options: installing processing equipment and making biodiesel himself; raising more money; or reaching out to established biodiesel manufacturers and presenting the product, along with the commercial value of diversifying their product portfolio, to them. “I contacted five biodiesel companies— big ones, small ones, and medium-sized ones,” Smith says. One of those “medium-sized ones” was Down to Earth Energy, doing business as Clean Energy Biofuels. “We had been dabbling in the chemicals side of methyl esters and we got a call from this guy, Marcus Smith, who literally set up a business in his garage in 2009 to develop an all-natural lighter fluid for charcoal—one of the elements of which was methyl esters,” says Rick Huszagh, manager and co-founder of Down to Earth Energy. Huszagh’s operation is a 2 MMgy biodiesel production facility in Monroe, Georgia, which began in

startup companies don’t see their product on the shelves of 20,000 stores nationwide either. This is the classic American dream story spiked with a familiar twist of biodiesel industry innovation. And it all started with 2 pounds of chicken. “I like grilling, and my family likes my grilling,” says Marcus Smith, entrepreneur and inventor. “I lit the charcoal with petroleum lighter fluid, like I always did, and barbequed the meat. After one bite my wife said, ‘This tastes like gasoline,’ and dumped it in the trash—2 pounds of chicken wasted. That got the ball rolling.” Smith says in the late 2000s, nonpetroleum lighter fluid couldn’t be found on store shelves. “I thought, ‘That’s crazy,’” he says. “I started messing around with chemistries on my own— combinations of different oils and ingredients. But this was out of my element, so I hired a chemical engineer, which was a huge benefit. Then I came across biodiesel as a component of the formula—it was cost-effective and worked well.” The work began as a hobby job, since Smith was employed full time. “My family and I were making deliveries in the early mornings and on the weekends,” he says. “I never really knew what to make of it.” Farm stands and local stores in New England, where Smith lived, were buying his natural lighter fluid—which Smith aptly named Smarter Starter Fluid. In 2009, Smith got the product into Whole Foods. “I sat down with a buyer at a local store, we talked about my concept and he asked questions about price point, packaging and design,” BIODIESEL MAGAZINE 2018 SUMMER EDITION 22 l

2008. “Marcus needed to get vertically integrated with a manufacturing facility. He visited several other biodiesel companies but they didn’t want to get involved—it was too small-scale for them. I said, ‘This makes sense,’ so we set up another company, brought in another partner to get us the cash we needed to get our bottling lines established, and in 2013 we launched the company.” They named the new venture “Escogo,” which stands for “ester consumer goods.” Huszagh says matter-of-factly, “That’s what we’re selling.” In 2014, the team presented to Home Depot whose Atlanta headquarters is “right in our backyard, just 50 miles away,” Huszagh says. “The buyer came in and gave us 30 minutes. An hour later, he handed us a vendor packet and put us in all the Atlanta stores. That was unheard of. We thought, ‘Well, that was easy!’ Two months later, the buyer said he wanted to roll us out to Home Depot’s Los Angeles and Washington, D.C., stores. Then nearly a year

SUITE OF BIOPRODUCTS: The Clean Energy Biofuels team proudly showcases its two different ester-based lighter fluids with co-founder Rick Huszagh, center, holding its all-new Moonshine Charcoal outside the company’s biodiesel and chemicals plant in Monroe, Georgia. PHOTO: CLEAN ENERGY BIOFUELS

later, on Sept. 9—and I remember the day because it is my birthday—he said he wanted to roll us out to all the Home Depot stores. That was exciting.” Smith says, “To his credit, Rick is the only one who got it, who saw the potential and was willing to take a risk. He is an extremely persistent, determined individual. I got that feeling the first time we met when I toured his plant. He knew everything about his equipment and process, and I knew this was the partner I wanted.” The pure-play biodiesel business is cutthroat and not for the faint of heart. “As a small producer, it’s been really tough,” Huszagh says. “You’re seeing a lot of these plants get liquidated, and if they haven’t developed an oil collection model, they can’t survive without economies of scale.” Clean Energy Biofuels grew its collection business from the ground up and moved beyond just restaurant collections to include industrial clients. Its biodiesel distribution business tackled obstacles by selling blended

product to trucking distribution centers of big-name companies. “We lease land on the distribution center lot, we crane in a 12,000-gallon double-walled tank and drop a card reader on it,” Huszagh says. “The fleets give cards to drivers who can fill up on site and we monitor the level remotely, so when it’s low, we truck in another load. It’s good in that a lot of these distribution centers would rather fuel on-site because it gives them more control rather than having a driver go to a truck stop where they might be there for an hour. They’re also getting better pricing from us too. Right now, at truck stops, sometimes you don’t know what you’re getting. We provide them B5 to B20.” While the biodiesel business has been tough, Huszagh says the long-term relationships his company has built with its customers has allowed him to continue producing biodiesel and selling into the transportation market. “It’s sort of a break-even proposition, and if the dollar comes back—well, that’s what we’re waiting on,” he says. “Also, our fleet is us-

ing a fair amount of fuel, so we’re diversified in that respect.” By being diversified, it has become possible for Huszagh to navigate the biodiesel storm of political uncertainty, RIN manipulations and the yearly vanishing act of the tax credit. “This biodiesel thing is a sickness, an addiction,” Huszagh tells Biodiesel Magazine. “It doesn’t make any sense, but I don’t think Clean Energy Biofuels will ever get to the point of not making biodiesel for transportation, but the less exposure we have on that, the better off we are long-term. Going into alternative chemicals production has given us the stability we needed as a company and has allowed us to grow. If I go to the bank as a biodiesel company, it’s very hard to get equity credit lines or working capital. They ask the same questions as everyone else—‘What’s the history on RINs and the dollar tax credit?’ But now, the banks give us good rates and lines of credit. That was the key reason we had to diversify.” Huszagh says the goal is to divert more than 25 percent www.BiodieselMagazine.com

PRODUCTS

NEW FORMULA: While Smarter Starter Fluid was designed more for lump charcoal, EcoGreen is meant to appeal to the mass market of briquette users. PHOTO: ESCOGO

IN THE BEGINNING: Marcus Smith, inventor of the Smarter Starter Fluid, in his garage where he created his formula, bottled product and from where he made early morning and weekend deliveries.

of the biodiesel plant’s production flow into chemical use in 2019. “We’re on track to do that,” he says. Smith has been selling Smarter Starter Fluid since 2009. “That product is more intended for lump charcoal, not briquettes,” Smith says. “We recently launched our new EcoGreen formula for briquettes, which is patent-pending.” With its briquettes application, EcoGreen appeals more to the mass market than to the “sprouts” type of organic shopper. “That’s how we segmented into two formulas,” Smith says.

PHOTO: ESCOGO

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Escogo’s innovation doesn’t stop at a second, mass-market friendly biodiesel-based lighter fluid. The company is also marketing an all-natural drip-torch fuel. Drip torches are used for controlled burns, and the fuel is typically a mix of diesel fuel and gasoline. “About 10 percent of that doesn’t combust and it gets into the soil,” Huszagh says. “So we’re offering an alternative to that, and we’ve sold quite a lot of it.” Another product that Escogo is coming out with soon also ties into the barbeque market. It’s called Moonshine Charcoal, a matchready briquette, and it is expected to launch in October. “The lighter fluid market is only a $150 million market, but the briquette market is huge,” Huszagh says. “We recently teamed up with one of the largest charcoal makers in the U.S.” He adds that Moonshine Charcoal will soon be offered in one of the largest retail chains in the world. “We’re selling bulk for this,” Huszagh says. “We’re going from sending out cases of lighter fluid to moving 6,000-gallon tanker loads.” The team at Escogo has several other early-stage, biobased products in the works to ultimately curb petroleum use in consumer goods. At the heart of this determination, according to Huszagh, is the environment and the issue of climate change. “That’s the single biggest driver,” he says. “It’s a real issue. We didn’t think it would go dormant, and we know over time awareness will increase.” Looking back on his success, Smith says, “The retail environment is fiercely competitive, so the fact that a small company like ours has gotten as far as we have—fighting those enormous challenges and headwinds—is a testament to my and Rick’s determination in making it happen. We have had tremendous setbacks—and wins—over the years. But Rick is a soldier. He’ll plow through a brick wall, good or bad. He’s a diesel engine.” Author: Ron Kotrba Editor, Biodiesel Magazine 218-745-8347 rkotrba@bbiinternational.com

BIODIESEL MAGAZINE

2018 SUMMER EDITION

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THE LAST WORD

A DECADE DEEP: POSITIONED, POISED & PROSPERING BY JAMIE O’BRIEN

After eleven years spent in corporate America, in 2005 I left at the age of 28 and took a chance to become an entrepreneur. I was operating

a real estate development and marketing business in Boston and Costa Rica. Shortly after the financial collapse in 2008, my business also followed. I lost everything saved and gained and was broke, bewildered and without a plan. My then-partners and I looked at each other and thought, “What next?” I said, “You build me a biodiesel plant, I’ll build it to succeed.” The words of Sir Richard Branson—“If somebody offers you an amazing opportunity but you are not sure you can do it, say yes, then learn how to do it later”—resonated with me. It was here the son of a Boston bus driver and plumber sat, with barely a high school degree and no commodity, energy, trading or logistics experience. With an aggressive 50plus country world travel resume and 11 years’ experience in sales, operations and marketing within Fortune 500 environs, my career in biodiesel was born. Our plant in Tennessee was built, feedstock streams were established and biodiesel offtake agreements were plentiful. The business and plant were running as advertised. I discovered that there was an abundance of opportunity in the overall market, and Universal Green Commodities was born in 2010. An ex-partner of UGC gave me $100,000 to get the company off the ground. I paid back the loan within a year and grew the business organically from there. I remember the first account I secured for UGC. It was a group of Ukrainians from 26

BIODIESEL MAGAZINE

Brighton Beach in Brooklyn gung-ho to take over the NYC used cooking oil (UCO) collection industry. Picture a big Boston Irishman now living in the Hamptons, driving up the Long Island Expressway into Brooklyn to meet this group at 4 a.m. with a certified bank check for $8,000. Back then, risk management procedures for new suppliers was just being there to watch the tanker get loaded with actual UCO from a mountain of 275-gallon totes, and not water from a garden hose. Yep, that was my life for the first five years in business. Traveling the country to different types of characters trying to seek out the credible and gain credibility in a Wild West environment. I’m happy to report that a derivative of that Ukrainian group is still a proud and loyal supplier to UGC today. Moving on to today. Doesn’t this magazine feel thinner? You bet it does. That’s because since biodiesel in the U.S. first became commercially viable in 2006 only the strong, righteous and smart have survived. The flyby-nights, the splash and dashers, gold rushers and criminal elements in the space are, and should remain, a thing of the past. The bipolarity of the burgeoning biodiesel industry and all its inefficiencies, grey-players, legislative challenges and anxiety-attack-inducing market dynamics were, at the very least, crippling and overwhelming for most. Survival in this space requires testicular fortitude and a certain level of crazy, plus the ability to thrive in complicated environments. I congratulate and will forever respect and be amazed by the entrepreneurs who fought a good fight, and for those who are still fighting today. So now we enter a new era, one where the lean and mean embark on another market evolution towards the next decade. Can’t beat us, join us? Yes sir. Coprocessing. When the biggest names on Wall Street send their representatives that look like the Monopoly guy to little biodiesel feedstock events like The

2018 SUMMER EDITION

Jacobsen Conference in Chicago this year, you know change is coming. When Big Oil is reaching out to my boutique trading company to look for guidance, consult and near-future alignment, you know times are changing. Not only is UGC a comprehensive fullservice biodiesel company, but it has focused the past 10 years on developing, shaping, evolving, exploiting, capitalizing and managing the feeding of the machines with low carbonintensity feedstocks. We have transacted with just about every significant remaining low carbon-intensity feedstock manufacturer in the country. We have the reputation and operational know-how. We have mastered the feedstock furnishing business so the biodiesel manufacturers can focus on their core business and aspirations. In closing, UGC isn’t perhaps the most successful, best capitalized, highest market intellect or the largest volume renewable feedstock trading and logistics firm in biodiesel history. However, our network is robust. Our track record is flawless. Our logistical knowhow is refined. Our vision is sharp, our mission is clear, our values are pure, our culture is defined, our entrepreneurial spirit is alive and our market savvy is plug and play. We are the horse you want to back. After a decade in this space, UGC is perfectly positioned for the future of biodiesel feedstock supply solutions and the logistical management associated with getting the commitments we make done. We look forward to the next 10 years of success with our partners, clients and vendors and wish success to all fighting the good fight to sustain and remain relevant in this complex and ever-changing landscape of biodiesel. Author: Jamie O’Brien Founder and President, UGC 617-742-1111 j.obrien@ugcinc.com

PROUDLY SERVING THE AMERICAN BIODIESEL INDUSTRY FOR OVER A DECADE YOUR LOW CARBON INTENSITY FEEDSTOCK EXPERT

Universal Green Commodities Down to Earth Business TM

WHAT WE DO: Feedstock Trade Management Biodiesel Wholesale Distribution Rail Fleet Supply Services Finished Product Marketers Process By-Product Consumer International Trade - ISCC

LOGISTICS EXPERTISE

Bulk Truck | River & Ocean Barge Bulk Ocean Vessel | Liquid Railcar Tankers

LOW CARBON INTENSITY FEEDSTOCKS WE TRANSACT: Tallow – Edible, Tech, BFT Domestic UCO International UCO Yellow Grease Poultry Fat Chicken Fat Lard Choice White Grease Acid Oils Brown Grease Trap Grease

PROUD MEMBERS OF:

National Biodiesel Board

National Renderers Association

American Fats & Oils Association

American Feed Industry Association

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