BLENDS

IN PURSUIT OF PURE

San Diego-based Pearson Fuels is showing its wholesale customers that E85 can be made almost entirely from biobased inputs using ethanol and renewable naphtha. The demand is there, but will the latter ingredient become available at scale? By Melissa Anderson

Gas prices are high in California. Very high. But Pearson Fuels is helping drivers reach their destination without breaking the bank, while helping the planet at the same time. The majority of Pearson’s products are found at the pumps of its wholesale customers—branded retail stations and a handful of independents that are currently selling a lot of E85 in Southern California—some of which is now made with a special, all-bio blend.

Doug Vind, a managing member of Pearson Fuels, tells Ethanol Producer Magazine that a small percentage of Pearson’s E85 is now being blended with renewable naphtha, a coproduct of renewable diesel production that not only provides some cost relief but reduces the fuel’s carbon intensity. In other words, the incentive to blend ethanol with renewable naphtha is not only a strategy for lowering blending costs but also producing a lower-carbon ethanol-based retail fuel— and one of the only pure biofuels available for retail sale in the U.S. It’s one of those rare instances when eco-friendly and economical converge.

“We are blending it up and creating an E85 where the 15 percent component is renewable naphtha,” Vind says. “It blends very well, and we’re just happy as can be. We would love to do more.”

That is, they’d like to get more naphtha—and the right kind. Producers of renewable diesel have a sizeable incentive to get their renewable naphtha to the West Coast, from qualifying for RINs to credits for LCFS-qualifying low-carbon fuels. There are hinderances though, as not all renewable naphtha can go straight into ethanol. Vind explains that the product’s suitability as an E85 ingredient depends on how its parent product, renewable diesel, is made. Different refining processes result in significantly different coproduct. That variability, and just finding enough of the right naphtha, makes it a still questionable blending agent for E85.

“We are going to try place renewable naphtha everywhere in our E85 system because California likes it,” Vind says. “It’s consistent with their low-carbon policies. It keeps us in the game because, while we used to just compete against regular unleaded, we now have to compete, from a policy standpoint, with the electrification movement.”

The easiest way for ethanol to compete against the past (fossil fuels) and future

TANKER TO TANK: Pearson Fuels supplies E85 to Southern California retailers and has recently experimented with offering an almost-pure biofuel version made of ethanol and renewable naphtha.

PHOTO: PEARSON

(EVs) is to be as renewable as possible and provide liquid fuel consumers with an ultra-low carbon bridge fuel. The demand is there, ethanol is abundant, but renewable naphtha is still not. While Pearson had initially been able to blend about 40 percent of its E85 output with naphtha, it had had to cut back as the supply couldn’t keep up with demand at their customers’ pumps.

“From our unique position in California, my philosophical belief is that the E85 gallon needs to be as close to fully renewable as possible,” Vind says.

Achieving this goal requires not only replacing the hydrocarbon component of E85, but also the denaturant used to make ethanol salable and transportable under federal law. In California, Vind explains, the ethanol industry must strive to eliminate any-and-all fossil-based product from E85 to stay relevant and compete with electric vehicles. With renewable naphtha replacing the hydrocarbon component of E85 (i.e., gasoline), it reaches new heights and instantly creates a totally green, affordable transportation fuel.

But it can perhaps go one step further, not only playing the role of hydrocarbon in E85 blends, but eventually becoming an authorized denaturant for ethanol. That’s a move Vind strongly supports as a way of making the E85 a truly renewable fuel.

“We need to stay relevant to the policy makers and politicians, we need to get into renewability,” Vind says. “We are still bringing in product that is denatured in the old-fashioned way. There is a lot of miles in between production, in most cases, and where we need it. Those logistics have to get figured out, and we have to make sure we are putting in the right product so we don’t have to further treat the fuel.”

Pearson Fuels is using renewable naphtha strategically, stretching its limited supply as far as possible, and waiting for the forthcoming wave of production as naphtha becomes a more ubiquitous byproduct of increasing renewable diesel production. As that happens, Vind firmly believes E85 is a tailor-made product and ideally suited for a long-term pairing with the biobased input.

“Naphtha seems like it will afford us the ability to use it as a renewable, cost efficient blend stock,” he says. “We have been moving toward trying to substitute for a while, and naphtha really does present itself as the candidate for doing that.”

The Renewable Fuels Association has been working behind the scenes to get the first piece in place to make renewable naphtha a major coproduct rather than an afterthought of the renewable diesel industry. Kelly Davis, vice president of regulatory affairs at the RFA, shared that a technical committee of the association submitted a notification to the Tax and Trade Bureau in April, requesting renewable naphtha be added to the authorized materials of denaturants for ethanol to be used for fuel.

“We do think it could be used as the hydrocarbon and denaturant in E85,” Davis says, explaining that the information they submitted to the TTC was based on data gleaned from a National Renewable Energy Laboratory study.

As Pearson found to be true, there is still only a very small stream within the renewable diesel manufacturing process that is making renewable naphtha suitable as a hydrocarbon source in E85. The issues of supply and specification have brought the product into greater focus for the RFA. The group commissioned

ON TOP OF THEIR GAME: Established 20 years ago, Pearson Fuels is the largest and fastest growing distributor of E85 in the state of California.

PHOTO: PEARSON

the aforementioned study with NREL to analyze all the current streams of supply of renewable naphtha to determine if it was possible to use it not only as the hydrocarbon but the denaturant. The results were positive.

“One of the things the industry would like is a greener, even less carbon intense E85,” Davis says. “The renewable diesel industry came on strong with a coproduct of renewable naphtha. There might be an opportunity for some ethanol producers to buy lower carbon intensity hydrocarbons like renewable naphtha and use it to lower their own carbon scores.”

Davis agrees that commercial volumes of renewable naphtha should grow quickly as both renewable diesel and sustainable aviation fuel production ramps up. She explains that as the production increases, producers will need to find markets for the product. While ethanol is the prime candidate to use it, the current supply uncertainty will need to be addressed quickly. However, it’s not the first step the RFA is taking to bring the renewable naphtha stream into ethanol production and high-blend formulations.

“Right now, I’m working on the feasibility,” Davis says. “Let’s make it so we can use it, and once we can use it, we can figure out

BIOFUEL BARGAIN: The E85 supplied by Pearson Fuels in California has been selling for about $2 a gallon cheaper than regular (E10) this summer at retail stations.

PHOTO: PEARSON

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With that in mind, there are specifications that Davis will be working on to establish a clearer standard for uniform renewable naphtha product for integration with ethanol.

“Cost will always be a concern here,” she says, but the quality specification is most critical. “When we ran all the chemistry data relative to the renewable naphtha, some of them were quite different. We do think that we will have to do something very similar to natural gasoline and request a certain specification. It will be broad ranging, it won’t exclude very much, but it will have to have a specification on the renewable naphtha to make it acceptable for our use.”

As soon as Davis gets the specifications set, the RFA plans to introduce renewable naphtha as the hydrocarbon capable of meeting ASTM standards for flex fuel. Doing this technical legwork is expected to pay off in states like California where low carbon fuel standards would give all-renewable E85 a major premium. From there, the business-to-business work of using the naphtha in ethanol begins.

“The whole gambit of the low carbon fuel standard is that it’s a business-to-business transaction for carbon,” Davis explains. “We need a national LCFS, but most people are afraid of it because it [might favor and incentivize] electric cars.”

Davis and Vind agree that a long transition exists between a fully electric fleet of vehicles and the fleet of today. From economic factors like affordability for consumers to EV charging and questions about electricity supply and sources, the electric fleet of the future is decades away. In the meantime, there’s this movement to make what’s in-between and beyond as green as possible through innovations such as renewable naphtha being used in place of both the existing denaturant and hydrocarbon of choice in E85.

Author: Melissa Anderson Contact: editor@bbiinternational.com

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