2020 Summer Biodiesel Magazine

Page 1

2020 Summer Edition

PAINTING A PICTURE Of the US Biodiesel Industry Amid the Coronavirus Pandemic Page 12

Plus US Biodiesel Quality At All-time High

Page 18

And

Technology Tools of the Trade

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CONTENTS 2020 SUMMER ISSUE VOLUME 17 ISSUE 3

FEATURES

12 Pushing Through the Pandemic INDUSTRY

Biodiesel producers were readying for a new year with a renewed tax credit through 2022 when the coronavirus crisis hit, but they are still prepared to expand and deliver

BY RON KOTRBA

18 Proof of Quality QUALITY

A new NREL report using data from U.S. and Canadian BQ9000 producers demonstrates the industry’s unwavering commitment to biodiesel fuel quality

12

BY RON KOTRBA

22 Technology Tools of the Trade SPOTLIGHT

Highlighting CynerSorb, a filterable adsorbent by Imerys for pretreatment of low-quality feedstock, and the Biodiesel Production Technology Summit in Omaha, Nebraska

BY RON KOTRBA

DEPARTMENTS

18

4 Editor’s Note

Industry Rebirth BY RON KOTRBA

6 Business Briefs 8 Inside NBB

22 Advertiser Index

ON THE COVER

In the vein of Andy Warhol’s pop art, we bring a colorful collage of the coronavirus, which has defined spring 2020 for the entire world. IMAGE: BBI INTERNATIONAL

24 7 21 26 15 28 5, 27 6 16 17 2

2020 Biodiesel Production Technology Summit Air Liquide Global E&C Solutions BDI-BioEnergy International GmbH Biodiesel Industry Directory Deep South Commodities, LLC IMERYS National Biodiesel Board Oil-Dri Corporation of America PQ Corporation R.W. Heiden Associates LLC United Color Tech www.BiodieselMagazine.com

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EDITOR'S NOTE

INDUSTRY REBIRTH Ron Kotrba

Editor in Chief Biodiesel Magazine rkotrba@bbiinternational.com

As we worked to finalize this Summer 2020 print issue of Biodiesel Magazine in late June, the collective American biofuels industries awaited release of U.S. EPA’s next proposal for renewable volume obligations (RVOs) under the federal Renewable Fuel Standard, including conventional, advanced and cellulosic RVOs for 2021 and the biomass-based diesel RVO for 2022. In advance of EPA’s pending release of its proposal, at least one mainstream media outlet was reporting that it learned of an appreciable uptick in biomass-based diesel volumes for 2022, which would be welcomed—and muchdeserved—news. EPA has been known to cite the absence of the $1 per gallon federal biodiesel tax credit in its reasoning behind stalling the biomass-based diesel RVO. Now that the incentive is locked in through 2022, there is no excuse to quell growth of biomass-based diesel RVOs in the RFS. Moreover, producers are ready to expand and deliver. Despite setbacks from the coronavirus pandemic, which has been hindering the U.S. economy now for more than three months, biodiesel producers tell me they are working to ramp up production, invest in their operations and expand their footprint in this space. In “Pushing Through the Pandemic,” on page 12, I summarize several of my conversations with producers throughout the months of March, April and May, during the height of the health and economic crisis in the U.S. This spring, many of the biodiesel facilities that idled last year as a result of the prolonged tax credit lapse and market turmoil from EPA’s abuse of small refinery exemptions (SREs) were in the process of rehiring and restarting operations. One such company is W2Fuel, which shut down its two plants in Iowa and Michigan last year. Some industry players, including World Energy and Hero BX, are ready to continue their investments with increased efficiencies and new projects. Others like Western Dubuque Biodiesel, which detailed its new physical distancing measures with us, were already running at high rates despite the downturn, and once the economy recovers it is prepared to employ new technology to expand production. Others yet, like Integrity Biofuels in Indiana, which also shut down last year, are moving in an entirely different direction to make hand sanitizer instead of biodiesel to supply high market demand. While we hear a lot about ethanol plants doing this, it’s a different ballgame for a biodiesel producer. As investments grow and manufacturing ramps up, it is important to note that American biodiesel quality has never been higher. On page 18, in “Proof of Quality,” I detail results of the latest quality report from National Renewable Energy Laboratory. The results are encouraging, and OEMs should take notice. Finally, as we seem to be moving toward more certainty through 2022—at least with respect to soon knowing what EPA proposes RVOs will be through then, and assurance the tax credit is in play for the next two and a-half years—this won’t come without its challenges. On June 18, EPA disclosed 52 pending gap SRE petitions from 2011-’18. At the same time, several oil-state governors are requesting waivers from the 2020 RFS due to economic hardship the pandemic has brought to petroleum companies. While EPA should roundly reject these petitions, only time will tell. Meanwhile, I look forward to continuing conversations with many of you on how your plants and projects are progressing.

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

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S A L E S

Joe Bryan

CEO jbryan@bbiinternational.com

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Tom Bryan

President tbryan@bbiinternational.com

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John Nelson

Howard Brockhouse

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

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Chip Shereck

Senior Account Manager cshereck@bbiinternational.com

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Jessica Tiller

Circulation Manager jtiller@bbiinternational.com

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Marla DeFoe

Marketing & Advertising Manager mdefoe@bbiinternational.com

Dayna Bastian

Social Media & Marketing Coordinator dbastian@bbiinternational.com

Jaci Satterlund

A R T Vice President of Production & Design jsatterlund@bbiinternational.com

Raquel Boushee

NATIONAL

Graphic Designer rboushee@bbiinternational.com

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BusinessBriefs

People, Products & Partnerships

Chimec 6830 and Chimec 6043 were the only two of seven additives tested to pass AGQM’s new no-harm test for biodiesel cold flow improvers (CFIs). The new test procedure, developed by Germany’s AGQM in cooperation with the petroleum and fuel additive industries, is called the NoHarm Test BDFI and consists of two parts. First, minimum requirements such as the additive’s ability to lower the cold filter plugging point, as well as ash content, flash point, total contamination and interaction tests with other CFIs are examined in B100. Additional tests are then performed on a B10 fuel specially developed for the no-harm test. The diesel fuel portion of the fuel blend is already dosed with high concentrations of CFIs and antisettling agents so the additive to be examined is tested in a worst-case scenario.

HollyFrontier Corp. plans to convert its Cheyenne refinery in Wyoming to renewable diesel production and construct a pretreatment unit (PTU) at its Artesia refinery in New Mexico, where it previously announced plans to build a renewable diesel unit. In Cheyenne, the company intends to covert a portion of its existing assets to produce 90 MMgy of renewable diesel at a cost of between $125 million and $175 million. HollyFrontier expects the project to be complete in early 2022. The PTU in Artesia, New Mexico, will cost between $175 million and $225 million and is expected to be operational by mid-2022. It will process a majority of material needed for both of HollyFrontier’s renewable diesel plants.

The Iowa Biodiesel Board presented David May, retiring fleet manager for the Iowa Department of Transportation, with a Lifetime Biodiesel Ambassador and Champion award May March 4. May stands among the early adopters of biodiesel and has become one of its greatest champions. The department has used blends of 5 to 20 percent biodiesel in thousands of its diesel vehicles, without modification, since 1994. May’s military background helped him understand the connection between energy security and national security. Over the years May grew into a true biodiesel advocate, becoming a Biodiesel Ambassador—a program of the National Biodiesel Board. He mentored other fleets nationwide, served as a spokesman with the media, and represented biodiesel at fleet events.

Select ADVANCING BIOFUELS Select® formulated mineral technology is a powerful solution for purification of diesel and renewable diesel feedstocks. It has been proven in refineries to efficiently remove metals and other impurities. Using Select can reduce operating costs and improve feedstock quality.

Partner with us to advance your operation. SGĚGEěHORDKOHTGĚS EOM ĝTKFSPTRKĂECěKON"OKĚFRK EOM 6

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BUSINESS BRIEFS

SCS Global Services has been approved by the California Air Resources Board as a verification body for the Low Carbon Fuel Standard. CARB recently added third-party verification requirements to the LCFS to ensure data completeness, accuracy and conformance with the regulation by participants. In addition, verification for LCFS provides confidence and reliability in reported data for stakeholders, market participants and the public. SCS is the only California-based global verification body for the LCFS program with approved lead auditors located in North America, Central America, Brazil and Southeast Asia. SCS auditors have more than 10 years’ experience in conducting assessments in the low carbon fuels sector.

Orion Energy Partners LP, GCM Grosvenor and Voya Investment Management formed a capital partnership worth $365 million with Bakersfield Renewable Fuels, a “special purpose vehicle” wholly owned by Global Clean Energy Holdings Inc. created to acquire and retrofit an existing petroleum refinery in Bakersfield, California, for renewable diesel production. The project will use a variety of feedstocks including GCEH’s proprietary camelina oil. Primary work on the project will be performed by Bakersfield-based EPC contractor ARB Inc., a subsidiary of Primoris Services Corp. GCEH anticipates renewable diesel production to begin in early 2022. Technology provider Haldor Topsoe said the project will be scaled to produce 230 MMgy.

PHOTO: COVERCRESS INC.

CoverCress Inc., formerly known as Arvegenix Inc., has closed a $5 million follow-on equity investment round to continue its development of a new winter oilseed crop named CoverCress, which enables farmers to grow three crops each two years. This new funding supports CoverCress’ planned commercialization in fall 2021. The investment round was led by Fulcrum Global Capital and Hermann Companies. Other investors include Prelude Ventures, Leaps by Bayer, St. Louis Arch Angels and Prolog Ventures, as well as continued investment from some founders and employees.

www.BiodieselMagazine.com

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NATIONAL

BOARD

Bettering Biodiesel and Renewable Diesel

Donnell Rehagen, CEO, National Biodiesel Board

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The National Biodiesel Board saw 2020 as a fresh start and year of opportunity. Our industry led off the year with a major victory in the biodiesel tax credit, providing certainty and relief for members across the value chain from coast to coast. We also announced our new industry vision that we were so excited about and eager to share, and we still are. At the beginning of 2020, our markets began to reflect our ambitious industry goals. We saw biodiesel production reach more than 130 million gallons in the first month, but enthusiasm was quickly dampened as our nation was thrust into a historic shutdown just a few weeks later. We have seen our member plants struggle with employment decisions and have felt saddened by the severe impacts of the national pandemic across the broader agriculture industry, including animal agriculture, and others. We know our industry and all the industries that support it are essential, and so are all the individuals who work to make this sector so vital. These uncertain times have challenged us to reflect and transition into a new way to live and do business. Family, health and safety have been top priorities for our association, and we wanted to spread that sentiment to the communities being affected by COVID-19. I am proud to see the response from those in our industry stepping up to help in their own ways, from producers donating glycerin for hand sanitizer to organizing fundraisers, supporting local restaurants, and so much more that we have not seen. While the global pandemic remains a focus across every industry, biodiesel and renewable diesel supporters are banding together to help others in need. In Iowa, biodiesel producer Western Iowa Energy and ethanol producer Absolute Energy donated shipments of ethanol and glycerin to be used for hand sanitizer. Similar stories came from Kentucky, where Owensboro Grain donated glycerin for hand sanitizer

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for local homeless shelters; and Illinois, where a partnership between the Illinois Soybean Association and the Chicago Parks District resulted in sanitizer being available for all park staff and other essential workers. Companies in the Northeast are also looking for ways to lend a hand. Newport Biodiesel out of Rhode Island hosted a fundraiser to provide senior citizens with gift cards to struggling local restaurants, providing support for small businesses and food for those in need. In New York, NBB teamed up with the National Biodiesel Foundation and the New York Corn and Soybean Growers Association to provide hot meals sourced from local restaurants to first responders in New York City. During the joint effort, we were able to serve more than 3,100 meals to EMS dispatch centers in Brooklyn and the Bronx, multiple EMS stations, the mechanics of the Fleet Services Division, and other critical FDNY personnel. We will continue to help as much as we can and applaud our members who are doing the best they can in their respective communities. We want people to know we are here for any support and assistance we can provide, so please reach out to us if there is anything we can do to ease the burden during these turbulent times. We are, after all, one big family. Our industry, and our nation, will get through this together. We still fully believe the long-term industry future is bright and we are still striving to meet our achievable goals by 2030. Policymakers around the country are pursuing their own goals to reduce carbon and embrace cleaner-burning fuels. We are excited to share the message that biodiesel and renewable diesel are better, cleaner, and available now! Donnell Rehagen CEO National Biodiesel Board


inside

NBB Progress on Federal Policies for Biodiesel NBB is focused on growth of biomass-based diesel and advanced volumes in the annual Renewable Fuel Standard rulemaking process. The multiyear biodiesel tax credit extension and favorable determinations in trade cases should convince the U.S. EPA to promote achievable growth for biodiesel and renewable diesel this year. “By renewing the biodiesel tax incentive through 2022, Congress sent a strong signal that it supports growth in the biodiesel market,” said Kurt Kovarik, NBB vice president of federal affairs. NBB recently worked with Sens. Joni Ernst, R-Iowa, and Chuck Grassley, R-Iowa, to ask the Internal Revenue Service to speedily process payments to producers. In prior annual RFS rules, EPA has noted that the tax incentive fuels growth of domestic biodiesel production and increases its competitiveness with imported renewable fuels. NBB also defended fair trade orders to support U.S. biodiesel producers. In mid-May, the U.S. Department of Commerce published its final determination in “changed circumstances” reviews of Argentina’s biodiesel subsidization. In July 2019, the commerce department proposed to virtually eliminate countervailing duties for Argentina. Since then, NBB’s Fair Trade Coalition has engaged in meetings with U.S. trade officials and submitted factual information about the impact of Argentina’s subsidies for its biodiesel producers. The commerce department finally determined that no change was warranted in existing antidumping and countervailing duty rates on Argentine biodiesel. EPA has also noted the role of these trade protections in ensuring that U.S. producers and consumers benefit from increased RFS volumes. Congress scheduled an advanced biofuel increase of 500 million gallons in RFS volumes for 2022. For 2023 and beyond, EPA will be responsible for setting RFS volumes and evaluating growth opportunities. NBB will argue that the biodiesel and renewable diesel industry is prepared to meet the statutory growth in advanced biofuel volumes for 2022, and it is ready to continue growth well into the future. NBB is also working to ensure that RFS volumes will not be rolled back through small refinery exemptions. Beginning in 2017,

EPA rapidly ramped up the number of these exemptions and undercut demand for hundreds of millions of gallons of biodiesel. For the 2020 rule, EPA changed the RVO formula to include projected gasoline and diesel gallons exempted for small refineries, thereby accounting for the expected shortfall in annual biofuel use. The change resulted from a petition by NBB and other biofuel groups and a unified industry campaign to demand transparency and accounting in the RFS program. NBB will ask EPA to maintain the new method to account for any 2021 small refinery exemptions. NBB is also seeking clarity around future exemptions. In January, the U.S. Court of Appeals for the Tenth Circuit struck down several 2016 and 2017 small refinery exemptions, ruling that EPA exceeded its authority in granting them. NBB is working with a coalition of biofuel groups to pursue a corresponding court challenge to all the exemptions EPA granted in 2018, which would further limit EPA’s use of the exemptions. In June, NBB wrote to EPA Administrator Andrew Wheeler to ask that he apply the Tenth Circuit standard to all small refinery petitions. Opening more market space for biodiesel and renewable diesel through the RFS is an important step in achieving NBB’s 2020 vision for continued growth of the industry.

www.BiodieselMagazine.com

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insideNBB

Biodiesel Leaders Gather for 1st Virtual Membership Meeting Biodiesel advocates met virtually this summer for the first time as the National Biodiesel Board hosted its annual summer membership meeting June 22-24. This year’s meeting focused on integral association business and critical federal policy initiatives through individual webinars open to all involved in our member companies. “We want to thank each and every one of our members who attended our first virtual meeting and helped us continue the biodiesel and renewable diesel conversation,” said Donnell Rehagen, NBB CEO. “Like any other meeting in Washington, D.C., personal advocacy is vital to the future success of the industry and strategic policy efforts. Even though we met from afar, our members were still able to make an impact on the Hill.” Meeting with elected leaders is one of the key reasons NBB meets with its membership each year. During the meeting, NBB organized more than 80 virtual teleconference Hill visits for members to meet with their representatives in Congress. These visits help the biodiesel industry create strong relationships with those fighting for

biodiesel and renewable diesel on the Hill and aid in moving the needle in terms of policy progress. “Nothing beats constituent-to-member conversations when it comes to making connections with policymakers,” said Kurt Kovarik, NBB vice president of federal affairs. “It’s important for members of Congress to hear first-hand about the importance of the biodiesel industry so that we can collectively advance and continue to make biodiesel better, cleaner, and available now.” In addition, members heard from association leadership, key staff and other subject-matter experts on topics ranging from feedstock availability, governmental affairs, carbon neutrality, fuel quality, brand marketing and so much more. If you are not currently a member of NBB and would like to attend and participate in future events, contact Brad Shimmens, director of operations and membership, at 573-635-3893 or bshimmens@biodiesel.org to join NBB.

(Virtual) Business as Usual Throughout these uncertain times, the National Biodiesel Board has worked collaboratively to continue getting essential business done on behalf of the industry. Like many others, NBB has made virtual face-to-face communication amongst the team, with members and key stakeholders a top priority in place of in-person efforts. “Even though the NBB team has had to do things a little differently than normal, each staff member has still had their sleeves rolled up and boots on the ground tackling important industry issues to keep progress moving,” said Doug Whitehead, NBB chief operating officer. “NBB still has the same optimism shared early in the year and remains diligent in achieving the ambitious goals stated in our new industry vision.” During state stay-at-home orders, NBB continued business as usual attending more than a dozen virtual conferences, holding numerous online meetings and hosting more than 10 educational webinars. NBB also wanted to aid in providing educational content for parents and students through new, innovative homeschool resources including biodiesel worksheets, videos and hands-on activities. In addition, NBB amplified social media content to celebrate National Biodiesel Day, Earth Day and World Environment Day, sharing with consumers how biodiesel plays a vital role in providing cleaner air for all. To signify the importance of NBB’s better, cleaner, now messages, NBB also created a new presence through an online platform called Medium. Don Scott, NBB director of sustainability, will be the expert of the account, reiterating the biodiesel industry’s role in 10

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providing a better and cleaner tomorrow. Medium is the home to thousands of independent voices, now including Scott’s, and has more than 120 million readers. This new account is just one of the many ways our communications team continues outreach and spreads accurate information to key audiences. Partnerships and relationship-building still remain vital to NBB. Through continued sponsorships and a variety of web-based speaking engagements, NBB ensures that biodiesel messages continue being heard by key audiences and that the industry is pressing forward, virtually creating necessary rapport. Key leaders in the industry represent biodiesel and renewable diesel through ongoing efforts and meetings with the American Soybean Association and United Soybean Board, California Air Resources Board, BQ-9000 producers, member companies across the supply chain, and many others. While some things have changed, the industry can be sure its trade association staff is still engaged and “on the move” representing biodiesel and renewable diesel—one conversation at a time.


insideNBB

HBIIP Increases Opportunity for New Market The newly announced USDA Higher Blends Infrastructure Incentive Program provides sincere promise to the biodiesel, renewable diesel and Bioheat industry. With intentions to make up to $100 million available under cost-sharing grants, with $14 million reserved to support biodiesel and renewable diesel blending, there is a great opportunity for the industry to finally reach a long-demanded market and achieve industry goals. “This infrastructure program is sorely needed for the biodiesel, renewable diesel and Bioheat market,” said Paul Nazzaro, NBB supply chain liaison. “We greatly need this program if we are going to move any product to growing regions to meet industry demands.” The grants of up to 50 percent of eligible costs or $5 million are designed to help distribution facilities install or retrofit infrastructure necessary to sell higher biodiesel blends such as B20. “There is currently a deficiency in infrastructure, and this new program has the opportunity to put grant money in the hands of terminal operators, transloaders and many others essential to moving product, to make this new market opportunity a reality,” Nazzaro added. Grants are available to vehicle fueling facilities, fleet facilities, fuel terminal operations, midstream partners and distribution facilities. USDA aims to distribute approximately 150 awards and provide cost-sharing to 1,500 locations. “We need to get the industry balanced across the nation,” Naz-

zaro said. “Our infrastructure has to go where the volume is. The Northeast and Mid-Atlantic regions alone have the potential of growing to be a 7 billion-gallon industry by 2050 when including home heating, and commercial and industrial markets. This growth is not only critical to our industry, but it is also important to the environment and current climate.” With access to advanced biofuels such as biodiesel, renewable diesel and Bioheat, the industry can drastically reduce harmful emissions, which is more essential now than ever. The environmental benefit of reducing lifecycle greenhouse gases by 86 percent alone makes this infrastructure need a necessary choice. NBB thanked USDA and Secretary Sonny Perdue for supporting farmers and biodiesel producers. HBIIP will help the industry expand consumers’ access to cleaner, better transportation and heating fuels now and in the future. To apply for the 50 percent cost-share grants, visit usda.gov and submit an application by Aug. 13.

Better. Cleaner. Now! Last year, the National Biodiesel Board undertook a formal strategic planning process to not only set a clear vision, but also to launch a new tagline that would help with future messaging. At the 2020 National Biodiesel Conference & Expo, NBB announced the new tagline—Biodiesel: Better. Cleaner. Now! The new campaign is aimed to drive the narrative about the myriad of ways that biodiesel and renewable diesel are a better choice for consumers, policymakers and the environment. “Biodiesel and renewable diesel are more important now than ever,” said Kaleb Little, NBB director of communications. “As the world faces a unique and historic time, many people are turning their focus to ways to improve health and the environment for the future, while at the same time trying to boost the economy. Biodiesel and renewable diesel are already working to provide clean air and stimulate communities nationwide.” Biodiesel plays a vital role in reducing emissions and providing cleaner air across the country. In fact, biodiesel has nearly 80 percent fewer lifecycle greenhouse gas emissions than petroleum diesel. Biodiesel also supports 60,000 American jobs. For every 100 million gallons of biodiesel that is produced, the industry creates 3,200 jobs. So, as biodiesel grows, so does its job-creating ability. Biodiesel production impacts more than just the biodiesel industry. As diverse as its feedstocks are, so too are the sectors that biodiesel production impacts economically. Biodiesel drives economic benefits for

manufacturing, service, transportation and agriculture, to name just a few. “Today, biodiesel users have more options than ever when it comes to buying biodiesel,” said Scott Fenwick, NBB technical director. “Whether it is a petroleum distributor sourcing biodiesel or a consumer looking for a pump, finding biodiesel has never been easier. If the local retailer does not provide biodiesel at the pump, ask the petroleum distributor and if the request is not granted, then change to a distributor who will. Once distributors realize there is a demand and that biodiesel is a valuable addition, they will make it available to consumers.” Little added, “The industry worked hard to make biodiesel better, cleaner and available now.” Audiences can expect to see more of this messaging throughout 2020 and beyond as NBB tries to simplify the many reasons that biodiesel deserves support and should be viewed as the fuel of choice for diesel platforms. NBB welcomes the use of this messaging in day-to-day communications as the industry works to improve and reshape the way Americans view biodiesel. www.BiodieselMagazine.com

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PUSHING THROUGH THE PANDEMIC Several U.S. biodiesel producers share their experiences during the height of the coronavirus crisis, painting a picture of the industry’s health during these uncertain times BY RON KOTRBA

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Despite the onset of U.S. lockdowns from the coronavirus pandemic initiated in March, U.S. biodiesel production rose slightly that month over February. Biodiesel produc-

tion in March hit 151 million gallons, 19 million gallons higher than February’s volumes, according to data from the U.S. Energy Information Administration. In addition to the burgeoning health and economic crisis that began in the U.S. in March, many biodiesel plants that idled production in 2019 due to the prolonged federal tax credit lapse and copious small refinery exemptions (SREs) relieving oil companies of their obligations under the Renewable Fuel Standard had not yet restarted by March, and none of them had received their retroactive tax credit refunds for 2018-’19 from the IRS after the incentive was reinstated in late December. U.S. biodiesel production volumes this March did not just increase over February despite the health crisis, lack of online operating capacity and absence of working capital, but they also exceeded volumes for the same month in the previous two years. Although an uptick of 19 million gallons in one month may not seem like much, when annualized this small increase is more than 200 million gallons. Historical data also show that U.S. biodiesel production doesn’t typically ramp up until the warmer months.

2020 SUMMER EDITION

This slight production increase does not include renewable diesel production nor imports. Interestingly, after two years in a row of U.S. biomass-based diesel imports declining since the peak in 2016 that initiated tariffs on Argentine and Indonesian biodiesel, imports grew 26 percent in 2019 to approximately 414 million gallons, according to EIA data. The majority of biomass-based diesel imports in 2019 came from renewable diesel imports, which since 2015 have been sourced exclusively from Neste’s Singapore plant, and rose 49 percent to a record of more than 260 million gallons last year. With the economy shut down this spring and stay-at-home orders in effect, the energy complex took a beating. Gasoline consumption dropped by historic levels. In one week alone in late March, gasoline consumption dropped nearly 30 percent compared to the week prior—and it only got worse in April. With gasoline demand down such sharp levels, crude oil storage space was running out. Offshore tankers were being used for storage and the energy crisis came to a head in April when crude oil traded at minus $37 a barrel. One oil and gas industry source told Biodiesel Magazine that the energy complex in April was a “giant dumpster fire.” As gasoline demand eroded, so did ethanol demand and production. Ethanol plants across the U.S. began shutting down, some permanently and others temporarily, causing a crisis in


INDUSTRY the heartland. Unfortunately, this came in the wake of one of the worst years for ethanol demand destruction in the U.S. as the EPA—the agency in charge of administering the nation’s Renewable Fuel Standard—granted a record number of SREs under the program, including 31 on a single day last August. “Ultimately, the ethanol industry is going to go through some of what we in the biodiesel industry have gone through,” Gene Gebolys, founder and CEO of World Energy, told Biodiesel Magazine in late March. “They’ve been limping along with excess capacity, which now must be rationalized. These companies are taking a beating, so the likelihood rationalization will occur in the ethanol industry is pretty high.” While gasoline and ethanol demand fell to record lows, the diesel-powered supply chain rolled on. “Stuff still needs to get consumed, whether that’s heads of lettuce or toilet paper,” Gebolys said. Biodiesel producers, however, are not unscathed by the crisis. For one, while diesel demand remained steady or even slightly higher through the spring, prices fell, challenging biodiesel blending margins—even with the $1-per-gallon tax credit in effect. Secondly, under the RFS program, the obligated parties’ (oil companies’) renewable volume obligations (RVOs) are percentages based on projected gasoline demand and production. When actual production and demand fall short, so will the volume of ethanol and biodiesel that are required to be blended in the motor fuel pool. “Demand for compliance credits will be off proportional to the demand for fuel,” Gebolys said. “The other indirect impact will be on nesting, in the advanced category,” Chris Peterson, president of Hero BX, told Biodiesel Magazine in April. “Specifically, obligated parties deal with the ethanol blend wall by over-blending biodiesel to make up for the shortfall in D6 RINs. Now, with the absolute destruction of gasoline demand, the D6 requirement will be much smaller, so they will not need the excess D4 RINs to make up for this. We’ll feel the pain too in RIN compliance and valuation. Luckily the crisis has not hit us nearly as strong yet as it has the ethanol industry. It’s coming though, hanging over our heads, so we need to be cognizant of this. One piece of recent good news in the midst of all this is the Trump administration is not challenging the Jan. 24 court ruling on SREs, so this should prevent more widespread use and abuse of SREs in

Despite the pandemic, World Energy’s coming years. The current issue with gasoline demand will certainly have an impact though, short-term goals for 2020 include moving and it will play a role in what biomass-based forward with the $350 million expansion of its renewable diesel refinery in diesel demand will look like for Paramount, California, which the 2020, for sure.” company announced in 2018, Third, what have historically and doubling down on the combeen lower-cost, lower-quality mitment to making its biodiesel feedstocks such as used cooking plants as efficient as possible. oil (UCO) and distillers corn oil “There are improvements we can (DCO) are rising in value due to still bring to those assets,” Gebolwaste feedstock demand for low ys said. “I may be in the minorcarbon intensity biodiesel and reity thinking that biodiesel is still newable diesel in carbon markets quite alive and well. There is this such as California and elsewhere Gebolys perception that renewable diesel on the West Coast. More recently, will replace biodiesel. I don’t think with restaurants—and ethanol plants—shutting or slowing down due to the so. We will continue to invest in our biodiesel coronavirus pandemic, less UCO and DCO plants, and in biodiesel in general.” are being produced. Hero BX World Energy “We’ve had our belts tightened for the When the pandemic hit, Gebolys sent better part of two years, watching our pennies, a memo to his staff, saying, “At least we are and in the short term we will continue in that battle-tested.” Last August, World Energy an- mode,” Peterson said in mid-April. According nounced it was shutting down three of its five to Peterson, Hero BX owner Pat Black strives operating biodiesel manufacturing plants in to provide stability for his staff to assure them Georgia, Pennsylvania and Mississippi due to with confidence that, no matter what happens, poor market conditions resulting from the pro- paychecks will be issued and medical benefits longed tax credit lapse and EPA’s prolific grant- will stay in place. ing of SREs. Its two other operating biodiesel Like millions of other businesses trying to plants in Hamilton, Ontario, and Houston, survive the historic pandemic, Hero BX utiTexas, would continue running, along with lized tools provided in the $2 trillion CARES its renewable diesel refinery in Paramount, Act, such as the Paycheck Protection Program. California. World Energy’s two nonoperational “With the PPP and the added unemployment projects in Sombra, Ontario, and benefits, hopefully people find Estill, South Carolina, were effecthe help and support they need,” tively put on hold. Peterson said. “The government “We were bringing our plants seems to be working overtime to back online that we shut down in get dollars in people’s pockets.” Georgia, Mississippi and PennHero BX’s vendors and cussylvania when this hit,” said Getomers have helped the company bolys, referring to the coronavirus get through the tough period afpandemic. By late March, the 18 ter the tax credit was reinstated MMgy Georgia biodiesel plant— last December and after the World Energy Rome at U.S. Biopandemic hit, but before the tax Black fuels Inc.—was running again. In credit refunds were disbursed in Natchez, Mississippi, the compamid- to late April. “Customers ny was waiting for the annual rise of the Missis- are paying us ahead of time while our vendors sippi River to subside before restarting the 72 are stretching payment terms on feedstock MMgy facility there, since this impacts supply purchases,” Peterson said April 9. “They, and chains to and from the site. The river was ex- we, see a light at the end of the tunnel. It’s just pected to crest in Natchez at 57 feet by early to a matter of time.” Peterson said the company mid-April. “In any case, the plan has been that is “extremely pleased” the blenders tax credit the Pennsylvania plant (the 45 MMgy World is in effect three years forward. “We’ve never Energy Harrisburg in Camp Hill) would be the had that,” he said. “With that confidence last one up,” Gebolys said. and knowing this going into transactions, www.BiodieselMagazine.com

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INDUSTRY Mr. Black is [committed] to growing the of an extended maintenance turnaround footprint of our company in this space. anyway, but this has slowed us down a bit And we are taking steps to execute this.” and pushed back our restart plan.” When asked about if and how Hero Last August, Strom made the tough BX’s plans for 2020 have been disrupted decision to idle W2Fuel’s plants after EPA by the health crisis and economic downgranted 31 SREs and after more than a turn, Peterson said, first and foremost, he W2Fuel’s 15 MMgy biodiesel plant in Adrian, Michigan, is expected year and a half without the biodiesel tax be running again in June and at or near capacity in July. hopes as many people as possible remain to credit. When the tax credit was retroacPHOTO: W2FUEL healthy, and that this unfortunate pantively reinstated in late December for the demic goes away sooner rather than later. He said Hero BX’s flagship two lapsed years of 2018-’19 and three years forward through 2022, it biodiesel production facility in Erie, Pennsylvania, a 50 MMgy plant, “was a welcomed site,” Strom said, adding that W2Fuel is investigating has remained operational, as well as its 20 MMgy facility in Mounds- diversification for the future. But at the start of 2020, Strom was cauville, Alabama. tiously optimistic about the next three years. “I knew going into the In May 2018, Hero BX began a tolling arrangement with Iowa start of the year, however, there would still be a bit of a ‘hangover’ on Renewable Energy in Washington, Iowa. Peterson said IRE was not RINs due to the SREs—there wasn’t going to be a lot of RIN demand, running April 9, but the facility has been operating sporadically and which I figured would hold through most of the first quarter,” he said. planned to ramp up and run more consistently by May. “So rather than race to start up and get into a price war in a buyer’s In summer 2018, Hero BX acquired the former Midwest Bio- market, we made the decision to do some much-needed maintenance diesel Products facility, an idled 12 MMgy biodiesel plant in South and upgrades. We thought it was a perfect time to do it.” Roxana, Illinois. After Hero BX purchased the plant, the original plan Sacrificing a few months to optimize its biodiesel plants, rather was to make it multifeedstock-capable and slightly increase capacity than jumping right in as fast as it could to compete against producers from 12 to 15 MMgy. But once the company dug into the engineer- whose margins and quality were more finely tuned from operating ing, it soon realized the cost difference to move from 15 to 20 MMgy consistently over the past 30 months, is “where we were,” Strom said. was negligible. “We’re finishing final engineering for South Roxana,” “Then the pandemic hit.” Peterson said in April. “As soon as the weather and the pandemic allow, The economic fallout from the health crisis and unattractive biowe will be putting construction people to work.” He said the project is diesel blending margins due to low petroleum prices have taken a hit planned for completion by end of summer 2021. on demand, Strom said. “It wouldn’t be as bad if we still had contracts In September 2018, Hero BX acquired the former Clinton Coun- in place,” he said. “We were out of position by not having contracts in ty Biodiesel facility in Clinton, Iowa, from Tenaska Commodities. place early enough. Once heating oil prices dropped, any margins we Named Hero BX Iowa, the facility was running at drastically reduced had [were wiped out]. Until market equilibrium comes back, or until production rates last fall, but Hero BX has been retrofitting the site we get our contracts in place, it will be tough.” to handle feedstock with higher free fatty acid content. Peterson said He mentioned recent petitions by a handful of governors from the last step to the retrofit is installation of an acid esterification unit, petroleum-producing states to waive oil companies’ 2020 RFS obliwhich was scheduled for completion this spring. gations. “Oil companies are suffering, and they want complete relief With low carbon markets soaking up available recycled feedstock from the RFS,” Strom said. “But we’re in the same boat. If they get and the health crisis limiting output of UCO, Peterson said Hero BX relief, it will only shift their pain onto us. When their demand goes is making adjustments. “We’re running heavier rations of soy oil,” he down, our demand goes down.” said. “That’s what is available. Margins are thin at best, if not slightly This spring W2Fuel began the rehire process of the dozens of pernegative. They may not cover depreciation costs, but they may slightly sonnel it laid off in August. “From the time we shut down to [early cover the cash price paid. It’s a push. We’re not in a big hurry to go May], I’ve brought back the first wave,” Strom said. As existing concrazy and run at capacity. But we are getting the bugs worked out and tracts between biodiesel producers and buyers begin to expire, and keeping people working so that when the markets turn positive, we are once the market stabilizes, Strom says he will be in position to lock in ready to run. Instead of spending time commissioning and bringing supply agreements. “Customers call me on a regular basis, wondering operators off unemployment, we can hit the ground running.” when they can start taking product—and I’m anxious to start giving Peterson said the company is actively searching for new acquisi- it to them,” he said. tions. “We are even looking at maybe a new plant build or two,” he W2Fuel received its refund from the retroactive biodiesel tax credsaid. “We are very bullish on biodiesel. We believe certain separate it April 16, right at the 60-day mark from the date it was filed, accordgeographies in the U.S. are underserved and additional production ing to Strom. “That was a great feeling,” he said. “The vast majority of assets are needed.” it had to be paid out. When you go two years without it, you’ve got a lot of tax credit shares you have to pay out [to customers and vendors], W2Fuel not to mention repaying investors back that kept us rolling through“It’s frustrating, but we’re doing the best we can,” W2Fuel Presi- out that time. Then you have to make sure you’ve got the capex in dent and CEO Roy Strom told Biodiesel Magazine in early May, re- place to keep the machines running for the next three years. And cash ferring to the coronavirus pandemic and how the crisis is affecting reserves.” Strom asserted that he is fully committed to running for the the restart of his 15 MMgy biodiesel plant in Adrian, Michigan, and next few years. 10 MMgy facility in Crawfordsville, Iowa. “We were in the middle Strom said he anticipates his two plants operating in June and 14

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2020 SUMMER EDITION


running at capacity by July. “If something comes up and stops us— those in our lab. Lab personnel get their mail through a window slot. well, I can’t control that,” he said. “We just want to get back to run- This way, if someone has the virus, we are reducing the chances they’ll ning. And we want to see this virus go away tomorrow.” give it to someone else.” Brooks noted that Western Dubuque Biodiesel implemented these changes before the authorities issued Western Dubuque Biodiesel procedures. “We wanted to be overly cautious,” he said. Biodiesel Magazine spoke with Tom Brooks, general With spring fuel demand nosediving due to stay-atmanager of Western Dubuque Biodiesel, in mid-May home orders, Brooks said he is worried about how this about how the coronavirus pandemic and the economic will affect RVOs later this year and next. He is particularly downturn are affecting operations at his 33 MMgy bioconcerned for those biodiesel producers that did not lock diesel production facility in Farley, Iowa. “We had to in forward sales. make changes to how we load trucks, and how we deal “I sold all of my gallons for 2018 in one day in Nowith drivers and even our own employees,” he said. “A lot vember 2017,” he said. “The same happened in late Deof changes have been made because of the coronavirus, cember [2019] when the tax credit passed, I sold all my and we plan to leave them in place—even after the pangallons [through most of 2020] at a profit. If you don’t Brooks demic is over.” have forward sales, you’re going to take a beating when Brooks said before the virus outbreak, truckdrivers RIN prices drop.” servicing Western Dubuque Biodiesel would enter the office to provide Hedging is a necessity to be successful and profitable with forward paperwork and had access to the employee breakroom and bathroom sales contracts, according to Brooks. “The downside of hedging is you facilities. “That’s not allowed anymore,” he said. “We now have a win- need money to make margin calls,” he explained. “It’s not simple. It’s dow slot through which they can put the paperwork, and we provide a complicated process.” [portable toilets] for them outside to mitigate the possibility of them Western Dubuque Biodiesel learned the hard way how to navigate spreading the virus to our employees. They pretty much stay in their this process in 2010 when several market factors coalesced, ultimately trucks the entire time now.” resulting in a shakedown in the biodiesel industry. Today, however, It’s not just truckdrivers at Western Dubuque Biodiesel following Brooks seems to have mastered the risk management aspect of running new social distancing protocols. “Our plant personnel do not go into his biodiesel plant. “We’re running like gangbusters,” he said. cross-contaminated areas at all,” Brooks said. “Plant workers stay in the Before the pandemic hit, Western Dubuque Biodiesel began evaluplant, loadout personnel stay in the loadout area, and the same with ating a new technology to expand production. This has been put on

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INDUSTRY hold, however, as a result of the health crisis. Board members have opted to redistribute money back to shareholders rather than reinvesting in plant expansion, Brooks said. Despite operating at high capacity right now, Brooks said the ongoing crisis is giving his employees extra anxiety. “Our employees are smart and in-tune with what’s going on,” Brooks said. “They ask me, ‘Will they change the RVOs?’ and ‘Are we able to run late into this year?’ I don’t know the answers, and that causes anxiety.” The long-term effects of social distancing are also anxiety-producing. “Employees can’t just go to work and come home, go to work and come home,” he said. “If they aren’t going out and enjoying themselves, this has an effect.” The silver lining of all this, according to Brooks, is that social distancing in some respects is good—from the standpoint of the flu, for instance. “It also allows companies to look at efficiencies and make them better,” he said. “If they can become more efficient in tough times, then they can operate with better margins in great times.” After 25 years in this industry, Brooks said he’s seen good times and bad. “This too will pass, hopefully sooner rather than later,” he said. “If we keep a positive attitude and weather the storm, we’ll come out on the back end of this better as a company—as an industry. It will not be without pain, there will be growing pains, but we’ll be stronger as an industry if we can weather this together.”

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REG While COVID-19 has had little impact on U.S. diesel demand, the nation’s largest biodiesel producer, Renewable Energy Group, reported in its Q1 financials that the pandemic has significantly impacted feedstock markets. Cynthia Warner, president and CEO of REG, opened the Q1 earnings call April 30 with a discussion of how REG is being impacted by COVID-19. She said REG realized a strong EBITDA in Q1 “despite the considerable market turmoil from the onset of COVID-19 and the freefall in oil prices.” Warner confirmed REG’s operations are considered to be essential business during the pandemic, and full operations were maintained during the first quarter. She said REG took early action to mitigate the impacts of the pandemic. “We activated our newly formed COVID-19 emergency response team, or ERT, on a highalert basis in January to begin monitoring the situation and planning for possible contingencies should the virus spread globally,” Warner said. “As the pandemic has unfolded, the ERT guides the company in taking decisive action. They provide our leaders with daily tracking and situational updates, as well as crisis-related services, such as orchestrating the distribution of critical PPE across the company.” REG has adopted practices in line with CDC guidelines for sanitation, travel restrictions and social distancing, Warner added. This includes moving all office-based operations to remote work. At REG refineries, the company

2020 SUMMER EDITION

implemented social distancing, extra sanitation practices and proactive quarantine measures. “In order to reduce anxiety, better support our employees and encourage precautionary quarantine when warranted, we granted all of our employees an extra 80 hours of paid time off as needed in order to deal with health or family issues related to the virus,” Warner said. She discussed the turnaround that was executed at the company’s Geismar renewable diesel plant in April. “A turnaround under normal circumstances is complex, but especially so in the context of a virus outbreak in Louisiana,” Warner said, adding that the team applied stepped up health control practices including daily health checks for workers, increased PPE requirements, and several carefully planned separation measures. “This enabled us to carry out the essential work with zero safety or health issues to date,” she said. Warner confirmed that REG has been impacted by fuel demand destruction, but said she believes the company is in a relatively resilient position given the primary use of fuels it produces. While EIA data showed gasoline demand down 50 percent and jet fuel demand down 70 percent, diesel demand was relatively stable during the first quarter. The impact REG experienced most in Q1 related to feedstock disruption. Warner said restaurant closures have resulted in a 45 percent reduction in the availability of UCO. In addition, significant plant closures in the ethanol industry has reduced DCO supply by


an estimated 55 percent. Rendering plants are also being impacted by COVID-19, with the supply of animal fats down by an estimated 50 percent. Soybean crush levels, however, have increased. Warner said feedstock pricing has been extremely volatile. REG produced 121 million gallons of biodiesel and renewable diesel during the quarter, an increase of 4 percent over Q1 2019. Revenues of $475 million were essentially flat, impacted by lower selling prices due primarily to significantly lower ULSD prices, which declined 21 percent; a 14 percent decrease in gallons sold; and a 10 percent decrease in average D4 RIN prices. These negative impacts were mostly offset by a $68 million increase due to the tax credit being in effect throughout Q1.

Hand Sanitizer The global health crisis has caused a shortage of hand sanitizer. Given two of the main ingredients in hand sanitizer are alcohol and glycerin, both ethanol and biodiesel producers have stepped up to the plate to meet the high demand. In late March, Western Iowa Energy was recognized by the Iowa Renewable Fuels Association for its donation of glycerin to the state of Iowa for use by Iowa Prison Industries to produce hand sanitizer during the national shortage. In mid-April, Brad Wilson, WIE president and general manager, told Biodiesel Magazine, “We are holding in there given that sales demand is down, and values are down. It doesn’t look good given the issue with a few governors wanting the RFS to be waived due to hurting big oil margins. We are lucky to have a strong balance sheet to help weather the storm.”

In Indiana, Integrity Biofuels shut down last November due to poor market conditions and policy uncertainty surrounding the tax credit lapse and SREs. In late May, Biodiesel Magazine reached out to John Whittington, owner of the closed 6.4 MMgy biodiesel plant in Morristown, Indiana, to see if he planned to restart. Whittington said the plant is converting from biodiesel manufacturing to hand sanitizer production to help with the national shortage. More details are expected in June. In the end, the biodiesel sector is a small part of a big energy complex, and that energy complex will be different when this is all over, Gebolys predicted. “You can’t go through this level of bloodletting and it all be the same afterwards,” he said. “So, as happens in downturns the strong will get stronger, and my guess is there may be a fair bit of consolidation in [the oil] sector too.” Meanwhile, the U.S. biodiesel sector—an essential service—has fared about as well as any industry could during this global crisis. With the supply chain infused with billions of dollars in retroactive tax credit refunds from the past two years, in addition to federal stimulus money to keep people employed and businesses operating, U.S. biodiesel producers are ready, willing and able to ramp up production and invest in their operations to optimize, expand and deliver like never before. Author: Ron Kotrba Editor in Chief, Biodiesel Magazine 218-745-8347 rkotrba@bbiinternational.com

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PROOF OF

QUALITY

A new biodiesel fuel quality report suggests the North American biodiesel industry has learned the lessons of its past BY RON KOTRBA

PHOTO: JENNA HIGGINS ROSE, IOWA BIODIESEL BOARD

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QUALITY

U.S. biodiesel fuel quality has been on an ever-increasing trajectory upward since the darkest days of its past in 2006, when a B100 quality survey performed by National Renewable Energy Laboratory showed nearly 60 percent of samples failed specification. Not only has fuel quality improved

dramatically since then, but the stringency of ASTM D6751 has also increased significantly. Teresa Alleman, a senior fuel chemist with NREL, made her first appearance in several years on stage at the National Biodiesel Conference & Expo in Tampa this January to discuss the biodiesel industry’s latest fuel quality report—an expansive compilation of B100 test data from BQ-9000-accredited producers. BQ-9000 is the U.S. biodiesel industry’s quality assurance program and, according to Scott Fenwick, technical director for the National Biodiesel Board, more than 50 producers in the U.S. and Canada are BQ-9000-certified. “Those producers in the program represent approximately 93 percent of the gallons that are represented by the NBB,” Fenwick said. Diesel fuel quality is becoming increasingly important as engine technologies rapidly advance to keep up with tougher emissions and fuel economy regulations. “Engine technologies are changing faster and faster, with tighter and tighter tolerances,” Fenwick said. “Fuels need to be cleaner and cleaner. We half-jokingly say that, in the very near future, your fuel will be cleaner than the drinking water that you’ve got in front of you. Understanding where we are [with respect to biodiesel fuel quality] gives OEMs a baseline on where they can begin to adjust their engines for future designs and provide information back to regulators on where we stand.” What prompted this latest fuel quality assessment, according to Richard Nelson of Enersol Resources, was a fuel quality study conducted in 2017 by Germany’s biodiesel quality management association AGQM, the results of which were released in 2018. The AGQM investigation collected 53 samples from 15 producers and analyzed 1,060 parameters, concentrating on metals. The results were very positive. All samples met or exceeded the DIN EN 14214 biodiesel standard and even stricter AGQM requirements. Only 14 limits were violated, but all violations were within the precision of the method. Since then, AGQM has performed two subsequent surveys, the latest of which involved three sampling campaigns in 2019. The 2019 results, just released this spring, showed significant improvement over 2018. In 59 samples taken, which resulted in 1,062 analysis data, only seven limit violations could be determined. Nelson said tractor engine manufacturer Deutz wanted to know what the state of biodiesel fuel quality was in order to warranty biodiesel in engines. The OEM warrantied B100 in a specific model for Germany, but Nelson said it only warrantied

B20 in the U.S. because the company did not have recent information on where U.S.-produced biodiesel stood in terms of quality. “So, Steve Howell and Scott Fenwick came up with the idea to survey BQ-9000 companies,” Nelson said. “We asked for all 14 parameters from 2017 and 2018, and determined the average, minimum, maximum, and other metrics with that data.” All BQ-9000 producers were surveyed for their monthly test data on all 14 critical property parameters over two years. This amounted to more than 11,000 property parameters analyzed over the study period: 5,391 in 2017, and 5,766 in 2018 from BQ-9000 producers in both the U.S. and Canada. The results, which are provided below in detail, were very favorable, demonstrating that biodiesel fuel quality—at least high up the chain at the point of production—has never been higher, and the voluntary BQ-9000 quality assurance program works as intended. Diving into the Data Once the analysis data from the BQ-9000 producers’ fuel samples were received, Nelson scrubbed it of company and location information, and anonymized and randomized the data. When Alleman at NREL received the data, she had no idea from which producers or location the data came, or how results from any given parameter connected to results from the other parameters. In other words, there was no way to tell, for instance, whether a sample that failed oxidation stability minimums was the same sample that may have had an abnormally high acid value. The data were completely randomized and anonymized. Metals content is perhaps one of the most important parameters for OEMs, considering future aftertreatment designs may use close-coupled SCR systems whose catalysts are highly sensitive to metals contamination. Unlike today’s systems that feature a diesel oxidation catalyst followed by a diesel particulate filter and then an SCR catalyst, more stringent NOx reductions may require future aftertreatment designs to expose sensitive SCR catalysts directly to exhaust manifolds at high temperatures and putting the catalysts directly in the line of fire of any metals exiting the combustion chamber. The metals limit in ASTM D6751, the biodiesel fuel quality standard, for combined sodium and potassium is 5 parts per million (ppm). Alleman said results from the recent analysis of BQ-9000 producer data show averages well below the spec limit. For 2017 and 2018, averages were 0.68 ppm and 0.69 ppm, respectively. For 2017, 416 samples were tested and showed a minimum value of zero, a maximum value of 6 ppm—the only, single sample out of spec for metals—a median of 0.30 ppm, with 95 percent of all samples coming in at or below 2.23 ppm. For 2018, 431 samples were tested and showed a minimum www.BiodieselMagazine.com

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QUALITY

Fenwick

Nelson

Alleman

of zero, a maximum of 4.5 ppm, a median of 0.42 ppm and the 95th percentile at 2.20 ppm or below. The metals limit in D6751 for combined calcium and magnesium is also 5 ppm. For 2017 and 2018, averages were 0.30 and 0.31, respectively. None of the 408 samples from 2017 nor the 426 samples from 2018 were off spec for calcium and magnesium. The minimum value for both years was zero. The maximum for 2017 was 4 ppm, and the max for 2018 was 4.4 ppm. The median for 2017 was 0.06 ppm and 0.08 ppm for 2018. The 95th percentile for both years was 2 ppm or below. Phosphorous levels were all very close to zero. “Only a handful of data points were any larger than zero,” Alleman said. The average for 2017 was 0.41 ppm and 0.37 ppm for 2018. The 95th percentile for 2017 and 2018 was 1 ppm and 0.98 ppm, respectively. On oxidation stability, the latest quality results show the biodiesel industry is doing very well. This is another critical parameter for OEMs. Only one sample failed the three-hour minimum in 2017 out of 421 samples. The failed sample time was 2.7 hours, the minimum value for that year. The max time in the 2017 lot was 40.6 hours, and the average for the 2017 samples was 9.8 hours with a median of 9 hours. In 2018, all 452 samples passed oxidation stability, with a minimum time of 4.4 hours, a maximum of 27.5 hours, an average of 9.5 hours and a median of 8.7 hours. The 95th percentile for oxidation stability, since it relies on a minimum time vs. a maximum limit, is not applicable for this parameter. “Acid number—this is another key parameter that helps talk about the health of the fuel,” Alleman said. None of the 421 samples in 2017 was off spec for acid number, the max

value of which is 0.50. The 2017 average was 0.26 and median was 0.27 with a minimum of 0.05, a max of 0.47 and the 95th percentile at 0.41. For 2018, one sample of 453 was off spec at 0.51. The average as well as the median was 0.27 with a minimum number of 0.02, a max, again, of 0.51, with the 95th percentile coming in at 0.43. There is no specification for cloud point in D6751, but Alleman shared results anyway. In 2017, the minimum was minus 4.1 degrees Celsius and maximum was 15 C, with an average of 0.8 C and the 95th percentile at 9 C. For 2018, the minimum cloud point was 5.6 C, the maximum was 17 C, with an average of 1 C and the 95th percentile at 8.8 C. On the cold soak filtration test (CSFT), Alleman said, “I’ve spent a lot of time thinking about this test, running this test, and teaching people how to run this test. Some of our early work showed bimodal distribution—either they passed or failed, there was no in between. I’m standing up here telling you today, everything is over here on the passing side. The industry reacted to those previous quality hiccups. Believe me, I remember standing up here saying, ‘We’re having some issues.’ It is very pleasant to be able to say something else today.” In 2017 and 2018, all 409 and 441 samples, respectively, passed the CSFT. In 2017, the minimum time was 54 seconds with a maximum of 324 seconds, an average of 108 seconds, a median of 105 seconds, and the 95th percentile at 144 seconds or below. For 2018, the minimum was 66 seconds, the max at 338 seconds, an average of 104 seconds, a median of 100 seconds, and the 95th percentile at 144 seconds. The CSFT requires filtration in 360 seconds or less, or 200 seconds or less for No.1B grade biodiesel.

Total glycerin is “another key quality parameter and something we found early on, back in the day, producers were having a hard time meeting,” Alleman said. “That’s not a problem anymore.” Only one sample of 421 in 2017 surpassed the limit of 0.24 weight percent. In 2017, the minimum was 0.003 weight percent and the maximum was the off-spec sample of 0.256 weight percent. The average for the 2017 samples was 0.093 weight percent with a median of 0.103 weight percent. The 95th percentile was 0.151 weight percent. In 2018, out of 453 samples, the minimum was 0.005 weight percent, the max was 0.225 weight percent with an average of 0.093 weight percent, a median of 0.099 weight percent and the 95th percentile at 0.164 weight percent. “We’re seeing the product is readily meeting the specification,” Alleman concluded. “For monoglycerides, this is not a mandatory parameter in the U.S.,” Alleman said, “and I can’t tell you if any of these were a No.1-B grade or not.” Out of 421 samples in 2017, the minimum monoglyceride content was 0.001 weight percent, the max was 0.8 weight percent with an average of 0.271 weight percent, a median of 0.299 percent and a 95th percentile of 0.436. For 2018, of the 453 samples, the minimum monoglyceride content was zero, the maximum was 0.642 weight percent with an average of 0.269 weight percent, a median of 0.288 weight percent and the 95th percentile of 0.474 weight percent. On free glycerin, out of 421 samples in 2017 and 453 in 2018, only less than a handful of samples were off spec, with one 2017 sample well above the 0.02 weight percent max at 0.083 weight percent. The minimum for both years was zero. The max for 2017 was 0.083

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percent with an average of 0.007 weight percent, the median at 0.007 weight percent and the 95th percentile at 0.014 weight percent. For 2018, the max free glycerin content was over the limit at 0.030 weight percent with an average of 0.006 weight percent, a median of 0.005 weight percent and the 95th percentile at 0.014 weight percent. Moving on to sulfur, Alleman said, “EPA cares a whole bunch about sulfur.” In 2017, of 420 samples, the minimum sulfur content was zero and the max was 17.3 ppm—over the spec limit of 15 ppm. The average was 3.4 ppm with a median of 1.8 ppm and the 95th percentile at 10.8 ppm. For 2018, of 448 samples, the minimum was zero and the maximum was below the 15-ppm limit at 14 ppm. The average sulfur content in 2018 was 3.4 ppm, the median was 2 ppm and the 95th percentile was 10.9 ppm. “Flashpoint—fire marshals care a lot about this data,” Alleman said. “[What we see is this is] trending very high, well in excess of the spec for both years.” The minimum flashpoint for biodiesel under D6751 is 93 C. In the 2017 data, out of 385 samples, all passed and met the minimum threshold. The mini-

mum was 95 C, the max 211 C with an average of 155 C and a median of 160 C. One of 413 samples in 2018 came in at 89 C, which is below the minimum threshold, with the max at 193 C, an average of 153 C and a median of 161 C. Conclusion “So, we really have collected a huge amount of data to see where the U.S. and Canadian biodiesel industry is,” Alleman said. “The [metals data are] easily orders of magnitude under the spec limit. We are so far below these limits on the metals—that’s a very important story. I hope my OEM friends in the audience are taking good notes.” “This data is a snapshot in time, at the point of production,” Fenwick said. “Quality does not get better as it goes along. There is a myriad of ways in the distribution system to [pick up contaminants].” One might argue that, given all the data used was from BQ-9000 producers, this analysis tested the best of the best, which is true. Not all biodiesel in the U.S. market is produced by NBB member-producers, and not all NBB member-producers are BQ-9000-certified.

However, NBB member-producers and BQ9000-certified producers represent a vast majority of the biodiesel fuel sold in the U.S. market. “Never before has NREL been able to provide this level of fuel quality information,” Alleman said. “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 reoccurring insight into biodiesel fuel quality each year.” As Alleman indicated, this will be a yearly assessment moving forward. “These reports show what we’ve been saying for years,” Fenwick said. “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.” Author: Ron Kotrba Editor in Chief, Biodiesel Magazine 218-745-8347 rkotrba@bbiinternational.com

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SPOTLIGHT

Technology Tools of the

TRADE

Biodiesel Magazine spotlights the upcoming Biodiesel Production Technology Summit, Aug. 24-26 in Omaha, Nebraska, and Imerys’ CynerSorb filterable adsorbent for pretreatment of low-quality feedstock BY RON KOTRBA

www.BiodieselMagazine.com

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SPOTLIGHT Biodiesel Production Technology Summit BBI International and Biodiesel Magazine announced in mid-May that the agenda for the Biodiesel Production Technology Summit, set to take place Aug. 24-26, 2020, in Omaha, Nebraska, has been released and is now available online. Featuring two full days of panel discussions by more than 30 experts, the Biodiesel Production Technology Summit provides a balanced mix of content including biodiesel and renewable diesel topics covering pretreatment, new process technologies, improving existing production technologies, posttreatment and much more. Handcrafted by Biodiesel Magazine Editor in Chief Ron Kotrba from dozens of submitted abstracts, along with personal invitations to his deep industry connections after more than 15 years with the publication, the Biodiesel Production Technology Summit agenda is designed specifically for existing and future biodiesel and renewable diesel producers to learn about cutting-edge process technologies, new techniques and equipment to optimize existing production, and efficiencies to save money while increasing throughput and fuel quality. The agenda paired with extensive networking opportunities and an exposition hall are anticipated to provide an unrivaled conference experience for all producers of biomass-based diesel. Co-located with the International Fuel Ethanol Workshop & Expo, the combined events are expected to be the world’s largest gathering of biofuel producers. In an unprecedented move, event owner and operator BBI International is providing unlimited free passes for producers of ethanol and biomass-based diesel to attend the FEW and Biodiesel Production Technology Summit. Registrants of the FEW will also be encouraged to freely

attend technical sessions at the co-located Biodiesel Production Technology Summit in order to learn the latest information on biodiesel and renewable diesel, which may assist in decisions whether to co-locate biomassbased diesel production at their ethanol refineries. “I am proud of the impressive agenda we have created for the inaugural Biodiesel Production Technology Summit,� says Kotrba, who also serves as program director for the biodiesel event. “Our speaker lineup features some of the largest, most respected and well-known companies and individuals in the sector.� The dates and venue for the event were changed from June 15-17 in Minneapolis to Aug. 24-26 in Omaha due to the coronavirus pandemic. With the later dates and continuous monitoring of the crisis, in addition to taking necessary steps to help create a safe and healthy conference experience, BBI International is anticipating a successful show. The company has updated its Biodiesel Production Technology Summit website with a Frequently Asked Questions page and COVID-19 Safety Plan for patrons. To view the agenda, current sponsors, and how to reserve a booth, register, or become a sponsor, visit biodieseltechnologysummit.com or call 866-746-8385.

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SPOTLIGHT CynerSorb Texas A&M Used Cooking Oil and Poultry Fat Trials „ Used Cooking Oil „ Poultry Fat 40 Total Contaminants (ppm)

Environmental policies and sustainability concerns continue to push biodiesel and renewable diesel producers toward waste-based feedstocks, which contain more impurities than virgin oils. “Current adsorbents have very poor filtration characteristics,� says David Gittins, Imerys Filtration science and technology director. “Therefore, higher dosing rates are leading to choked flows, lower capacity and reduced performance.� Meanwhile, many national governments are increasing their biodiesel mandates while U.S. and European interest in producing renewable diesel is on the rise. “The market is growing,� Gittins says. In order to facilitate more market throughput to meet demand, producers require more throughput from their adsorbents. “It’s not that existing adsorbents don’t work,� Gittins says. “What lets them down is their relatively poor filtration characteristics—they tend to block the filter bed, leading to shorter filtration cycles. By starting with a filter aid and then adding proprietary surface engineering, Imerys has eliminated this poor filtration functionality with its CynerSorb range of filterable adsorbents.� Matt Jordan, Imerys Filtration’s technical support manager, says some end users of silica gel, bleaching clay or synthetic silicate adsorbents mix them with conventional diatomite filter aids to keep the filter bed open. “This is only addressing the symptoms, not the root cause,� he says. “CynerSorb is a two-in-one solution for removing impurities while maintaining high porosity, allowing for much higher flux rates than current solutions.� Jordan and Gittins say CynerSorb’s superior filtration characteristics, derived from the structure of the diatomite backbone used to make CynerSorb, allow for longer filtration cycles. “Each CynerSorb particle has a multitude of small microscopic pores, what we call ‘micro-porosity,’� Jordan says. “This not only increases the surface area but also allows for better capture of small, potentially submicron particles. This propriety surface activation of the diatoms means all the adsorbent sites are readily available, hence adsorption is significantly quicker. This is how we can get better removal of unwanted contaminants, even at lower dosing rates, as our trial data show.� In one industrial trial, Imerys compared its filterable adsorbent with silica gel and documented run length, residual soaps and dosage. Silica gel had a run length of 11 hours, leaving 5.4 parts per million (ppm) soaps at a dosing of 0.09 percent. CynerSorb showed a run length of 43 hours leaving 3.4 ppm soaps behind at a dose of 0.05 percent. “This is true not only for soaps, but also for metals and phosphorus,� Jordan says. Lab trials for a biodiesel producer in Europe showed four times more phosphorus removal with CynerSorb than a clay-based adsorbent system at the same dosing rates. What the team realized from this is how useful CynerSorb could be in also pretreating renewable diesel feedstock. “The catalysts used in [hydrotreated vegetable oil] production can be hugely expensive compared to adsorbent costs,� Jordan says. “Anything that can extend the life of the catalyst can have huge cost-saving benefits. Sure, refiners could get super-low phosphorous levels by doubling, tripling or quadrupling their adsorbent dosing rates, but again, this will just kill filter life. This is the essence of the CynerSorb filterable adsorbent range.� Imerys offers five grades of CynerSorb product with varying filtration characteristics, depending on the customers’ needs. “This is the widest selection for the end user,� Jordan says. “In feedstock pretreatment,

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CynerSorb removes metals and can degum too, which can be done with or without adding acid.� He says the best application for CynerSorb is on the front end, addressing impurities early on so producers don’t have to deal with them later. “Taking care of the bad things on the front end helps improve conversion and separation down the line,� he says. CynerSorb has varying ranges of permeability but also added functionality for soap removal if needed. “Metals and impurity removal are consistent among all grades of CynerSorb,� Jordan adds. Fifteen years ago, Imerys recognized the need for higher commitment to R&D, and CynerSorb was one of many innovations to stem from this. Today, Imerys is working on detailed studies into specific feedstock blends “in order to be of higher value to plants that are now being designed,� Jordan says. “New plants are planning on utilizing lower-cost, lower-quality feedstock blends. Imerys is working with industry-leading engineering firms and equipment manufacturers to reduce the total cost of ownership while operating, and enabling new plant builds to be constructed with significantly smaller footprints and capital expenditure.� More recently, with increasing water scarcity and tightening effluent regulations, Imerys has been approached to advise on replacing water-wash systems with dry-wash alternatives. Couple its filtration and impurities reduction performance with the side benefit of significant waste cake disposal reduction due to greater cycle lengths and lower dosing rates, and in some larger biodiesel plants this could be a six- to sevenfigure cost avoidance, Jordan says. While Imerys’ proven track record and innovation are core to its reputation, Jordan says customer focus is its greatest strength. “We work closely with our customers at their plants to help identify new solutions to problems that have yet to happen,� he says. “If producers are having issues achieving throughput stemming from feedstock blends or elevated dosing rates hindering pretreatment performance, they should think about CynerSorb.�

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