Biofuels: The immediate option to decarbonise transport

The very obvious first step is a research and development project to develop a National Information Artificial Intelligence (NIAI) for freight demand. The concept is that the data for all receipt of goods is collected and mapped over the country. This information is mapped out to show the demands for goods and products. It is used to firstly set up the national freight grid where producers bid to meet demand and the artificial intelligence optimises the logistics, consolidates the freight, selects the closest source and the most efficient modes, sets up the intermodal connections and dispatches, tracks and records the receipt of the freight. Incentives are available for development of small businesses to meet demand locally, which can be driven by the NIAI demand map. Government puts maximum investment into building an extensive national electric rail network with total connectivity to ports. An entrepreneur develops tracking and packing pods. Corporations increase investment in coastal shipping as it becomes the preferred mode for centre-to-centre trade. De-Value taxes are added to imported products according to their packaging intensity and product life. We only have two hours left in day three – can we get our projects over the line? The InTIME Team race to complete the final step. Now we must critically consider where all of this innovation in the national freight grid, the NIAI, and investment in networked rail and coastal shipping would lead us. Would it create enterprise and good work? Would it provide for needs? Would it grow the wellbeing economy while driving down the oil use? Would it reduce reliance on imported trucks and oil and grow local capability and productivity? We say yes. The InTIME Team has identified next steps that are practical and immediately do-able. Importing outrageously costly, and unproven hydrogen trucks and electrolysers, or committing to biofuel targets would lock in the business as usual for another political cycle. That would not be the preferred option. Note: InTIME Team with Professor Susan is a proposed BBC TV show, following the formula of the famous British television programme, Time Team with Tony Robinson (1994-2014).10

1 S. Krumdieck (2019) Transition Engineering, Building a Sustainable Future, CRC

Press, 254p. 2 www.canterbury.ac.nz/epecentre/research-and-innovation/professionaldevelopment/ 3 www.kiwirail.co.nz/our-story/history/ 4 R. Paling, M. King (2019) National Freight Demand Study, Ministry of Transport 5 S. Page, S. Krumdieck (2009) System-Level energy efficiency is the greatest barrier to development of the hydrogen economy, Energy Policy, 37(9): 33253335 6 S.C. Page, A.G. Williamson, I.G Mason (2009) Carbon capture and storage:

Fundamental thermodynamics and current technology, Energy Policy, 37(9): 3314-3324 7 S. Krumdieck, S. Page (2013) Retro-analysis of liquid bioethanol and bio-diesel in New Zealand, Energy Policy, 62: 363-371 8 www.csrf.ac.uk/2018/06/should-lorries-be-powered-by-hydrogen/ 9 A. Jackson, T. Jackson (2021) Modelling energy transition risk: The impact of declining energy return on investment (EROI), Ecological Economics, 185: 107023

10 www.youtube.com/channel/UCvmEISc6e4tLwn8TyS14ncw

Dr. Susan Krumdieck is a Professor of Mechanical Engineering and Chair in Energy Transition Engineering at the Heriot-Watt University, in Edinburgh, Scotland.

BY SHEENA THOMAS

YOU HAVE PROBABLY HEARD THE WORD “BIOFUELS” MORE IN THE LAST FOUR MONTHS THAN YOU HAVE IN THE PRECEDING FOUR YEARS.

Ever since the Government agreed “in principle” to a biofuels mandate (https://bit.ly/3fllGV4) and the Climate Change Commission released its draft advice (https://bit.ly/3vopBpJ), biofuels are finally having a moment in the spotlight and being recognised as a meaningful part of the decarbonisation puzzle, alongside electrification, and hydrogen in the medium to longer term.

This is not the first time a biofuels mandate has been floated in New Zealand. In 2008, the Clark Government introduced a biofuels sales obligation – basically a mandate that would require 3.4 per cent of total fuel sold to be biofuel by 2012. As it was pointed out during the announcement, had the 2008 sales obligation remained in place, New Zealand would have reduced emissions from transport by over six million tonnes by now. But what exactly are biofuels, is it safe for my engine and is it actually better for the environment are all questions that we often get asked. There are all sorts of different terms used to describe different types of biofuels, but here are the key things you need to know.

Types of biofuels, feedstocks and technology

Biofuels are made from bio-based materials and generally fall into two broad categories: “Conventional” and “Advanced”. Even these terms are used slightly differently internationally, but for the purposes of clarity, Conventional biofuels usually refer to established processes that produce biofuels that are subject to a “blend wall” because they still contain some oxygen molecules. This means that they must be blended with fossil fuel or its equivalent “renewable fuel” counterpart. Over the years, safe limits have been established and approved by original engine manufacturers (OEM). Typical examples of conventional biofuels include fatty acid methyl-esters, biodiesel, and ethanol.

Which brings us to Advanced biofuels. Advanced biofuels are made using more recent, more complex processing that typically requires hydrogenation. These biofuels are often called “renewable”, so usually referred to as “renewable diesel”, “renewable petrol”, and “sustainable aviation fuel (SAF)”. These fuels are hydrocarbons, effectively molecularly identical to their fossil-based counterparts, which is why they can be safely blended with conventional biofuels. While there are some

Technology Pathway Transesterification (Conventional) Fermentation (Conventional)

Can produce • FAME Biodiesel • Glycerol • Ethanol • Sugar Hydro-processed Esters & Fatty Acids / Vegetable Oils (HEFA/HVO) Gasification + Fischer-Tropsch Gasification + LanzaTech process Pyrolysis Alcohol to Jet Catalytical hydro-processing

• Renewable diesel • SAF • Renewable petrol • Bio-LPG • Renewable diesel • SAF • Renewable petrol • Bio-LPG • Ethanol • Renewable diesel • SAF • Renewable petrol • Bio-LPG • SAF • Renewable diesel • Bio-LPG • SAF • Renewable diesel • Renewable petrol • Bio-LPG

Application • Any diesel-based applications including vehicles, shipping, generators and equipment. • Animal feed, pharmaceuticals etc

Feedstocks Tallow, used cooking oil, vegetable oils, tall oil • Petrol vehicles • Any diesel-based applications. • Jet aviation fuel • Petrol vehicles • LPG applications • Any diesel-based applications. • Jet aviation fuel • Petrol vehicles • LPG applications • Petrol vehicles • Any diesel-based applications. • Jet aviation fuel • Petrol vehicles • LPG applications • Blending with jet aviation fuel. • Any diesel-based applications • LPG applications • Any diesel-based applications. • Jet aviation fuel • Petrol vehicles • LPG application

Corn, sugarcane, wheat, beets and other similar crop Tallow, used cooking oil, vegetable oils, tall oil Woody biomass, other lignocellulosic biomass Woody biomass, other lignocellulosic biomass, municipal solid waste Woody biomass, other lignocellulosic biomass, municipal solid waste Ethanol, iso-butanol Woody biomass, other lignocellulosic biomass, municipal solid waste

Blend ratio/ blend wall • 7% (20-30% for some equipment) • 10% • 80% (renewable diesel) • 50% (SAF) • Over 20% (renewable petrol) • 80% (renewable diesel • 50% (SAF) • Over 20% (renewable petrol) • 10% • 80% (renewable diesel • 30-50% SAF • Over 20% (renewable petrol • 50% SAF • 80% (renewable diesel • Over 20% (renewable petrol) • 50% SAF • 80% (renewable diesel • Over 20% (renewable petrol)

Lifecycle emissions reduction (per litre of pure B100 biofuel) ~80% (if using sustainable feedstock) 0-85% (depending on feedstock) ~80% (if using sustainable feedstock) ~80% (if using sustainable feedstock) ~70-80% (if using sustainable feedstock) ~80% ~70-80% ~80%

Maturity Full scale commercial Full scale commercial Full scale commercial Small scale commercial pilots Small scale commercial Small scale commercial pilots Small scale commercial Small scale commercial pilots

Z biodiesel plant

blending limits, particularly for SAF, these are quite high – in the range of 80 per cent for renewable diesel, and 30 to 50 per cent for SAF.

Above is a summary of the main, proven biofuels manufacturing pathways that are either at commercial scale or close to commercial scale. Note that this is not a complete list of all possible technologies.

Not all biofuels are created equal

As illustrated above, there is a range of technologies with the ability to use a range of feedstocks to produce biofuels. So, it is important to note that not all biofuels are created equal. While the lifecycle emissions of biofuels can be impacted by things such as the type of energy used in its manufacture, the main indicator of the sustainability of a particular biofuel is the feedstock used to make it. Unsurprisingly, biofuels associated with land-use change (such as palm oil) or that compete with food production, have lower environmental benefits than biofuels made from woody biomass waste like slash, by-products such as inedible tallow, or feedstocks that are carefully farmed as rotation crops that improve the quality of the soil. biofuels we manufacture or import. For example, biofuels made from crops or plantations that have caused deforestation would be arguably worse from a sustainability perspective than the use of fossil fuels. The good news is that many of our major trading partners have mandated biofuels for over a decade and there is a lot we can learn from their experience and how they have since tightened up their policies to maximise the emissions reduction they can achieve through biofuels. With the right policy settings, biofuels can start displacing even more than the amount modelled by the Climate Change Commission (140 million litres by 2035), sooner and sustainably.

Local production

For local production, it is particularly important to take into account what is best suited to New Zealand – what will be the hardest to decarbonise sectors without biofuels, which feedstocks are abundant, and how can we also ensure that the co-benefits of local production are realised here in New Zealand.

Z Energy decided to invest early in biodiesel production, despite a lack of enabling policy at the time because of our commitment to providing lower carbon options for our customers. It was a deliberate choice to produce biodiesel instead of ethanol, because heavy transport vehicles that rely on diesel are harder to decarbonise than light vehicles that can be electrified. It was also a deliberate choice to use inedible tallow as a feedstock as it is a by-product of the agricultural industry, does not compete with food production, and already has meaningful volumes – enough to supply around seven more biodiesel plants similar in size to our plant in South Auckland. We began production in November of 2018, and have been supplying customers with B5 biodiesel (5 per cent biodiesel blended with 95 per cent mineral diesel) since that time. In 2020, we hibernated production at the plant because of the sustained, steep increase in the price of tallow – driven by demand by overseas biofuel producers selling into subsidised markets – and an understandable lack of appetite from many customers, grappling with the implications of COVID-19, to pay slightly more for a cleaner fuel. Some customers have continued to use biodiesel to reduce their transport emissions, and we currently import biodiesel from Australia to supplement our own biodiesel stock and meet this customer demand.

Z Energy Chief Executive Officer Mike Bennetts speaks at the company’s south Auckland biodiesel plant, surrounded by Climate Change Minister Hon James Shaw, and Prime Minister Rt Hon Jacinda Ardern. Photo: Getty Images

While an import supply chain for biofuels will continue to be used, we would like to see more local production come about as a result of this mandate.

As Crown research institute Scion has previously summarised in the New Zealand Biofuels Roadmap (https://bit.ly/3yGpTKX), local production of biofuels would: • Reduce our greenhouse gas (GHG) emissions;

• Help us meet our international GHG reduction commitments;

• Rejuvenate regional economic and employment growth; • Make New Zealand less dependent on oil imports; and • Maintain access to international markets for our goods and services. The report estimates that even establishing a biofuels industry in one region alone could create over 1,000 new direct, indirect and induced jobs.

Engine compatibility

As for whether biofuels are compatible with your engine, the short answer is yes, within the guidelines of the above table. Europe has mandated biofuels for over a decade. It is not a new fuel, and it is used safely around the world, even for aircraft. The Motor Industry Association has provided guidance on vehicle compatibility here in New Zealand, so it is easy to check OEM guidance on conventional biofuel blend limits.

Z also has real world experience of supplying biodiesel to customers. Since 2018, we have supplied customers’ bulk tanks, private truck stops, as well as Z Highbrook in Auckland, which is a truck stop accessible to anyone with a Z card. There have been no issues with our product, it simply lowers your emissions. While some vehicles and equipment are compatible with higher biodiesel or ethanol blends, there are risks associated with higher blends when used in vehicles that are not compatible, such as reactions with fuel system elastomers and corrosion of fuel components respectively. This is not an issue with advanced biofuels.

The low-hanging fruit

Biofuels are the low-hanging fruit to lower transport emissions because they are a realistic option right here, right now for our existing fleet, at the same time as we accelerate the uptake of electric vehicles. Between the Commission’s draft advice and the Government’s recently announced package of measures to tackle decarbonisation, it seems like biofuels will become increasingly available in New Zealand, giving transport and logistics operators lower carbon options for their existing fleets.

Sheena Thomas Strategy Lead – Z Energy Sheena leads the development and delivery of low carbon fuel options for Z Energy. Her interest and expertise are in accelerating the low-carbon transition in a way that delivers value for New Zealand. She has worked in the transport energy industry for over 10 years, and has a background in strategy, communications, and government relations.