2018 July Ethanol Producer Magazine by BBI International

JULY 2018

DOUBLE

DUTY Energy Upgrades Boost Capacity Page 20

ALSO

Efficiency Gains Quantified Page 28

Cellulosic Ethanol by the Gallon Page 36

On-Site Options: In with the Old and New Page 50

AND MORE www.ethanolproducer.com

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EDITORIAL President & Editor in Chief Tom Bryan tbryan@bbiinternational.com Managing Editor Lisa Gibson lgibson@bbiinternational.com Associate Editor Tim Albrecht talbrecht@bbiinternational.com Copy Editor Jan Tellmann jtellmann@bbiinternational.com

ART Art Director Jaci Satterlund jsatterlund@bbiinternational.com Graphic Designer Raquel Boushee rboushee@bbiinternational.com

PUBLISHING & SALES CEO Joe Bryan jbryan@bbiinternational.com Sales & Marketing Director John Nelson jnelson@bbiinternational.com Business Development Director Howard Brockhouse hbrockhouse@bbiinternational.com Senior Account Manager/Bioenergy Team Leader Chip Shereck cshereck@bbiinternational.com Account Manager Dave Austin daustin@bbiinternational.com Circulation Manager Jessica Tiller jtiller@bbiinternational.com Marketing & Advertising Manager Marla DeFoe mdefoe@bbiinternational.com

EDITORIAL BOARD Ringneck Energy Walter Wendland Little Sioux Corn Processors Steve Roe Commonwealth Agri-Energy Mick Henderson Pinal Energy Keith Kor Aemetis Advanced Fuels Eric McAfee Western Plains Energy Derek Peine Corn Plus Mike Jerke Customer Service Please call 1-866-746-8385 or email us at service@bbiinternational.com. Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping and handling charge for anyone outside the United States. To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues, Reprints and Permissions 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 866-746-8385 or service@bbiinternational.com. Advertising Ethanol Producer 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 Ethanol Producer Magazine advertising opportunities, please contact us at 866-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to lgibson@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

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2019 Advanced Biofuels Conference 2019 International Fuel Ethanol Workshop & Expo ACE American Coalition for Ethanol Agra Industries BetaTec Hop Products Cloud/Sellers D3MAX LLC DSM Bio-based Products & Services DuPont Industrial Biosciences Edeniq, Inc. EISENMANN Corporation Ethanol Producer Magazine's Top News Ethanol Producer Magazine's Webinar Series Fagen Inc. Fluid Quip Process Technologies, LLC Growth Energy Hengye, Inc. IBT Industrial Solutions Interra Global Corporation J.C. Ramsdell Enviro Services, Inc. Lallemand Biofuels & Distilled Spirits Leaf-Lesaffre Advanced Fermentations McC Inc. Mist Chemical & Supply Company Mole Master Services Corporation Nalco Water On Sight Video Surveillance Phibro Ethanol Performance Group POET LLC Premium Plant Services, Inc. R.S. Stover Rayeman Elements, Inc. RPMG, Inc. SGS North America, Inc. Agricultural Services Solenis LLC Suez Water Technologies & Solutions Syngenta: Enogen Trident Automation U.S. Grains Council Victory Energy Operations, LLC Whitefox Technologies Limited WINBCO

4 | ETHANOL PRODUCER MAGAZINE | JULY 2018

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CONTENTS

JUNE 2018 VOLUME 24 ISSUE 7

DEPARTMENTS 4

AD INDEX

EDITOR'S NOTE

EVENTS CALENDAR

DRIVE

Energy, Enzymes and Eco-Friendly Efforts By Lisa Gibson

FEATURES

EFFICIENCY

Gallons Gained

Distillation, dryer upgrades help boost capacity By Lisa Gibson

KARGES-FAULCONBRIDGE INC

Proof of Improvement

Summer Driving Season By Emily Skor

Data show efficiency gains from industry-wide efforts By Tim Albrecht

GLOBAL SCENE

Greening the Canadian Transportation Sector By Jim Grey

GRASSROOTS VOICE

FILE PHOTO

Octane Overconfidence By Ron Lamberty

BUSINESS BRIEFS

MARKETPLACE

CONTRIBUTIONS

Production is steadily growing By Susanne Retka Schill

POET

ENZYMES

Sweet-Spot Search

Cost, customization are focuses for cellulosic enzyme producers By Tim Albrecht

CMMS for Business Intelligence

62 SUSTAINABILITY

NOVOZYMES

Transparency, Credibility and Profitability

Mick Henderson (left), general manager of Commonwealth Agri-Energy LLC in Hopkinsville, Kentucky, and Scott Lucas (right), director of engineering for Lucas E3, stand on site at Commonwealth after installing and integrating multiple efficiency upgrades and expansion elements at the plant.

PHOTO: COMMONWEALTH AGRI-ENERGY LLC

6 | ETHANOL PRODUCER MAGAZINE | JULY 2018

ON-SITE ENERGY

A Shift in Power

New technologies, changing markets prompt development By Susanne Retka Schill

Reporting opens communication, markets By K·Coe Isom

ON THE COVER

CELLULOSIC ETHANOL

Zero to 10 Million in 5 Years

58 ANALYSIS

Reports simplify HR, inventory, upkeep and access By Heather Wilkerson

BENCHMARKS

FILE PHOTO

Ethanol Producer Magazine: (USPS No. 023-974) July 2018, Vol. 24, Issue 7. Ethanol Producer Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

EDITOR'S NOTE

Energy, Enzymes and Eco-Friendly Efforts

Lisa Gibson

Managing Editor lgibson@bbiinternational.com

“Efficiency” has long been a buzzword in the ethanol industry. But it’s vague enough that it can apply to multiple systems and components of production. In this issue of Ethanol Producer Magazine, focus in on efficiency as it relates to energy, emissions and yield. They’re all interwoven. In our cover story, “Gallons Gained,” starting on page 20, we explore some of the most common energy efficiency-boosting measures plants can employ. They are an investment, but producers say the savings—both in natural gas and cash—and the hike in capacity are more than worth it. It comes down to numbers and dollar signs. In light of the strong industry-wide efficiency push, one might ask: What are we gaining? Do figures show that the efforts and investments are making a clear impact on the industry as a whole? In the page-28 feature, “Proof of Improvement,” we tell you. Data do show ethanol production overall has increased yield per bushel, energy usage and natural gas usage in the past 10 to 14 years. In some cases, the numbers show significant improvement. With updated efficiency and strides in numerous areas, including life-cycle emissions, it remains crucial to implore government agencies, namely the U.S. EPA, to consider credible statistics that show substantially better progress than figures currently used to craft legislation. The proof is there. We just need ethanol outsiders to pay attention. Our second focus in this issue is cellulosic ethanol, and we explore the topic in two feature articles. It can be difficult to get an accurate report of how many gallons are being produced, but some analysis of EPA data helps. In “Zero to 10 Million in 5 Years,” on page 36, freelancer (and retired former managing editor of EPM) Susanne Retka Schill pieces together a portrait of what the cellulosic sector looks like in gallons. It’s been slow to start, but looks to be showing signs of growth. And on page 42, “Sweet-Spot Search” looks at enzymes for cellulosic ethanol production, including efficacy gains and cost reductions. Finally, we veer back to energy in the page-50 feature, “A Shift in Power.” Combined-heatand-power applications are more attractive now than they were when the industry first ramped up, because of market changes and new technologies. Dryer exhaust recovery systems also are on the market, and wind power applications complete with utility partnerships are changing the power generation picture, too. Topics under the cellulosic ethanol and energy efficiency umbrellas are vast. We had a sea of solid ideas when planning this issue, but with the help of our invaluable editorial board, we think we’ve chosen a few of the most interesting and relevant.

FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: 8 | ETHANOL PRODUCER MAGAZINE | JULY 2018

TWITTER.COM/ETHANOLMAGAZINE

EVENTS CALENDAR

2019 International Fuel Ethanol Workshop & Expo June 10-12, 2019 Indiana Convention Center

ACE Conference August 15-17, 2018 Renaissance Depot Hotel Minneapolis, Minnesota

From its inception, the mission of this event has remained constant: The FEW delivers timely presentations with a strong focus on commercial-scale ethanol production—from quality control and yield maximization to regulatory compliance and fiscal management. The FEW is the ethanol industry’s premier forum for unveiling new technologies and research findings. The program covers cellulosic ethanol while remaining committed to optimizing existing grain ethanol operations. 866-746-8385 www.fuelethanolworkshop.com

The ACE Conference is a must-attend event for industry leadership. Relaying timely updates on public policy, market development, board of director training, and much more, this event combines the detail of a high-level training course with all the fun of a family reunion. 605-334-3381 www.ethanol.org/events/conference

Indianapolis, Indiana

2019 Advanced Biofuels Conference June 10-12, 2019 Indiana Convention Center Indianapolis, Indiana

Colocated with the International Fuel Ethanol Workshop, 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 petroleum-derived products. 866-746-8385 www.advancedbiofuelsconference.com

Please check our website for upcoming webinars www.ethanolproducer.com/pages/webinar

Live + OnDemand

WEBINAR SERIES

www.EthanolProducer.com/pages/webinar

GAIN MAXIMUM EXPOSURE & CONTACT INFO Sponsor Featured On:

Website All emails Advertisements Webinar page on EthanolProducer.com OnDemand material Attendee Information

DRIVE

Summer Driving Season By Emily Skor

“Summer driving” for me will always be the fourhour family drive from St. Paul, Minnesota, to the cabin on Lake Superior. I’ve done that drive every summer of

my life. And now my kids can make the same claim. We of course have our “must stop” destinations—the Hayward, Wisconsin, candy shop, Wisconsin fireworks stands, and roadside sweet corn. I would add a number of retailers along the route offering E15 to our list of “must stops” (there is a great Kwik Trip just blocks from the candy shop). But, these retailers cannot sell us E15 this summer. Outdated government regulations prohibit E15 summer sales in Wisconsin and much of the rest of the country. At Growth Energy, we’re working to change that. E15 is offered by industry-leading retailers at more than 1,300 locations across 29 states. With this shaping up to be the most expensive summer driving season for American consumers in years and considering that E15 typically costs up to 10 cents per gallon less than standard gasoline, you would think consumer demand for the fuel would spike during the summer. But in fact, E15 demand drops between June 1 and September 15 because drivers are robbed of the option at a time when they could most benefit from it. Decades ago, the Environmental Protection Agency set limits on Reid vapor pressure (RVP), a measure of how easily fuel will turn to vapor, but those rules were never properly updated when higher biofuel blends hit the market. Such a minor oversight should theoretically be easy to rectify. Wouldn’t EPA want fuel regulations to be current with the marketplace? After all, the Trump administration prides itself on cutting needless regulations. But alas, every summer, eco-friendly E15 is held to tougher standards than other fuels sold year-round, cutting off sales and imposing needless costs on retailers. To comply with the summer restrictions, retailers have to relabel every E15 dispenser twice a year. For 2018, there will be about 40,000 stickers replaced in more than 25 states at a cost of $4 million including labor. It’s a major obstruction for those going the extra mile to expand into new markets and grow our industry. The RVP issue is about more than just a three-month dip in sales. Retailers in many markets simply

10 | ETHANOL PRODUCER MAGAZINE | JULY 2018

can’t or won’t retool their labels and fuel offerings each summer, which means E15 is off the menu all year. It’s clear that E15 is a competitive addition to any retailer’s fuel portfolio, but we need RVP relief to unleash that immense market potential. With RVP, we anticipate 1 billion new gallons of demand in the next five years. Inaction on this issue doesn’t just threaten our industry—it stifles demand that would help lift our rural economy out of the worst crisis in a generation, with farm income plunging to a 12year low. There are forces at play at the EPA, where petroleum lobbysists hold considerable influence, working to keep an RVP fix in bureaucratic limbo. Thankfully, our industry is making progress and mobilizing allies across the heartland to win the fight. We’ve recruited the most powerful supporter anyone could ask for—President Trump. From conversations earlier this year, it was clear that the president was not very familiar with E15. By April, he told reporters and lawmakers that he saw RVP restrictions as “unnecessary and ridiculous.” Our efforts have moved us closer than ever before to an RVP fix, but it is not yet time for a victory lap. To put “summer RVP season” far in the rearview mirror, we must help our rural champions in Congress and at the United States Department of Agriculture hold the EPA to Trump’s agenda. Any implementation of RVP relief will not come easily. There would be a rulemaking process, a public comment period, a review period, and potential litigation. Growth Energy remains committed to seeing this effort through, and we are closely coordinating with industry stakeholders, retail partners, and our congressional champions to keep the momentum going. Together, we are pushing for this fix that will sustainably and smartly grow the domestic market for American-made biofuels. Author: Emily Skor CEO, Growth Energy 202.545.4000 eskor@growthenergy.org

“At the end of 2016, we installed a Whitefox ICE™ membrane system at our Madera facility in California. From day one the system has operated well. We have reduced natural gas costs by around 5%, leading to about a point lower in our carbon intensity score. Overall, we estimate the operating efficiencies, energy savings and carbon premium combined lead to approximately $1.0 million annually in benefits. We also see improved operations during hot weather due to reduced cooling water load, yielding greater output. We are currently evaluating installing Whitefox ICE™ at our other plants.” - Neil Koehler, CEO of Pacific Ethanol, CA

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GLOBAL SCENE

Greening the Canadian Transportation Sector By Jim Grey

Everyone in our industry can agree that it is in our interest to promote a greater understanding of the role of biofuels in the fight against climate change. Canada is a great example of how biofuels can lead the

way for greenhouse gas (GHG) reductions, and of the importance of bringing this message to policymakers. As business people, ethanol producers think first, quite naturally, of the bottom line. We think of the need to run our operations efficiently, to source and manage timely inputs, to ensure our transformation processes are optimized, our distribution systems effective, our sales, marketing and accounts receivable efforts well-managed, etc. When we engage with our buyers, we market our product based on its price, quality and octane level. While these critical aspects must remain central to our focus, we also engage regularly with two other audiences whose interests differ considerably: policymakers and the general public. As Canada heads toward key decision points that will transform transportation sector fuels, educating and engaging policymakers has never been more important. In December 2017, the Canadian federal government announced the first details of its national Clean Fuel Standard. The proposed policy aims to eliminate 30 megatonnes of annual GHG emissions by 2030. This targeted reduction is aimed at buildings, industry and the transportation sector, creating a significant opportunity for biofuels. At the same time, Ontario, Canada’s largest province, has just finalized an enhanced ethanol mandate bringing the required volume to 10 percent, effective as of 2020. Quebec, the secondlargest province, has committed to implementing its own mandates by 2020.

12 | ETHANOL PRODUCER MAGAZINE | JULY 2018

Overall, Canada is poised to join world leaders in aggressive climate policies and our goal is that biofuels are recognized as a key pathway for GHG reductions. Our association, Renewable Industries Canada, has led the way in advocating a strong role for biofuels as a part of the CFS. Here’s a short sampling of some of the data points that we have developed to help drive the argument that biofuels are a critical component in reducing transportation sector GHG emissions. Of the CFS’s 30 megatonne target, ethanol alone can deliver anywhere from 8.5 megatonnes based on conservative calculations, to 15 megatonnes of GHG reductions should the policy optimize ethanol’s potential. Biodiesel and renewable diesel combined could conservatively add another 9.7 megatonnes of reductions, assuming a total blend level of about 13 percent. This number could be considerably higher in a bullish scenario. So, in Canada, biofuels in and of themselves could contribute from 18 to 26 of the 30 megatonnes of reductions sought by the CFS. This represents anywhere from 60 to 87 percent of the total policy’s target. This would be a win-win for Canada’s environment, and economy. Independent economic modeling has shown that under a well-designed CFS, the Canadian biofuels sector could have an increased economic impact of up to $21 billion (Canadian) per year, while creating over 12,500 full-time jobs. As policymakers around the globe work toward meeting commitments under the Paris Agreement, it is worth noting that focus on the transportation sector—and biofuels in particular— can pay strong dividends. Author: Jim Grey Chair, Renewable Industries Canada CEO, IGPC Ethanol Inc. 519.765.2575 jgrey@igpc.ca

Ironically, the latest breakthrough in the field of energy, is a field. While most innovation begins with the seed of an idea, the greatest advance in the making of ethanol starts with a seed. The first corn seed technology specifically developed to increase the efficiency of ethanol production, Enogen® corn lets you source alpha-amylase directly from local growers. Which means you can now enhance your ethanol production while also investing in the local community. Enogen is making waves in the field of energy.

GRASSROOTS VOICE

Octane Overconfidence By Ron Lamberty

I was commiserating with a colleague about the continually shifting political sands beneath the ethanol industry when he said, “You know, sometimes I wonder if we would be better off if the RFS just went away. We wouldn’t have to deal with all this political crap and people complaining about government mandates, and ethanol is still the best and cheapest source of octane, so the oil companies are going to buy it anyway.” “Yeah,” I replied. “Unless they don’t.” The quizzical look on my friend’s face told me it was time for a long and seemingly unrelated story—which I’ll share with you now. I tried out for little league baseball for the first time when I was 8 years old. I was a year too young for the league, and was the youngest kid trying out for the team, but I was good at baseball, and wanted to give it a shot. There was a week of tryouts, and kids were cut every day, but I survived until the last day. (For those of you from the participation ribbon era, there was a time in America when sports teams kept the players they thought were the best, and cut the others, giving them extra time to prep for next season’s tryouts, or find a sport they didn’t suck at). I don’t remember how many kids the coach said he was keeping on the team, but I do remember it was one fewer than the number of players who were there on the last tryout day. That made me feel good about my chances, because I thought I was better than most of the guys on the team, but I knew I was better than one kid who was just awful. He was like one of those little kids you see with a big cock-eyed hat on, who just kind of drops the bat off his shoulder and spins around when he’s failing to hit a ball, and the ball just sprays out wherever when he tries to throw it. He was a 9-year-old with cute toddler skills, but none of the cuteness.

14 | ETHANOL PRODUCER MAGAZINE | JULY 2018

But the coach cut me and kept the scrub—because the scrub was his son. Ethanol is the best and cheapest source of octane today, just as it was when automakers needed octane almost 100 years ago (in the 1920s) and identified ethanol as the best choice. Then oil companies chose tetraethyl lead (TEL). Not because it was cheaper or better than ethanol—they used TEL because it was theirs. Ethanol was the better and less harmful choice as an oxygenate when the oxygen standard was the law of the land, but oil companies used methyl tert-butyl ether (MTBE) instead. Not because it was cheaper or better than ethanol— they used MTBE because it was theirs. Before they found a willing accomplice at EPA to let them weasel their way out of RFS requirements, some oil refiners were paying a dollar or more for RINs, which essentially allowed them to not buy an octane booster for 50 cents less than the gas they make. They don’t want to buy ethanol because they don’t make it. As far as oil companies are concerned, the entire fuel market should be theirs. If there were a highoctane standard with no RFS and no RINs, what makes anyone think refiners would use ethanol octane instead of their octane? In case you’re wondering, I made a different team the following year and was pitching when we played the team that discarded me. Striking out the coach’s kid would have been poetic revenge But I plunked him instead. Author: Ron Lamberty Senior Vice President American Coalition for Ethanol 605.334.3381 rlamberty@ethanol.org

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BUSINESS BRIEFS

People, Partnerships & Projects

US Grains Council hires new director of communications

Growth Energy taps industry veteran to head global markets

Bryan Jernigan is the new director of communications for the U.S. Grains Council in Washington, D.C. Jernigan replaces Melissa Kessler, who was promoted to director of strategic relations in January 2018. Jernigan will design and execute USGC’s internal and external communications strateJernigan gies. “We are thrilled to have Bryan joining our Washington staff and are excited about the perspectives he can bring to our work, having experience both inside and outside of agriculture,” said Kessler, who oversees USGC’s communications department. “I look forward to Bryan integrating into the talented group of communications professionals working on our staff and in our membership.” Jernigan previously worked for more than 17 years in a dual role as communications director for the National Association of Federally Impacted Schools and activities director for the Federally Impacted Schools Educational Foundation. In these roles, Jernigan was responsible for daily communications operations, including website content management, annual report and brochure production. Jernigan also previously worked as communications director for the Sugar Association as well as varied positions with the National Pest Management Association, the U.S. Chamber of Commerce and the National 4-H Council. Jernigan graduated from Oklahoma State University with a bachelor’s degree in radio, television, film, news and public affairs before attending Drake University in Des Moines, Iowa, where he received a master’s degree in mass communications.

Growth Energy appointed Craig Willis to senior vice president of global markets. Willis will oversee the organization’s market development efforts to increase ethanol’s footprint both at home and abroad. Willis previously served as president of ethanol for Archer Daniels Midland. “As we continue to lead in expanding market Willis access and growing demand for American biofuels, Craig will take our efforts to new heights,” said Growth Energy CEO Emily Skor. “Craig is an ethanol all-star. He has an exceptional track record of building meaningful business and stakeholder partnerships that deliver desired outcomes. Growth Energy will benefit from his experience and leadership in every aspect of the business. This new position ensures that our leadership and success in domestic market development via Prime the Pump is matched in the global markets.” Willis joins Growth Energy after more than 25 years at ADM. Willis’ successes in spearheading commercial development, opening new markets abroad, and helping to lead Prime the Pump as a board member give him a head start in building out an aggressive strategy for further growth for the entire ethanol sector. “I am looking forward to knocking down barriers and building on the success of Growth Energy’s work both in facilitating the advancement of E15 with Prime the Pump and increasing ethanol’s global footprint,” Willis said. “I grew up on a farm in the midst of the ag crisis, so I understand that ethanol is the only true way to grow demand for corn and I’m excited to join an exceptional team at Growth Energy to continue providing pathways for even greater market expansion for American ethanol and its coproducts.” Willis has a degree in agricultural economy from the University of Illinois at Urbana-Champaign.

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Seneca Cos. names vice president of safety Loyd Phillips is the new vice president of safety for Seneca Cos. Phillips joined the Seneca team in 2017 as a strategic account manager for the Waste Solutions division. Before Seneca, he spent 12 years working in safety with the world’s largest oil refineries and natural gas companies, including servPhillips ing as the safety director at Willbros Group, an industry leader in the midstream and downstream oil and gas markets. “Seneca performs work in very dangerous environments, which is why we feel it is critical to put as much effort forth as possible to keep our people safe in the field, especially as we expand into new geographies and industries,” said JC Risewick, Seneca Cos. president and chief operations officer. “Loyd is the perfect fit for this role as he has a lengthy and accomplished career in safety in some of the harshest and most dangerous environments in our industry.” Phillips said, “I have spent years in safety and focusing on reducing incident and injury rates. In the last three years with my prior employer, we were OSHA-recordable free. Due to Seneca’s commitment to the safety of their employees, I have no doubt that the same safety success will be achieved in this organization as well.” Phillips has experience in creating safety programs, root-cause analysis reports, tracking and trending systems, risk matrix analysis and training. He is a past member of the Board of Certified Safety Professionals, Petroleum Education Council and is an OSHA-authorized trainer for construction. Phillips will utilize this experience to implement new and expand on current Seneca safety programs and systems. Additionally, he will work closely with managers and field staff to keep job sites safe with zero recordable incidents.

Edeniq renames corn fiber-to-ethanol technology Edeniq Inc. has renamed its Pathway technology Intellulose. The rebranding effort includes a new Intellulose logo. “Our mission is to help our customers lead in cellulosic ethanol production,” said Brian Thome, president and CEO of Edeniq. “Our vision is for Intellulose to be implemented into every existing ethanol production facility, and for this technology to evolve alongside plants as they become more advanced and create more value. This rebranding effort is a more accurate portrayal of our technology and the value it can offer to the more than 200 ethanol plants operating in the U.S.” Intellulose enables the coproduction of starch ethanol and cellulosic ethanol at existing corn ethanol production facilities. The technology uses enzymes that maximize conversion of corn kernel fiber into fermentable sugar with a protocol to measure the output of cellulosic ethanol production. Intellulose has been approved by the U.S. EPA and a number of ethanol plants have been approved by the EPA to use Intellulose to generate cellulosic ethanol credits under the Renewable Fuel Standard. Edeniq’s customers are using Intellulose to deliver cellulosic ethanol gallons to fuel markets across the country.

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COPRODUCTS EFFICIENCY

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Energy efficiency projects in distillation, dryers and centrifuges are reducing expenses and natural gas usage, but also boosting plants’ capacities. By Lisa Gibson

There’s a drawback to being on the cutting edge of efficiency, leading the way and being willing to experiment with new technologies that aren’t installed anywhere else, says Erik Huschitt, CEO of Badger State Ethanol in Monroe, Wisconsin. “You always have the fear. You al-

ways have the risk. You always have the unknown.” Unforeseen problems could “show their ugly heads” at any time, he adds. Most plants don’t want to be the first to install a new technology, says Scott Lucas, CEO of Lucas E3. “With every new project, there are some things you don’t account for, and there are some problems. But the guys at Badger State, they kind of like the challenge. They’re good at it, and so they’re willing to take on some of these new technologies. These guys are looking to take on new projects and they’re willing to take risk, and that is a big thing in the industry.” Badger State was the first ethanol plant to install Lucas E3’s dryer exhaust recovery system. It also has a new, more efficient distillation column integration, working hand in hand with an expansion that will bring the 60 MMgy plant up to 90 MMgy.

20 | Ethanol Producer Magazine | MAY 2018 20 | ETHANOL PRODUCER MAGAZINE | JULY 2018

LEADING THE WAY: Badger State Ethanol has a reputation for jumping into new projects and being the first in the industry to implement technologies. The plant recently expanded from 30 MMgy to 60 MMgy, and is set to increase to 90 MMgy, with help from some energy efficiency improvements. PHOTO: BADGER STATE ETHANOL

ETHANOLPRODUCER.COM | 21 ETHANOLPRODUCER.COM | 21

COPRODUCTS EFFICIENCY With an increasing push for overall efficiency in the ethanol industry, Lucas E3 provides evaluation and engineering services for plants. It starts with a detailed model of each plant’s mass and energy balance process flow that illustrates where it could improve—base case versus improved case. Lucas says he can provide engineering services, or plants can take the recommendations and run with them, doing projects on their own. “That model helps not only identify potential projects, but also quantify,” Lucas says. “It’s a pretty good representation of what value they can expect from a particular project.” Lucas says the main areas where he sees room for improvement are energy efficiency and capacity, many times complementing each other. James Faulconbridge, president of engineering firm Karges-Faulconbridge Inc., agrees, adding that those goals often focus on drying, centrifuge, and distillation and evaporation. “Our clients tend to focus on the triple bottom line of efficiency, capacity and reliability.”

Lucas adds, “I think the biggest opportunity is doing things differently in distillation and evaporation and, of course, grabbing that stack gas.”

Taking on Technologies

When Lucas carries out a distillation project to help a plant become more energy efficient, while increasing capacity, he first adds distillation columns. But it’s the configuration of the columns that helps reduce the amount of steam in the distillation process, he says. “We integrate the columns in such a way that the energy usage goes down per gallon. “With current systems, you have this cascading energy that allows you to be fairly efficient. So we’re adjusting that slightly to make it even more efficient.” The new distillation columns are run under high pressure, and the energy from that high-pressure system can be integrated into the existing distillation columns. “In essence, we’re adding capacity,” he says. “The steam that’s used to drive the added capacity gets incorporated

into the existing plant. So, essentially, we’re adding capacity without adding any more steam usage.” At Badger State, that distillation improvement alone has already resulted in a 3,000-Btu-per-gallon steam savings, on the way to the targeted 5,000, Lucas says. With both the dryer exhaust recovery system adding recycled steam back into the system, and the distillation improvements, Badger State has seen a 15 percent reduction in natural gas usage. And as of May, the plant was still in the integration phase, tying up all the new components to the existing ones. With the capex invested, the systems installed, the plant already running at a higher capacity, and the inspections passed, it’s on to “secondary things,” Huschitt says. “Now we need to make sure we can sustain those higher rates and sustain those higher efficiencies.” The basis of the work was an expansion, Huschitt says, that included a hammermill addition, fermentation addition, and an expansion of the carbon dioxide

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DISTILLATION BOOST: Scott Lucas, director of engineering for Lucas E3, recommends added and reconfigured distillation columns at ethanol plants to boost efficiency and capacity simultaneously. Pictured is Badger State Ethanol in Monroe, Wisconsin. PHOTO: LUCAS E3

IMPRESSIVE SPREAD: Badger State Ethanol recently completed an expansion, coupled with efficiency improvements that together boost capacity to 90 MMgy. Efficiency projects include added and reconfigured distillation columns, and a dryer exhaust recovery system. PHOTO: BADGER STATE ETHANOL

scrubbing capacity, among other components. “Working with Scott, we were able to use our existing infrastructure, making modifications and add capex. … “[We’ve seen] huge increases in efficiencies on our natural gas, but also allowing us to reach the finish line on having a plant that has the throughput capacity we need.” Most plant boards want to see numbers, Lucas says. They want quantified efficiencies and production increases that make a project worthwhile. “Even though

in today’s market, you would think there’s not much room to increase capacity, there’s still a lot of guys out there that are adding gallons. … Everybody’s always striving for improvements, continuing to be better every year.” Many plants shoot for a specific number of gallons gained, he says. Commonwealth Agri-Energy LLC, in Hopkinsville, Kentucky, is expanding by 10 MMgy and realizing a 10 percent natural gas usage reduction, with the help of Lucas’ distillation system improvements.

Commonwealth has achieved efficient producer status, and Mick Henderson, general manager, says the company wants to be even more efficient and competitive moving forward. The two-phase project began with efficiency improvements, followed by expansion projects. “There’s absolutely overlap,” Henderson says. But the most important energy efficiency component is the distillation system improvement, he adds. “Our biggest bottleneck was distillation.” Beyond the distillation system, Commonwealth added fermentation capacity, a second beer well, implemented cooling tower upgrades to use an adjacent quarry efficiently, replaced hammermills and added a sieve bottle. “And instead of adding cooling, we’ll just have more hold time with finished fermentation,” Henderson says. “That’s kind of a neat trick to improve fermentation without necessarily having to add cooling. “We can’t lose yield,” Henderson emphasizes. “We’d like to maintain that, if not improve that to the next level. We’d like to claim we’re [using] best practices.” All improvements and upgrades were commissioned in July, putting the plant at 45 MMgy. “Scott is a wonderful engineer to work with,” Henderson says. “He and I are likeminded in how we address contractor issues, design issues.”

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COPRODUCTS EFFICIENCY Commonwealth also replaced its centrifuges, another common energy-efficiency measure Lucas sees at plants. Modification of the centrifuge so it can produce a dry or wet cake means less water has to go into the distillers grains dryers, and that means less gas being burned. “Reduce energy and you’ve got some dollars you can use to justify a project,” Lucas says.

Project Trends

When KFI performs evaluations for plant efficiency, it includes energy, water balance and benchmarking, Faulconbridge says. Recommendations are specific to each plant, he adds. “Each plant has some unique features and varying utility costs, so the answers tend to be different each time. Even operating choices between plants designed to be similar have an effect.” Cogeneration and heat recovery are popular, he says. “Most of our work involves a combination of efficiency, maintenance and capacity improvements simultaneously, and touch cook, DD&E, centrifugation and drying.” KFI often is asked to vet new technologies for ethanol plants, too, to see how or if they will fit operations, Faulconbridge says. Every plant manager, every general manager is charged with continually finding

ways to better the plant, Lucas says. “That’s one of the things I’m able to do for these guys with that plant evaluation. I’m able to give them some good talking points, some good projects that they can go to their boards and say, ‘Guys, here are some things we can do in the next two, three years.’” It’s easier to assign a concrete dollar worth to energy efficiency projects than it is for operational efficiency projects, Lucas says. It’s hard to quantify the dollar savings of simplified operations manager duties, he adds. “Most people are for energy efficiency because they want to see a dollar amount.” That’s generally true across the board. For Badger State, the goal was to cost-effectively increase capacity and take advantage of any other energy efficiency opportunities. “We wanted to take the next step and we wanted to see what is the opportunity to really take this plant to its highest limit that we’re aware of with all of the limitations in the original design of the plant,” Huschitt says. “We know we have to stay on the cutting edge of efficiencies,” he adds. “We know we have to stay disciplined in the fact that we’re in a commodity-based world, and so size does matter. Efficiencies matter. All these things, when we look at our fiduciary responsibility to our investor and to the industry as a whole, we know it’s our obligation to take what we’ve learned, what we’ve

experienced, what we’ve experimented with and take it to the next level.” Huschitt says Badger State is able to consider and implement new efficiency improvements because he and the board have strong confidence in the staff at the plant and their competency in their jobs. The plant has great supervision and leadership, too, but the boots-on-the-ground staff carry the weight of the technology upgrades and experiments. “Make no bones about it, the reason the board or I can have any kind of confidence in taking this kind of approach in being aggressive in finding opportunities and hunting them out is because we have a staff that is, in many cases, 10- to 15-year veterans.” Huschitt says those veteran employees have the same goals for Badger State that executive leadership and the board of directors do, namely long-term sustainability in the ethanol industry. Reliance on and trust between project partners also is crucial to short- and long-term successes, Huschitt says. It seems there will be more of both for Badger State. “Either you’re green and growing, or you’re ripe and rotting.”

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Author: Lisa Gibson Managing Editor, Ethanol Producer Magazine 701.738.4920 lgibson@bbiinternational.com

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PROOF OF IMPROVEMENT The energy efficiency push has achieved industry-wide results that experts hope can change outdated government and consumer perceptions of ethanol’s benefits. By Tim Albrecht

During the plant construction boom of the late ’90s and early 2000s, it was all about getting facilities up and running to make a profit. The next stage was more about boosting those profits while considering the environmental impact of production via energy efficiency, says Steffen Mueller, principal economist at the University of Illinois-Chicago Energy Resources Center. “As we continue to convert corn into ethanol in a more efficient way, such as reducing energy costs or using certain technologies to increase yields, we are producing an ever more competitive product,” Mueller says.

Material Improvement

Efficiency, specifically energy efficiency, was an important step for the ethanol industry for two main reasons. First, producing ethanol efficiently is profitable, of course. Less money spent on energy and other resources during the production process equals more money in the profit column. The second reason is greater efficiency in the production process translates to lower impact on the environment, says Connie Lindstrom, senior biofuels analyst for Christianson PLLP. The two areas producers focused on in the early stages of the efficiency push were natural gas usage and ethanol yield. Natural gas was a major focus because the price was relatively high. Once the natural gas price dropped, and as the industry matured, producers shifted focus to efficiency saving across the board, Lindstrom says. “Natural gas and electricity purchases have gone down 20 percent or more since 2004, so that’s a pretty significant gain.” 28 | ETHANOL PRODUCER MAGAZINE | JULY 2018

INDUSTRY STRIDES: The gains from efficiency measures across the ethanol industry are apparent in several metrics. Farming practices have improved life-cycle emissions figures, and average ethanol yield per bushel of corn has increased. PHOTO: FILE PHOTO

ETHANOLPRODUCER.COM | 29

SOURCE: CHRISTIANSON PLLP

Scott McDermott, partner at financial advisement firm Ascendant Partners, says the traditional areas that have seen the largest gains are ethanol yields, energy efficiency and resources efficiency. But he says energy is the “most mercurial, both in the areas of value and impact.

“In the ’90s, a lot of plants were at 22,000 to 29,000 Btus. Now, a high plant is 27,000 Btus per 200-proof gallons,” McDermott says. “There are some plants that are 17,000 Btus, which is a 14 percent efficiency increase in energy per gallon. That equates to 60 trillion Btus saved per year

because of the energy efficiency push over the last 10 years. It’s not small, it’s a very material improvement.” The biggest efficiency gain has been higher ethanol yield. Yields have increased dramatically since Christianson PLLP began collecting data, from 2.66 gallons per

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bushel in 2004 to 2.82 gallons per bushel in 2017. Christianson collects and calculates denatured gallons and a denaturant rate to ensure the undenatured yield is undistorted. It also collects an average moisture percentage for feedstock, and then adjusts all feedstock to an average of 15 percent mois-

ture to derive a consistent ethanol yield per bushel over time. Leaders average more than 2.89 gallons per bushel of feedstock. Some individual plants are now consistently approaching the 3 gallons-per-bushel mark, Lindstrom says. “We anticipate this number to increase even

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further as plants continue to invest in technologies that will improve their yields.” McDermott says coproduct improvement is getting a lot of attention, too. “They’ve kind of done as much as they can with tweaking the plant and producers are looking for efficiency that is of higher

SOURCE: CHRISTIANSON PLLP

value. Plants are looking toward biotechnologies, such as enzymes and yeast. It’s not efficiency in the traditional sense of throughput, ethanol yield, or energy yield, but rather coproduct innovation.” And yields will continue to rise as more plants adopt technologies, Lindstrom says. The industry will also see increased automation in plants to continue improving on electricity usage, she says. “One other area that we’ll see continuing improvement is in further adoption of technologies that allow plants to generate their own energy, rather than using natural gas and purchasing electricity.”

By the Numbers

Adoption of new technologies has already benefited producers’ energy efficiency, according to a 2017 report by the USDA

that studied the life-cycle greenhouse gas (GHG) balance of corn ethanol. The study found that GHG emissions associated with corn-based ethanol in the U.S. were about 43 percent lower than that of gasoline. The report found greater GHG benefits from corn ethanol than a number of earlier studies, driven by a variety of improvements in ethanol production, from the cornfield to the ethanol plant. Farmers are producing corn more efficiently and using conservation practices that reduce GHG emissions, including reduced tillage, cover crops and improved nitrogen management. Corn yields also are improving—between 2005 and 2015, U.S. corn yields increased by more than 10 percent. Between 2005 and 2015, ethanol production in the U.S. also increased significantly—from 3.9 billion to 14.8 billion gal-

lons per year. At the same time, advances in ethanol production technologies, such as the use of combined heat and power, landfill gas for energy and coproducing biodiesel, helped reduce GHG emissions, according to the USDA report. In fact, Japan recently allowed imports of Ethyl tert-butyl ether (ETBE) made from U.S. corn-based ethanol, providing a glimpse of the potential economic benefit energy efficiency can provide the U.S., Mueller says. “U.S. corn ethanol meeting the Japanese GHG reduction requirement is a direct result of efficiency gains in corn agriculture, as well as plants investing in energy efficient technologies, which reduces the total GHG emissions of U.S. ethanol. Indirectly then, investment in energy efficiency at U.S. plants was one contributing element to the Japanese opening that market.”

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And, of course, the energy efficiency push lowers carbon intensity scores. “Not only do you have the direct benefit of the oxygenate in the gasoline, which cuts down on emissions, but as producers have made plants more efficient, they’ve lowered their carbon scores so the environmental impact has decreased.” Lindstrom says, “The use of CI scores in the valuation of fuel, and in assigning tax credits and other economic incentives, is likely to increase in other areas around the country and around the world, so it’s becoming more important.” Beyond profits and environmental benefits, the push for efficiency is beneficial for the rural economy, Lindstrom says. “We’ve got such strong ag-focused engineers and technology manufacturers right now— these are great jobs that exist because of the commitment to continued progress in efficiency by the ethanol industry and other value-added agricultural industries.”

Perception and Reality

It can be difficult to convey the ethanol industry’s efficiency gains. Lindstrom says it will come with time, as data is more quickly updated. “It does seem to take some time for the facts on efficient production to filter outside the industry. The statistics used to craft policy aren’t updated that regularly, so it makes sense that there will be some

lag between what’s really going on in the industry and the information that the government has.” The slow turnaround of data creates misinformation that is being disseminated to consumers, other ethanol markets and government officials. For example, the EPA classified starch-based ethanol as having a 20 percent reduction in GHG emissions on average, but that data is from when the Renewable Fuel Standard was first implemented, Mueller says. “That data is 10 years old and the EPA has not been able to update it, so it’s often misunderstood,” he says. “Foreign markets look at those numbers and don’t see that the benefits are much larger—for example, the 20 percent reduction in GHG emission is actually closer to 50 percent.” Chris Bliley, vice president of regulatory affairs for Growth Energy, agrees that some data is outdated, but says more recent studies, such as the 2017 USDA report on GHG emissions, provide government officials with the best possible information. “All those new technologies referenced in the USDA report have really developed within the last 10 years. I think government data is catching up, but it depends on which report they’re looking at. “I think everyone in the industry is constantly trying to present the most up-todate data and using the data that we believe

most encapsulates some of the things that have happened within the industry,” Bliley says. “The USDA data, since it’s the most recent, has been the best to encapsulate what has happened in the industry in the past 10 years. We’re always trying to present that both in the U.S. and across the globe.” Lindstrom says the ethanol industry is fortunate to have trade organizations that communicate the industry’s successes and keep the producers informed about legislation that affects them. They create opportunities for producers to speak directly with legislators, provide a dialog and share data on efficiency gains. It allows them to “make a difference,” she says. “Our biofuels benchmarking program provides detailed data about the industry to our subscribers, but those subscribers also count on us to share general facts about efficiency gains with trade organizations and directly with legislators when we’re asked,” Lindstrom says. “And we are being asked more and more, so awareness is growing that today’s producers have a story to tell about efficiency gains.” Author: Tim Albrecht Associate Editor, Ethanol Producer Magazine 701.738.4922 talbrecht@bbiinternational.com

ETHANOLPRODUCER.COM | 33

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CELLULOSIC ETHANOL

ZERO TO 10 MILLION

IN 5 YEARS Slow to start and with fewer gallons than targeted through the Renewable Fuel Standard, cellulosic ethanol is showing signs of steady growth. By Susanne Retka Schill

Cellulosic ethanol production has been gaining momentum in the past five years, growing from zero to 10 million gallons, and most likely topping 15 million this year. That’s far

from the Renewable Fuel Standard’s original target of 7 billion gallons of cellulosic biofuel by 2018 and 16 billion by 2022. Even when cellulosic biofuel from renewable natural gas—primarily landfill gas that is compressed or liquefied for use as transportation fuel—is added, the numbers fall short at 250 million D3 cellulosic renewable identification numbers (RINs) generated for 2017. A dive into U.S. EPA documents and data sheds light on the players in the cellulosic ethanol industry. As of mid-April, 16 facilities were registered with the EPA to generate D3 RINs in the Part80 Fuels Program list. Only half, though, are producing commercially today. Two are for permanently idled plants—Dupont Nevada and Ineos Indian River—and three are research or demonstration facilities—Poet Research, Zeachem Boardman and American Process Alpena. Three are outside the U.S. Enerkem registered its plant in Edmonton, Alberta, but is still optimizing its ethanol process and not likely to ship product to the U.S. this year. Enerkem’s thermo catalytic process started up, converting processed, non36 | ETHANOL PRODUCER MAGAZINE | JULY 2018

DEDICATED TO BIOMASS: Now that the pretreatment challenge is overcome, Poet DSM’s Project Liberty in Emmetsburg, Iowa, is progressing toward full operation. Cellulosic ethanol production across the industry likely will top 15 million gallons this year. PHOTO: POET

ETHANOLPRODUCER.COM | 37

CELLULOSIC ETHANOL recyclable municipal solid waste into methanol. The methanol-to-ethanol module was completed last fall. Two bagasse-to-ethanol facilities are undergoing optimization in Brazil, one using BetaRenewables Prosea technology and the other Iogen’s. While both are registered, a data check with the most likely U.S. market—California with its Low Carbon Fuel Standard—indicates no biomass-based ethanol has generated carbon credits through the end of 2017. That leaves eight: Quad County Corn Processors, Poet DSM Project Liberty and six plants using the Edeniq pathway, recently rebranded as Intellulose. EPA includes most of these companies as consistent producers in its projections for cellulosic ethanol for 2018, with the exception of two Edeniq licensees registered after the discussion in the proposed rule setting renewable volume obligations (RVO) was published. Giving a low/high range of 3.9 million to 31 million for the aggregated production—the high being the maximum achievable—EPA projected 16 million gallons of cellulosic ethanol for 2018 from consistent

producers, plus a possible 1 million from inconsistent producers, which includes the Brazilian plants and potential new Edeniq producers. Looking at EPA’s RIN generation data, it appears the nascent cellulosic ethanol industry is on track to meet or exceed EPA’s projections. Each month the agency reports the number of RINs generated, including the running total for the year of cellulosic ethanol. If the 1.2 million-gallon average for the first three months of 2018 keeps up, the total will be pushing 14.5 million. If the production pace recorded in March becomes the norm, the total will approach 25 million gallons.

The Producers

Cellulosic ethanol producers hold their production numbers close to their vests, but considering the EPA’s discussion in the proposed rule, combined with the monthly RIN data and the various companies’ public comments sheds some light on how individual companies are doing.

QCCP was the only consistent cellulosic ethanol producer listed in EPA’s discussion of its cellulosic projections in the 2017 proposed RVO. For 2018, EPA projected a maximum 3 million gallons from the company. In a recent webinar, QCCP announced planned changes that will double production from its whole stillage conversion. Edeniq’s Intellulose technology helps licensees optimize the addition of cellulose enzymes to starch fermentation and includes a testing protocol accepted by the EPA to determine the cellulosic ethanol lift. CEO Brian Thome says the cellulosic yield varies by plant, with some at 1 percent and the best topping 2.5 percent. Six plants are currently registered and several more are in the process. With the medium lift from Edeniq’s Intellulose technology of 1.5 percent, multiplied by the total capacity of the six plants registered as of April, the monthly average production would be 550,000 gallons. Add to that QCCP’s monthly average of 250,000 gallons, based on EPA’s maximum produc-

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| ETHANOL PRODUCER MAGAZINE | JULY 2018 38 (WKDQRO SULQW DGB3ULQW LQGG

CELLULOSIC ETHANOL

RIN Registrants Code American Process Alpena

Demo, Idled

Bioflex Agroindustrial

Brazil

Dupont Nevada

Idled

Enerkem Alberta

Canada

Flint Hills Resources Iowa Falls, Iowa

D3,D6

Flint Hills Resources Shell Rock, Iowa

D3,D6

Ineos Indian River

Little Sioux Corn Processors, Marcus, Iowa

D3,D6

Mid America Agri Products-Wheatland LLC, Madrid, Nebraska

D3,D6

Pacific Ethanol Stockton

D3,D6,D5

Poet Research

D3,D6

Poet DSM Project Liberty

Quad County Corn Processors, Galva, Iowa

D3,D6

Raizen, Costa Pinto

D3,D6

Siouxland Energy, Sioux Center, Iowa

D3,D6

Zeachem Boardman demo

Idled

Research

Brazil Demo

SOURCE: U.S. EPA

&$ $! $!

$ĺ

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ETHANOLPRODUCER.COM | 39

CELLULOSIC ETHANOL

RINs Generated D3 RINs Year to Date Monthly (YTD) per EPA Generation, calculated

Monthly YTD Average, calculated

2013

2014

728,509

60,709

2015

2,200,000

183,333

2016

3,800,000

316,667

June 2017

3,540,000

590,000

July 2017

4,340,000

800,000

620,000

August 2017

4,340,000

800,000

620,000

September 2017

6,310,000

970,000

590,000

October 2017

5,600,000

290,000

560,000

November 2017

8,900,000

3,300,00

809,091

December 2017

10,046,934

1,146,934

837,245

January 2018

760,183

February 2018

1,280,000

519,871

640,000

March 2018

3,620,000

2,340,000

1,206,667

SOURCE: U.S. EPA

tion figure, and the estimated total for the corn kernel fiber-to-ethanol producers comes to a monthly average of 800,000 gallons. Subtracting that from the total of any given month gives a rough indication of how Poet DSM’s Project Liberty is progressing. Poet DSM announced last fall it had overcome the critical pretreatment challenge on its 20 MMgy corn stover-toethanol plant in Emmetsburg, Iowa. After more than two years of trying to make the original system work, a new one was developed by Poet engineers. With pretreatment working as it should, optimization of other unit operations could begin. Matt Merritt, director of public relations, reports unit operations are now in sync. “We are bringing all levels up together now.” The plant has hit the targeted 70 gallons per ton. Tracking the cellulosic ethanol total for each month in the EPA reports confirms that Project Liberty is, indeed, kicking production numbers over the estimated corn fiber total in some months. How soon the remaining optimization work will be complete is impossible to

predict. Company officials have said in the past that they won’t declare the plant is fully operational until they are ready to run 24/7. There are two other indicators they are getting close: the contracting for stover harvest has been kicked into high gear and an on-site enzyme production facility is under construction.

Expansion Ahead

Getting pretreatment right is the key step, says Mark Yancey, chief technology officer for D3Max. Plugged pipes and material handling are common issues, but so are the yield-robbing inhibitors produced if the chemical pretreatments are too strong. “If you don’t do pretreatment right, it ends up cascading down the line and impacting your yields,” Yancey says. “If your yields are half of what you want, your process isn’t going to be viable. Even a 25 percent reduction in yield would be the death knell for most projects.” He points to the BetaRenewables/BioChemtex plant in Crescentino, Italy, that went bankrupt this year. “That plant started up with a nameplate of 20 MMgy that was later changed to 12 MMgy. You can’t make

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READY TO RAMP UP: Following a successful demonstration at Ace Ethanol in Stanley, Wisconsin, D3Max is scaling up at the location to 4 MMgy and will join the list of cellulosic ethanol producers in 2019. PHOTO: D3MAX

a profit if you were planning on 20 and changed it to 12.” Yancey expects D3Max will join the list of cellulosic ethanol producers next year. The board and members of Ace Ethanol LLC in Stanley, Wisconsin, gave the green light to build a 4 MMgy cellulosic ethanol system using the D3Max technology. Approved in April, Yancey says the final site and remainder of plant engineering is being completed and Fagen Inc. will begin construction this summer with startup expected next year. The demonstration concluded last year at Ace Ethanol established a 7 to 8 percent ethanol yield putting the plant’s wet cake through the D3Max process. The distillers grains left after the fiber is converted to ethanol tests at 50 percent crude protein on a dry weight basis. Feed trials will be conducted this fall to establish its performance in poultry, swine and dairy. Yancey predicts corn fiber-to-ethanol will be the first cellulosic fuel to top 1 billion gallons, with multiple starch plants adopting one of the new technologies well before there will be multiple standalone, dedicated biomass plants. “It could be adopted as fast as corn oil was, because it is so profitable,” he says. The projected return on investment for D3Max is at one year with a 40 percent equity investment.

Two other projects on the drawing boards are making progress. ICM Inc.’s Element, being built in partnership with The Andersons Inc., is under construction. The 70 MMgy corn ethanol plant will include starch fermentation and be the first to adopt ICM’s Gen 1.5 technology to produce cellulosic ethanol from corn kernel fiber separated on the front end. The plant is expected to be fully operational by the end of next year. In California, Aemetis Inc. announced several milestones were met in March on its project development work for a 12 MMgy cellulosic ethanol plant in Riverside, California. Its engineering firm, ATSI, completed front end loading (FEL) engineering at the same time third-party engineers validated an ethanol yield of 77 gallons per ton. The Aemetis facility will convert agricultural waste biomass in an integrated gas fermentation facility combining InEnTec arc furnace gasification technology with LanzaTech gas fermentation. The thirdparty validation plus the completion of federal and state permitting, also in March, are key milestones for a pending $125 million USDA 9003 loan guarantee. Author: Susanne Retka Schill Freelance Journalist retkaschill@yahoo.com

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ETHANOLPRODUCER.COM | 41

ENZYMES

SWEET-SPOT

SEARCH Cellulose molecules are more complex than starch molecules, so employing the proper enzymes in cellulosic ethanol production is vital. Optimization research is ongoing. By Tim Albrecht

Cellulosic ethanol production has seen its share of hurdles as it has gotten off the ground. Creating fermentable sugar

from biomass feedstocks is tougher than creating that sugar in corn for ethanol, but that’s where enzymes come in. Researchers from a variety of companies have continuously been developing new enzymes that best suit the industry, says Jan Koninckx, global business director for advanced biofuels at DuPont.

42 | ETHANOL PRODUCER MAGAZINE | JULY 2018

“We continue to work on new enzymes,” Koninckx says. “We’re a marketback science company in the sense that we look for market need and focus our research efforts there.” Enzymes in the cellulosic sector have come a long way since the early stages of the industry. Researchers have been able to reduce the cost of enzyme production dramatically and delve into new ways to tailor products to producers’ processes, Koninckx says.

SMALL SCALE: Paria Saunders (left), Novozymes senior project manager, and Kendra Stallings (right), senior research associate, evaluate enzyme samples at Novozymes’ research center in Franklinton, North Carolina. PHOTO: NOVOZYMES

ETHANOLPRODUCER.COM | 43

ENZYMES

Current Market Needs

Historically, the price of enzymes for cellulosic ethanol production have been high, inhibiting large-scale production. “When we started in 2001, enzyme cost was higher than a gallon of gasoline,” says Thomas Schroder, vice president of commercial biorefining at Novozymes. “Since then, we’ve taken down cost more than 15 times. The cost has come down to a level to where the enzyme is no longer inhibiting economically deploying the technology. Right now, enzyme cost is maybe between the fourth- or sixth-largest component of production.” Novozymes has been producing enzymes for the cellulosic ethanol industry since 2009. The company has developed two more generations of its original Cellic product. The newest version, Cellic CTec 3, launched in 2012.

When Novozymes started, it was focused on creating a product that could apply to as many processes as possible, Schroder says. “Those first-generation products were products that were cutting across different types of substrates and processes. So, you could say it was a silver bullet that could be used for any application.” DuPont currently offers two product lines of enzymes to the cellulosic sector. One focuses on corn fiber, the other on cellulosic ethanol from biomass, such as corn stover, wheat straw or sugarcane bagasse, Koninckx says. “In the biomass product line, we don’t have a generally available product line, like we do in the corn fiber-related line,” he says. “In the biomass product line, we typically work one-on-one with the customer. We fine-tune and customize those kinds of products.”

Koninckx says the growth of the cellulosic ethanol industry will generate more research into the functionality of enzymes, driving the cost down even further. “If you go back say 10 years ago, the cost of enzymes has come down tremendously, but they’re still high compared to the cost of enzymes in grain ethanol,” Koninckx says. “Grain ethanol enzymes were costly at the beginning as well, so I believe the cost will come down over time.” Cost is crucial, says Delayne Johnson, CEO of Quad County Corn Processors in Galva, Iowa, which produces cellulosic ethanol from corn fiber. “We’re looking for the most cost-effective enzyme. That could be an enzyme that either has very good efficiency and conversion, one that has low cost, or a combination of the two.” For Steve Roe, CEO of Little Sioux Corn Processors in Marcus, Iowa, finding

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the right enzyme is about finding the right conversion rate. LSCP produces cellulosic ethanol using corn fiber. Roe says the plant isn’t loyal to one specific company and has trialed a handful of products since 2015. “We’re going to look for the highest D3 conversion, something that is relatively stable as far as storage ability, something that at least shows some promise toward distillers corn oil production and gas reduction in the dryer,” Roe says. “Between the three products we trialed, we couldn’t see any difference in corn oil production or spikes in gas usage, so we think they’re fairly equal. But if we take the cellulase out, our gas usage goes up and our corn oil yield goes down, so we know that it helps.” LSCP began producing cellulosic ethanol in October of 2017 after a couple years of enzyme experimentation. The plant will be switching to a DuPont enzyme as soon

DEVELOPMENTS AT DUPONT: A DuPont scientist works on cellulosic ethanol enzyme development. DuPont currently offers two product lines of enzymes to the cellulosic sector. One focuses on corn fiber and the other focuses on cellulosic ethanol from biomass. PHOTO: DUPONT

ETHANOLPRODUCER.COM | 45

ENZYMES

STRAINED SAMPLES: A Novozymes researcher analyzes fungal strains for enzyme development at Novozymes’ research center outside of Copenhagen, Denmark. PHOTO: NOVOZYMES

as the appropriate addendum to its D3 pathway is approved by the U.S. EPA.

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46 | ETHANOL PRODUCER MAGAZINE | JULY 2018

With new enzymes being produced and the ability to customize them to specific processes, the overall cost of cellulosic ethanol production has gone down, making it a more profitable market, Koninckx says. Customization of enzymes for cellulosic ethanol came along naturally as researchers delved into how to break down cellulose and hemicellulose faster. That breakdown to create fermentable sugars is harder in cellulosic biomass than it is in grain because biomass is more complex, Koninckx says. In corn-ethanol production, the starch in the grain is converted to sugar, but in cellulosic ethanol production, it’s the cellulose and hemicellulose in the biomass that is converted to sugar. “Although starch molecules and cellulose molecules are chemically similar, it is chemically easier to convert starch molecules, versus cellulose or hemicellulose molecules, into sugar molecules,” Koninckx says. He compares it to a human digestive system. It’s easy for humans to convert starch, such as a bagel, to sugar, which is similar to starch in corn-ethanol production. But a human digestive system cannot meaningfully extract energy out of raw biomass rich in cellulose, such as grass. “These enzymes function within a production process and those production processes are different based on different acidities, temperatures and so on,” Koninckx says. “A certain enzyme may be customized

CELLULASE STORAGE: Storage tanks hold cellulase at Little Sioux Corn Processors in Marcus, Iowa. LSCP began producing cellulosic ethanol in October of 2017. PHOTO: LITTLE SIOUX CORN PROCESSORS

for a certain set of conditions. That’s not any different than what you’d find in very many other enzyme applications. Enzymes are slightly modified to work best under a set of conditions, such as high-temperature liquefaction or low-temperature liquefaction in corn ethanol production. It’s the same concept in biomass.” Catering to a specific plant’s process and feedstock generates more value, Schroder says. “If you have a very broad spectrum of a multicomponent cocktail of enzymes, and if you have to keep reaching all these processes and feedstocks, that multicomponent becomes wider and wider, and needs to do more things,” Schroder says. “This sets a limit to a one size-fits-all enzyme solution. That also means that a producer’s cost picture could go up. So, it was a way to balance efficiency of cost.” Novozymes works together with its customers to ensure the “process speaks to the enzymes in the most optimized manner,” Schroder says. He adds that, together, Novozymes and its customers further improve hydrolysis, pH, temperature profiles and contamination control. “From our customizations you can see that’s where a lot of value is being harvested in the combination of the hardware and the software, so to say,” Schroder says.

Looking Forward

Further enzyme improvement could make the cellulosic ethanol production process more cost-effective. The goal is to make enzymes more efficient, Schroder says. “It’s about ensuring you can get the lowest proETHANOLPRODUCER.COM | 47

ENZYMES

NOVO LAB: Kendra Stallings (left) and Paria Saunders (right) discuss their research at Novozymes’ research center in Franklinton, North Carolina. PHOTO: NOVOZYMES

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AUDITS, CERTIFICATION, & TRAINING .BJOUBJOJOH RVBMJUZ UISPVHI q '4." )VNBO "OJNBM 'FFE q (.1 (.1 )"$$1 '".* 24 q *40 ('4* /PO (.0 *4$$ 4.&5"

duction cost per liter or gallon of ethanol produced. So, you will see our enzyme getting more potent, being able to do more. In the long term, say 20 years from now, when someone builds a second-generation plant, a producer will probably need less enzymes, because the enzymes are simply able to do more. “It’s a multicomponent cocktail of activities that needs to do different types of jobs, so what we see down the road is that these enzymes get more efficient and as they work closer with the process, the enzyme use cost will come down and efficiency will go up,” he adds. “You can also use the potency of the enzymes to lower the enzyme dosing. It all depends on the value of your ethanol and the cost of raw materials that go in. Basically, it’s about finding the sweet spot for the producers’ specific process.” Koninckx agrees. “I envision enzymes becoming more and more efficient in their functionality, so you can use less and less enzymes to get the same effect, or the same amount to get more effect,” he says. “Just like with grain ethanol, enzymes will become less of an important part of the cost equation. It won’t be done overnight, though.”

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48 | ETHANOL PRODUCER MAGAZINE | JULY 2018

Author: Tim Albrecht Associate Editor, Ethanol Producer Magazine 701.738.4922 talbrecht@bbiinternational.com

ACROSS GENERATIONS: The ethanol industry is increasingly considering power generation options, based on market changes and new technologies that make them more beneficial than they were 10 years ago. PHOTO: ISTOCK

50 | ETHANOL PRODUCER MAGAZINE | JULY 2018

ON-SITE ENERGY

A SHIFT IN

POWER New energy recycling technologies and changing market dynamics provide new options for electricity production, and revive opportunities for old ones. By Susanne Retka Schill

Improving energy efficiency has long been the goal at ethanol plants and, increasingly, driving down carbon intensity is equally important. Changing market dynamics are

opening the door for some new and old energy technologies. In particular, energy efficiency technologies that reduce carbon intensity provide an additional payback for those shipping to the West Coast. Under California’s Low Carbon Fuel Standard, a one-point drop in a plant’s carbon intensity is potentially worth 1 cent per gallon at spring values for carbon credits. Nick Bowdish, CEO of Siouxland Ethanol, an 80 MMgy plant in Jackson, Nebraska, reports the plant’s carbon intensity score dropped more than three points after installing a new heat recovery system and could drop another point or so when the second phase of the project is complete. With virtually all its ethanol shipped to California, Bowdish says lowering carbon intensity “takes economics that I would call average and turns them into economics that are pretty exciting.”

ETHANOLPRODUCER.COM | 51

UPGRADING ENERGY: Bioleap’s Dryer Exhaust Energy Recovery system installed at Siouxland Ethanol is capturing energy that used to go up the stack and upgrading it to medium pressure steam for use in the process. PHOTO: BIOLEAP INC.

Siouxland is the first plant to install Bioleap Inc.’s Dryer Exhaust Energy Recovery system. Wayne Mitchell, Bioleap CEO, explains the system recovers low-quality, lower-temperature energy from the dryer exhaust and upgrades it to mediumpressure, boiler-quality steam. “I’ve been in the industry since 1992, and we knew back then there was a lot of energy going up the stack, but nobody figured out a way to recover it,” he says. “Our system is unique and efficient.” Depending on the plant, the DEER system adds 15 to 20 percent more steam, he says. The return on investment on natural gas savings alone is three to four years. But many plants might see the real benefit of added steam in overcoming boiler capacity restrictions. And of course, for those shipping to California, a means of lowering carbon intensity. The DEER system also produces water that can replace fresh water, Mitchell says, at rates between 80 and 150 gallons per minute, depending on the plant.

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52 | ETHANOL PRODUCER MAGAZINE | JULY 2018

ON-SITE ENERGY

CHP Revisited

Running 24/7, year-round, ethanol plants are prime candidates for combined heat and power (CHP), using high-pressure steam to first generate electricity. Conventional electrical generation loses the remaining lower-pressure heat up the stack, making the process around 30 percent efficient. Using the steam in the ethanol process bumps the overall efficiency closer to 80 percent—an attractive greenhouse gas (GHG) reducer. Still, CHP has been relatively uncommon in the ethanol industry, partly because of the high capital cost and, in recent years, low natural gas prices. Also, many plants got favorable rates from rural electric cooperatives or other suppliers that welcomed increased loads. Those market dynamics are changing, says Dalia El Tawy, director of ther-

mal power solutions at Siemens Energy Inc. “The abundance of natural gas at really low cost is absolutely helping, and the fact that CHP results in one of the highest efficiencies for the overall system.” Some regions have incentives to adopt GHGreducing technologies, and in some cases, even larger utilities are interested in owning CHP plants at industrial sites, she reports. Other reasons to consider CHP include rising electric rates and aging equipment. “Even in areas where electricity is cheap, but not very reliable, the interruptions to the process drives manufacturers to having their own power as backup, or it could be their primary power and the grid is the backup,” she says. Historically working in large, utilityscale generation over 100 megawatts, Siemens’ portfolio has expanded to include

5 to 60 MW options. An acquisition from Dresser Rand added smaller reciprocating engine technology and another from Rolls Royce added industrial aeroderivative gas turbines. The smaller turbines, similar to airplane jet engines, offer flexibility, she explains. With a small footprint and quick, cold starts, they can be integrated with renewables like wind or solar with intermittent generation. Siemens works with manufacturers to determine the best configuration for CHP at each facility. “We ask customers to give us their bills for a year,” El Tawy says, adding the bills are used to evaluate loads. The company also offers financing services, including one where the plant pays for itself using the energy savings it generates. “The market is shifting from centralized, large power plants to more distribu-

ETHANOLPRODUCER.COM | 53

HARNESSING WIND: Yards of concrete and rebar form the base for one of three wind turbines that will supply power to a nearby ethanol plant in Nebraska. PHOTO: BLUESTEM ENERGY SOLUTIONS

tive generation,” El Tawy continues. “Siemens is very focused on this market.” Interest is growing among utilities for the same reason individual facilities contemplate CHP, she says, addressing concerns about system reliability caused by multiple factors: remoteness, an aging grid, frequent disruptive weather events or even the potential for man-made interruptions.

Win-Win-Win

In Nebraska, Perennial Public Power is adopting one of the new business models in supplying low-carbon renewable energy to an ethanol customer in its service region in York and Fillmore counties—Bluestem Energy Solutions. “Plant management approached us a few years ago about renewable energy, and we didn’t have anything at the time,” says Jamey Pankoke, Perennial general manager. By the end of the summer, three wind turbines will be supplying renewable power to the plant. The public utility worked with Bluestem to install the three turbines with a total 6.9 MW generating capacity, delivering power via underground lines to Perennial’s substation serving the plant. “We’ll have a

54 | ETHANOL PRODUCER MAGAZINE | JULY 2018

ON-SITE ENERGY

separate bill for the wind energy that will show how many kilowatt hours we delivered,” Pankoke says. “We will also sell the renewable electricity credits to them, if they want.” The business model solves a major issue for rural power suppliers. “We won’t be losing load,” Pankoke explains. Bluestem will own and operate the wind turbines, and Perennial will buy the power from Bluestem. “We have room under our wholesale contract for up to 10 percent of our peak load for renewables from other utilities,” he explains. “It’s not costing our other customers. The little bit of premium we get will cover our cost and a little above, and it keeps our largest customer.” Adam Herink, vice president of Bluestem Energy Solutions, describes it as a win-win-win model. “The local distribution utility is able to go through a partnership with Bluestem. We take on the operational risk, the debt and financial risk. We allow that local utility to make that transformative decision to stay in the 21st century and offer their largest and best industrial customers what they need.” Bluestem is technology agnostic, he adds, and will work with local distribution utilities to determine which combination of wind, solar or natural gas will work best. “These smaller, 5 to 10 MW projects are a resourceful way to do renewable energy,” Herink says. The intermittent nature of wind or solar generation is offset by integration with the utility, and the utility doesn’t take on the financial and operational risk, although it does enter into a long-term power purchase agreement with Bluestem. “It really is a winning model for rural utilities to invest back into their service areas, and offer their largest customers a turnkey solution so they don’t have to get into the electric generation business themselves.”

Perennial has a 25-year contract with Bluestem. Long-term contracts not being the norm in the ethanol industry, Pankoke says they negotiated a shorter, renewable contract with the plant. He hopes the plant will not only renew, but will continue to work with the utility as it adopts new technologies. “We want to see them expand,”

he says. “We want to help because of the value ethanol brings to our area—not only the jobs but the value of corn.” Author: Susanne Retka Schill Freelance Journalist retkaschill@yahoo.com

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CONTRIBUTION: The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

58 | ETHANOL PRODUCER MAGAZINE | JULY 2018

ANALYSIS STOCK #

DESCRIPTION

KEYWORD

STATUS

CURRENT QOH

CURRENT QUANTITY VALUE ISSUED

TOTAL COSTS

#OF ISSUES

LAST ISSUED

STOCKROOM : CENTRAL - CENTRAL STORES STOCKROOM IN-0027 OIL, LUBRICATION

OIL

SHELF STOCK

1021.00

0.00

818.00

0.00

169.00

5/3/17

IN-0046 GASKET, FULL

GASKET

SHELF STOCK

0.00

167.00

1895.75

5.00

4/7/17

IN-0024 LAMP-F, OSRAM

LIGHTING

SHELF STOCK

574.00

21255.22

69.00

2554.14

4.00

4/11/17

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95.00

26650.00

53.00

24550.00

12.00

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10.00

30.00

39.00

117.00

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11.00

253.00

35.00

805.00

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290.00

22.00

5395.00

5.00

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400.00

10400.00

16.00

26.00

2.00

3/17/16

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53.00

8300.00

15.00

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4.00

7/10/17

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2.00

10.00

13.00

65.00

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INVENTORY ON-HAND: This example of an Inventory Movement by Stockroom report shows the current quantity on hand, the current value, the total quantity issued and the total costs. SOURCE: MAPCON TECHNOLOGIES INC.

Ethanol plants all over the world want to improve their bottom lines. Business intelligence information can help. BI is the use of software and other tools to analyze a company’s raw data, helping plant staff make important decisions. A computerized maintenance management system (CMMS) can be a helpful

tool in gathering necessary information for analysis. Many systems allow users to create custom reports that will display everything they need to make critical decisions. What specifically can a CMMS help with? Human resources decisions: It’s important for any ethanol plant to know what its employees are getting done throughout the day. Using a CMMS, a re-

port can be run to analyze that, and help determine employee schedules to prevent unnecessary overtime expenses. For example, an open work order shows how much work a specific shift or crew has completed for the selected time frame. If a manager knows ahead of time how much work needs to get done by shift or crew, he or she can either reschedule some of the work if there’s too much—avoiding

ETHANOLPRODUCER.COM | 59

ANALYSIS

Top 5 Highest Issue Counts by Stockroom CENTRAL SECOND - 13

CENTRAL ANNEX - 1

MMEZZ - 320

CENTRAL - 1,305

MMEZZ SECOND - 65

KEEPING COUNT: The Inventory Movement by Stockroom report can be broken down by individual stockrooms (MMEZZ, CENTRAL, CENTRAL-ANNEX, etc.) to look at factors such as issue counts. SOURCE: MAPCON TECHNOLOGIES INC.

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Overspending is a symptom of uncontrolled inventory overtime—or change employee schedules if there isn’t enough work to keep everyone busy. A CMMS can also track which machine was repaired by which employee. This information can be important if work is done improperly. Inventory control: Overspending is a symptom of uncontrolled inventory. A CMMS allows users to track assets, including how many and where they are. Having this information readily available reduces the risk of duplicating orders. An inventory usage report can be run and used to help determine how many of each part or tool is required to keep the plant running. Systems can also include automatic reordering of parts, which helps ensure necessary items are always available, minimizing machine downtime. Furthermore, a CMMS can be used to find out which parts are not being used as frequently and make sure they are not overstocked. A report that shows which parts aren’t used often can also be beneficial in decision making. Unused parts can be discarded, freeing up space for additional parts. Predictive and failure analysis: Many systems are able to run reports that can be used to figure out when a machine is most likely to break down, simply by us-

ANALYSIS

Top 5 Total Costs by Stockroom ing historical data. Knowing this ahead of time can be a huge time and money saver. For instance, a report might indicate that a machine is likely to break a belt after running for 500 hours. A preventive maintenance (PM) task can be scheduled to replace the belt every 490 hours, thus preventing any unexpected downtime. Also, repairing machines before they completely break down helps prevent other items from breaking down as a result. Reports can be analyzed to identify patterns in equipment breakdowns, such as the time of year. For example, a report might show a piece of equipment is more likely to break down during cold months. Employees can prepare for this ahead of time by making sure the area where that piece of equipment is stored is adequately heated during that time. Information on the go: The majority of maintenance software programs now offer mobile applications. A mobile app allows employees to run numerous reports directly from their smartphones or tablets, making vital business intelligence information available virtually anywhere. This feature can be helpful when conducting meetings offsite. Moreover, techs can use the mobile app to add information to the CMMS right from the floor, increasing the accuracy of the reports. It’s more important now than ever for ethanol plants to know exactly where every dollar is going. That’s why having accurate and detailed BI reports for analysis is so important. A robust CMMS can be a critical part of this analysis. Author: Heather Wilkerson Marketing Coordinator Mapcon Technologies Inc. 800.922.4336 heather@mapcon.com

CENTRAL SECOND - 184

CENTRAL ANNEX - 0

CENTRAL - 41150.05

MMEZZ - 26604.25

MMEZZ SECOND - 2337 TOTAL COST: Reports can analyze multiple categories, including cost by stockroom. SOURCE: MAPCON TECHNOLOGIES INC.

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SOURCE: K·COE ISOM

TRANSPARENCY, CREDIBILITY AND

PROFITABILITY

Sustainability reporting helps boost plant efficiency, and affects top and bottom lines. By K·Coe Isom

Despite the energy required to produce ethanol, the industry has significantly improved its energy balance and continues to make impressive strides. These

improvements have existed within the ethanol industry mostly to navigate regulatory issues and market signals. The resulting efficiencies are generally accomplished without scrutiny from consumers and stakeholders. The U.S. has no requirements for sustainability data or verified certification. Inter-

national standards are in place, however, that require data and source certificates to export fuel or distillers dried grains. Many financial and sustainability experts say the process used by ethanol producers to monitor and measure efficiency is on the cusp of drastic change. Donna Funk, principal at

62 | ETHANOL PRODUCER MAGAZINE | JULY 2018

SUSTAINABILITY

K·Coe Isom, has observed an increase of financial benefits when companies utilize sustainability measures as a competitive advantage in the marketplace. “As stakeholders and consumers become more engaged with product transparency and environmental stewardship, the need for tracking and disclosing sustainability performance is growing,” she says. “What we’ve witnessed is that adopting these measures bodes well for ethanol plants—both small and large. By identifying a more meaningful advantage through the utilization of sustainability metrics for branding, marketing and optimizing the byproducts within the farm-to-fuel system, the end result often parlays into additional value on the top and bottom lines of the business.”

To the Future

To borrow the words of Bob Dylan, the times they are a-changin’ for ag renewablebased fuels and the sustainability story byproducts can tell. From a financial standpoint, other ag sectors have largely benefitted from the correlation between the monitoring and management of production efficiencies and the impact to business margins.

The beef industry is especially noteworthy, as it has engaged across the industry to implement sustainability standards for its supply chain, creating additional value for products. According to the North American Meat Institute, transparency and producer stories are creating loyal customers. The dramatic financial impact the beef industry has experienced is a result of greater distribution, better relationships with customers and additional suppliers, prompted by incentivized improvements. This comes as no surprise to Emily Johannes, director of ResourceMax sustainability services at K·Coe Isom. “The correlation of efficiency data and financial impact is tangible,” she says. “As consumers and stakeholders desire verified information from products, byproducts and the production process, sales gains are captured. Ethanol producers have a unique opportunity here because they provide a substantial feed source to an industry where sustainability really is emerging. The ethanol plants that validate, demonstrate and communicate their efficiencies by utilizing sustainability verification could easily see benefits far and above that of traditional measures.”

Sustainability and Credibility

Following the launch of its sustainable living program, consumer goods company Unilever reported 130 percent growth in its brand. This correlation was no coincidence. While performing sustainability audits can deliver reliable, verified process information to enhance the credibility surrounding products, it’s how the data is managed and improvements are demonstrated that provide growth opportunities. For example, as a necessity for creating a product—fuel, DDGS or other byproducts— ethanol plants already measure total water usage and total energy usage to monitor significant cost to the business, as well as input to running the plant. Performing a third-party sustainability audit would demonstrate how that key performance indicator (KPI) of energy or water use per pound, gallon or liter of product is tracking over time, how the record keeping is being maintained to ensure that the number is accurate and valid, and where it is stored and managed. This simple addition provides extra assurance around a metric that is already being tracked in the business. Perhaps more imporETHANOLPRODUCER.COM | 63

SUSTAINABILITY

KEEPING A RECORD: Tracking and providing data on the use of feedstocks in multiple products and markets can improve public perception surrounding ethanol. PHOTO: FILE PHOTO

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tant, it provides a credible source of information outside the plant itself, showing the plant is following sustainability protocol under the guidance of experts. “In the near future, it will no longer be about the immediate relationships within your sphere that are critical to your business,” Johannes says. “Capturing where your fuel is ultimately going, where DDGS end up, who your partners are, and recognizing their performance standards—these factors have all begun to garner attention from stakeholders that are looking at this industry. Beef has done a tremendous job marketing data transparency with effective results. They use quantitative and qualitative metrics within to explain where all their resources come from, how it runs within the system and what they’re doing.”

Economic Boost Through Perception

A single bushel of corn is often used in as many as 50 products. From that viewpoint alone, ethanol plants could better manage negative public perceptions by tracking and providing data that show the use of a product for many purposes and in many markets. Value is added through consumer engagement, and enhancing brand leverages a commodity into a better position. Using sustainability measures, producers can also share the environmental impact from farm to product, and the story of all byproducts that ethanol plants produce.

For example, if DDGS are exported to the livestock market overseas, having the ability to track what the livestock is being used for down the value chain (e.g., Cargill, Tyson, Perdue, etc.) means sustainability can be verified and leveraged to promote the brand. This data verification and positioning can increase profitability and value in the marketplace. Sustainability is a meaningful way to create opportunities that increase profit, reduce costs and manage risks—all adding to the bottom line. “Through credible source verification and performance audits, ethanol producers can demonstrate a sustainable business model that exudes resource efficiency and the management of natural resources,” Funk says. “Those who are able to manage what they’re doing well, make improvements and invest in top line have the potential for higher profitability.” Contact: Donna Funk Principal, K·Coe Isom 913.643.5000 donna.funk@kcoe.com

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