Biobased Diesel Summer 2021

TM

2021 Biannual / SpringSummer & Summer 2021

Bagram Biodiesel

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A Model for Other Military Bases

SAF, Renewable Diesel & Biodiesel News [p.8]

Recent Headlines from Around the World

Frenetic Feedstock Market Sky-high Prices, Shrinking Stocks & Extreme Renewable Diesel Demand

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BIOBASED-DIESEL.COM

Biobased DieselTM Summer 2021

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[3]

FEATURE |

FUEL YOUR BOTTOM LINE WITH BIODIESEL.

Illinois-grown soybeans are the key to increased grower profit potential and a source of high-quality, sustainable fuel. That’s because they are used to make B20, a blend of 80-percent petroleum diesel and 20-percent biodiesel. Fueling your farm equipment with B20 is like putting money back in your own pocket because it adds more than 10% to the price of soybeans. To learn more about the benefits of biodiesel, visit ilsoy.org/about-biodiesel.

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www.biobased-diesel.com

ADVERTISERS: For advertising sales please call 218-745-8347, email editor@biobased-diesel.com or visit our website at www.biobased-diesel.com.

Features

VOL. 1 ISSUE 1 | CONTENTS

28

32

EDITOR AND PUBLISHER: Ron Kotrba editor@biobased-diesel.com GRAPHIC DESIGN: Doug Conboy Raised Brow Productions MAGAZINE PRINTING: Century Publishing

Biobased DieselTM is published by RonKo Media Productions LLC. Subscriptions are free of charge to those in the United States. To subscribe, visit biobased-diesel.com and fill out the contact form in the website footer. For subscribers outside the United States, a digital version of the magazine will be emailed. For those located outside the United States who wish to have a print version of Biobased DieselTM mailed, please email editor@biobased-diesel. com with the request. A nominal postage fee may be required. For mail correspondence, write to: RonKo Media Productions PO Box 86 Warren, MN 56762 All rights reserved. No part of this publication may be transmitted or reproduced in any form without written permission from the publishers.

The information contained within has been obtained from sources believed to be reliable. Neither the publisher nor any other party assumes liability for loss or damage as a result of reliance on this material.

Appropriate professional advice should be sought before making personal, professional, or financial decisions. Outside of our staff authors, articles written by providers or professionals are invited authors and represent the opinions of that particular individual, business, group or organization.

36 Bagram Biodiesel.......................................................................... 28 As U.S. troops withdraw from Afghanistan, the Bagram biodiesel program, which uses Springboard Biodiesel equipment to convert UCO to fuel, is a model to follow.

By Ron Kotrba

A Frenetic Feedstock Market....................................................... 32 The past may be prologue as high feedstock prices, low stocks and growing demand from the quickly emerging renewable diesel industry are examined.

By Pete Moss

The RepCat Process: From the Worst Feedstock to the Best Biodiesel......................... 36 More companies are leveraging the high-end technology to successfully transform lowquality feedstock, including Cat 1 fats and sewer grease, into top-shelf biodiesel.

By Manfred Baumgartner

Departments Editor’s Note.......................... 6 News....................................... 8 Information......................... 14

©Copyright 2021 RonKo Media Productions LLC

Perspective.......................... 20

Advertiser Index Advanced Fuel Solutions Inc...................39 American Lung Association....................31 BDI-BioEnergy International GmbH..........40 Biobased DieselTM Daily.................... 6, 19 Biodiesel Coalition of Missouri..................7 CoverCress Inc.....................................17 Crown Iron Works....................................3

Frazier, Barnes & Associates...................34 Illinois Soybean Association.....................4 Inflectis Digital Marketing.......................18 Iowa Biodiesel Board.............................27 Missouri Soybean Merchandising Council....7 National Biodiesel Board................ 11, 25 Ocean Park Advisors..............................13

Optimus Technologies............................35 Pacific Biodiesel....................................12 Plasma Blue.........................................26 Springboard Biodiesel............................30 Teikoku USA Inc......................................2

Biobased DieselTM Summer 2021

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EDITOR’S NOTE |

EXCITING TIMES In my more than 16 years covering the biobased diesel sector, I don’t recall a more active, exciting time than now, except maybe in the heyday of the mid- to late 2000s when commercial-scale biodiesel projects were developing left and right shortly after the $1 per gallon blenders tax credit went into effect. Back then, no one ever heard of sustainable aviation fuel (SAF) or even knew much about renewable diesel. Today, those subsectors of the biobased diesel industry are pushing the limits on what can be done. It took U.S. biodiesel producers nearly 20 years to reach 1 billion gallons of production. In just a few short years, domestic renewable diesel and SAF manufacturing capacity could likely reach several billion gallons, thanks to the groundwork laid by biodiesel.

The pace at which developments are being announced today is simply remarkable. As this inaugural print issue of Biobased DieselTM was in production, several new renewable diesel and SAF projects were unveiled, along with much-needed newbuilds and expansion projects upstream in the oilseed crush segment. For instance, within days of each other, Cargill announced it was building a new 1 million ton canola crush plant in Regina, Saskatchewan, while Viterra revealed its own plans to build a 2.5 million ton canola processing plant in the same town. In the moments between those two announcements, Washington state passed a low carbon fuel standard. Then, just a couple of days later, Neste said it would enable half its Rotterdam renewable diesel plant capacity to make more SAF, while Seaboard Energy revealed construction of an 85 million

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gallon per year (mgy) renewable diesel facility in Hugoton, Kansas.

Then, to top it off, Phillips 66’s Rodeo Renewed project at its San Francisco Refinery, where it has been converting a hydrotreater to initially make 120 mgy of renewable diesel, is ahead of schedule and is now actually producing. All of this happened within the days after I completed the news sections of this magazine and before I wrote this editor’s note. After writing it, ADM unveiled plans for a new soy crush plant in North Dakota.

To stay up to date on the latest events, be sure to check out Biobased DieselTM Daily at biobased-diesel.com. If you fill out the short contact form in the website footer, not only will you receive the free print version of the magazine, but you will also get the weekly e-newsletter, Biobased DieselTM Weekly, free of charge as well. It’s the best, most efficient way to get the latest weekly news in this exciting, rapidly growing sector.

I hope you enjoy the magazine. And if you have any news you would like to share, drop me a note at editor@biobased-diesel.com.

I welcome hearing from you. Until the next issue, stay safe and productive!

Ron Kotrba Editor and Publisher

BIODIESEL MISSOURI MADE

Missouri is the leading soy-based biodiesel producer in the nation. Biodiesel is a renewable, energy-efficient, clean-burning fuel made from Missouri’s top agricultural commodity- soybeans.

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Biobased DieselTM Summer 2021

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NEWS |

Biodiesel News Briefs Recent trade, production, business and personnel highlights from the global biodiesel community.

At 930 million gallons, EU-27 imports of biodiesel in 2020 were down 16 percent from 2019. Imports from Argentina were down considerably, and Indonesian shipments to the EU dropped 83 percent from the year before. Imports from Malaysia fell 43 percent. EU imports from China grew in 2020. In other EU news, the European Food Safety Authority recently approved Austria-based BDI-BioEnergy International’s RepCat biodiesel process as means to recycle high-risk Category 1 animal fats. RepCat uses a repeatable catalyst and converts low-quality feedstock into high-quality biodiesel. [BBD] -----------------------------Brazil’s government has temporarily scaled back its national biodiesel use require­ ment from 13 to 10 percent amid high soybean demand and prices and low stocks, which have pushed up prices and compressed margins. Also in Brazil, Petrobras’ wholly owned subsidiary Petrobras Biocombustível S.A. completed the sale of its 50 percent stake in BSBios to RP Participações em Biocombustíveis S.A. ECB Group controls RP, which now holds 100 percent interest in BSBios, owner of two 109 million gallon per year (mgy) biodiesel plants in Rio Grande do Sul and Paraná. [BBD] -----------------------------Aemetis Inc. subsidiary Universal Biofuels in India was selected by the Andhra Pradesh State Road Transport Corp. to supply approximately 800,000 gallons per month of biodiesel to fuel public transport buses in the region. The state of Andhra Pradesh has a population of 84 million people and 28,000 villages. [BBD] -----------------------------Canary Biofuels Inc. acquired Invigor Bioenergy Corp. and its biodiesel plant in Lethbridge, Alberta, Canada. The company plans to open the 20 mgy biodiesel refinery late this year. [BBD] -----------------------------Simon Doray, CEO of Quebec, Canada-based biodiesel company Innoltek, was honored with recognition for his sustainability efforts by Delta Management Group, founder of the Clean50 Awards, with the Clean16 designation. Innoltek produces more than 3 mgy of biodiesel from waste materials and plans to double production in 2022. [BBD] [8]

www.biobased-diesel.com

Darling Ingredients has shut down its two biodiesel production facilities in Montreal, Quebec, Canada (Rothsay), and in Butler, Kentucky (formerly Griffin Industries). The Rothsay plant was capable of producing 12 mgy while the Kentucky facility was scaled at 2 mgy. The feedstock will be diverted to Diamond Green Diesel, a renewable diesel joint venture between Darling and Valero. [BBD] -----------------------------U.S. Energy Information Administration data show domestic annual operable biodiesel production capacity has contracted by 175 mgy, from 2.48 billion gallons in 2020 to 2.3 billion gallons in 2021. Michael Conner with EIA said the agency dropped 11 plants from its biodiesel capacity totals because it was confident they were shut down. [BBD] -----------------------------A recent report by Ocean Park Advisors shows that 2020 was the slowest year in North American biodiesel plant mergers and acquisitions in the past decade. No operating biodiesel plants changed hands last year, according to the report. [BBD] -----------------------------USDA announced 12 grants totaling $7.1 million to expand consumer access to biodiesel under the Higher Blends Infrastructure Incentive Program. The grants will support nearly 140 mgy in projects from New Hampshire to Hawaii. [BBD] -----------------------------San Diego-based New Leaf Biofuel completed a major expansion. The entire system was redesigned and upgraded to grow capacity from 5 to 12 mgy. New Leaf, which collects used cooking oil and converts it into biodiesel, is owned by Baker Commodities. [BBD] -----------------------------Biodiesel producers World Energy and Community Fuels are partnering to increase access to low-carbon fuels throughout California. World Energy will provide feedstock and advanced biofuels for distribution in northern California.

Community Fuels’ terminal operations will soon allow for distribution of 85 mgy of renewable diesel and biodiesel blends and will reach 200 mgy in 2022 to coincide with World Energy’s Los Angeles renewable diesel plant expansion. [BBD]

Jenna Long PHOTO: PACIFIC BIODIESEL

Pacific Biodiesel produced record volumes at its manufacturing plant on the Big Island of Hawaii in 2020. More than 5.8 million gallons was produced at the site, the highest production volume ever achieved since opening in 2012 and surpassing the facility’s rated capacity estimates of 5.5 mgy. Operations director Jenna Long said projects initiated before the pandemic—like recovering previously composted portions of trap grease—have panned out, helping to reduce costs and increase local feedstock availability. [BBD] -----------------------------FutureFuel Corp. produced record volumes of biodiesel in 2020 from its 59 mgy facility in Batesville, Arkansas. The company partly credits certainty with the $1 per gallon biodiesel tax credit, which is in effect through 2022. [BBD] -----------------------------Evonik Corp. completed a major capacity expansion of its sodium methylate production facility in Mobile, Alabama. The plant is now capable of producing up to 90,000 metric tons per year. [BBD] -----------------------------Optimus Technologies is partnering with Can-Am Custom Trucks to make its Vector System, a technology that enables diesel engines to operate on 100 percent biodiesel, available via ship-thru installation on new Freightliner or Western Star trucks. Optimus also partnered with Renewable Energy Group Inc. to help its fleet customers increase B100 use via Optimus’ system and through investing in biodiesel infrastructure. [BBD] -----------------------------Winter oilseed cover-crop developer CoverCress Inc. raised another $8 million to fund its final stage of crop development and scale-up for its first commercial planting for fall 2022. Bunge Ventures Ltd. led the Series B-1 financing round. REG Ventures LLC was another new strategic investor. [BBD]

| FOOD

Sustainable Aviation Fuel News Briefs Select SAF project development, production, use and advocacy news from all corners of the globe.

United Airlines announced in April that, through its new EcoSkies Alliance program, more than a dozen global corporations will contribute toward the purchase of approximately 3.4 million gallons of sustainable aviation fuel (SAF) in 2021. The airline has committed to reducing its greenhouse gas (GHG) emissions 100 percent by 2050. In addition, United is helping individuals connect with elected representatives to advocate for policies that would make air travel more sustainable. [BBD] -----------------------------Rep. Julia Brownley of California reintroduced the Sustainable Aviation Fuel Act in February to incentivize SAF production in the U.S. and establish an aviation-only Low Carbon Fuel Standard similar to California’s transportation-wide LCFS. [BBD] -----------------------------At a March 25 hearing, U.S. Transportation Secretary Pete Buttigieg signaled his strong support for SAF, and discussed various options for increasing its availability and use. [BBD] -----------------------------Phillips 66 and Southwest Airlines have signed agreement to advance commercialization of SAF, focusing on public awareness and R&D. The arrangement also sets the framework to explore future supply agreements between the airline and Phillips 66’s Rodeo Renewed renewable diesel and SAF project in California. [BBD] -----------------------------Alaska Airlines and SkyNRG Americas have committed to increased investment in SAF. SkyNRG Americas will initially focus on development of waste-based SAF production facilities to supply western U.S. airports. The pair will advocate for public policies to accelerate development of the SAF industry and infrastructure. [BBD] -----------------------------LanzaJet Inc. has awarded an EPC contract to Zeton for fabrication and construction of its first alcohol-to-jet (AtJ) facility in Soperton, Georgia, scaled at 10 million gallons per year (mgy) called Freedom Pines Fuels. LanzaJet also contracted with Burns & McDonnell to provide engineering design for utilities and infrastructure. The plant is expected to come online in 2022. The company recently gained investments from Shell and British Airways. [BBD] -----------------------------Total has begun producing SAF at its La Mède biorefinery in southern France and its Oudalle facility near Le Havre. The SAF, made from used cooking oil (UCO), will be delivered to French airports starting this spring. [BBD] -----------------------------JetBlue released new environmental, social and corporate governance (ESG) targets, which include increased use of renewable energy to help achieve net-zero carbon emissions in operations by 2040. By 2030, JetBlue plans for 10 percent of its total jet fuel consumption to be from blended SAF. [BBD] -----------------------------KLM has renamed its Corporate BioFuel Programme the KLM Corporate SAF Programme, bringing the program attention to businesses outside the Netherlands. [BBD]

The first commercial passenger flight from Amsterdam Airport Schiphol to Madrid was carried out recently on a blend of sustainable synthetic kerosene made from CO2, water and renewable energy.

PHOTO: KLM

NetJets made an undisclosed, “significant” investment in WasteFuel, a company that plans to convert 1 million tons a year of landfill waste into 30 mgy of SAF in Manila, Philippines.

NetJets will buy a minimum of 100 million gallons of WasteFuel’s SAF over 10 years. [BBD] -----------------------------Air Canada has set a goal of net-zero GHG emissions throughout its global operations by 2050. To reach this, Air Canada has set absolute midterm GHG net reduction targets by 2030 in its air and ground operations and has committed to investing $50 million in SAF and carbon reductions and removals. [BBD] -----------------------------American Airlines reached an agreement with Kuehne+Nagel to allocate a portion of the carbon-reduction benefit the airline generates through its use of SAF to the logistics company. The agreement is said to be the largest SAF collaboration between a freight-logistics company and an airline. [BBD] -----------------------------FedEx Corp. has set a goal for its global operations to reach carbon neutrality by 2040. The company is designating more than $2 billion of initial investment in vehicle electrification, sustainable energy, and carbon sequestration. FedEx expects to obtain 30 percent of its jet fuel from alternative sources by 2030. [BBD] -----------------------------Shell intends to produce SAF in the Wesseling section of its Rhineland refinery in Köln, Germany. It plans to set up a commercial bio-power-to-liquid plant to produce 100,000 tons per year of synthetic kerosene and naphtha by end of 2025. [BBD] -----------------------------Essar Oil (UK) Ltd. has joined forces with Fulcrum BioEnergy and Essar subsidiary Stanlow Terminals to create a new $835 million, 26 mgy facility, Fulcrum NorthPoint, to convert nonrecyclable household waste into SAF by late 2025 in North West England. [BBD] -----------------------------Repsol recently produced an initial batch of 10,000 tons of coprocessed aviation fuel with an SAF content of less than 5 percent at its industrial complex in Tarragona, Spain. Similar coprocessed SAF will be manufactured at other Repsol facilities in Spain. [BBD] -----------------------------Boeing recently committed to ensuring its commercial airplanes are capable and certified to fly on 100 percent SAF by 2030, and to work with regulatory authorities to raise the blending limit—now 50 percent—for expanded use. [BBD]

Biobased DieselTM Summer 2021

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NEWS |

Renewable Diesel News Briefs

Project development news from North America and around the world.

Calumet Specialty Products intends to produce renewable diesel at its petroleum refinery in Great Falls, Montana.

North America

Love’s Family of Companies, Cargill and their affiliates have entered into a 50/50 joint venture (JV), Heartwell Renewables, to produce and market renewable diesel. The JV will build an 80 million gallon per year (mgy) renewable diesel plant in Hastings, Nebraska, using tallow feedstock. Construction will begin this spring and the plant is expected to be operational in 2023. Musket will transport and market the product in the United States. [BBD] -----------------------------Canadian oil refiner Tidewater Midstream and Infrastructure Ltd. has chosen HydroFlex renewable diesel process technology and H2bridge for renewable hydrogen production, both supplied by Haldor Topsoe, at its 46 mgy standalone project at its existing Prince George Refinery in British Columbia. The biorefinery will include a pretreatment unit to provide multifeedstock capability. The plant could begin operations in 2023. Tidewater is also undertaking a canola coprocessing project expected to be complete by end of year. [BBD] -----------------------------Phillips 66 has completed conversion of a hydrotreater at its Rodeo, California, refinery, enabling production of 120 mgy of renewable diesel. Full conversion, allowing production of between 650 mgy and 800 mgy of renewable diesel, sustainable aviation fuel (SAF) and other renewables, is targeted by early 2024. Australiabased Worley has been awarded a front-end engineering services contract at the site. In April, Phillips 66 announced a minority invest­ ment stake in Shell Rock Soy Processing, a crush facility being developed in Iowa. Once operating, the crush plant will yield more than 61 mgy of soybean oil, and Phillips 66 is contracted to take all of it. The Rodeo biorefinery will utilize multiple feedstocks including soybean oil, used cooking oil (UCO), fats, greases, and other vegetable oils. [BBD] -----------------------------In March, Marathon Petroleum Corp.’s board of directors approved plans to convert its Martinez, California, refinery into a renewable diesel manufacturing facility. The Martinez facility is expected to start producing renewable diesel in 2022, with a build to full capacity of 730 mgy in 2023 using animal fats, distillers corn oil (DCO) and soybean oil. In North Dakota, Marathon expects its retrofitted Dickinson refinery to be producing renewable diesel at full capacity this spring, hitting its annual run rate of 184 mgy from soybean oil and DCO. [BBD] [10]

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In a January letter to shareholders, Richard Palmer, president and CEO of Global Clean Energy Holdings Inc., said the company plans to complete its conversion of a Bakersfield, California, petroleum refinery in early 2022. The biorefinery will use Haldor Topsoe technology to produce 230 mgy. GCEH’s upstream feedstock business, Sustainable Oils Inc., owns a growing portfolio of intellectual property in camelina and expects farmers to plant up to 225,000 acres of the crop in 2022, the oil from which will feed GCEH’s renewable diesel plant. [BBD] -----------------------------CVR Energy Inc. has also selected Haldor Topsoe technology for retrofitting an existing hydrocracker at its Wynnewood, Oklahoma, petroleum refinery to produce 100 mgy of renewable diesel from soybean oil. In December, CVR Energy’s full board of directors approved the $110 million project, which is expected to be complete later this year. [BBD] -----------------------------In January, both boards of directors for Darling Ingredients Inc. and Valero Energy Corp. approved their 50/50 JV, Diamond Green Diesel, to proceed with construction of a new 470 mgy, $1.45 billion renewable diesel production facility at Valero’s Port Arthur, Texas, refinery. Once complete in 2023, DGD’s annual renewable diesel production capacity in Norco, Louisiana, and in Texas will be a combined 1.2 billion gallons. [BBD] -----------------------------Calumet Specialty Products revealed interest in making renewable diesel at its Great Falls, Montana, refinery. The company seeks an equity investor, or a strategic partner in need of renewable diesel supplies. In February, the company said it could utilize its oversized hydrocracker to process up to 184 mgy of renewable feedstock. In May, the company said it planned to use soybean oil upon initial start-up in 2022. [BBD] -----------------------------Canadian startup Covenant Energy Ltd. is proposing to build a standalone renewable diesel and SAF plant scaled between 79 and 86 mgy in southern Saskatchewan using canola oil. Once financing is secured and regulatory permits approved, Covenant Energy hopes to start production by end of 2023. [BBD]

International

After weighing options to grow its renewable diesel and SAF production capacity in Porvoo, Finland, or in Rotterdam, the Netherlands, Neste Corp. finds significant cost benefits— logistics, construction costs, and low-carbon hydrogen supply— of moving forward in Rotterdam. In addition to its expansion project in Singapore, the company has existing renewable diesel manufacturing sites in Porvoo and Rotterdam. Neste recently closed on acquisition of a Bunge plant in Rotterdam, which it will use for feedstock pretreatment. [BBD] -----------------------------In related Rotterdam news, Vopak is expanding tank capacity in the port to handle more storage of waste-based feedstocks such as tallow and UCO. Vopak is adding 16 tanks with 17 million gallons of additional storage capacity. [BBD] -----------------------------A new feedstock pretreatment unit began operating in March at Eni S.p.A.’s second converted oil refinery in Italy, which opened in fall 2019 in Gela, Sicily, where the company can produce 750,000 metric tons of renewable diesel and SAF. The new unit enables use of up to 100 percent of the biomass from UCO and fats from fish and meat processing generated in Sicily for production of hydrotreated biofuel. Castor oil will also be used. Eni plans to expand production at its two renewable diesel and SAF sites in Venice and Gela by 2024 and again by 2050. [BBD] -----------------------------MOL Group in Budapest, Hungary, has begun coprocessing renewable diesel from vegetable oils, animal fats and UCO at its Danube refinery in Százhalombatta, Hungary. MOL Group operates three refineries and two petrochemical plants in Hungary, Slovakia and Croatia. [BBD] -----------------------------Bolivia’s government announced in March construction of a renewable diesel plant in Santa Cruz with an investment of $250

million. The plant will be located at the Guillermo Elder Bell refinery in Santa Cruz and will produce about 138 mgy from 450,000 tons of vegetable oils, animal fats and UCO per year. [BBD] -----------------------------Chemieanlagenbau Chemnitz GmbH, a plant engineering firm headquartered in Germany, has been contracted by the Austrian multinational oil, gas and petrochemical company OMV to construct its renewable diesel coprocessing project southeast of Vienna at OMV’s Schwechat refinery. The oil company plans to coprocess up to 160,000 tons of vegetable oils, including UCO and other “advanced feedstocks,” with petroleum-based product to manufacture coprocessed renewable diesel. OMV is investing roughly 200 million euros at the site. [BBD] -----------------------------Agroforestry firm Investancia signed a 30-year offtake deal with ECB Group for 300,000 metric tons of “reforestation oil” from pongamia oil produced annually by 2030. The pongamia oil will be refined by the ECB Group at its new 800,000-ton Omega Green renewable diesel and SAF complex in Villeta, Paraguay, near Asuncion. ECB Group and Shell Trading (US) Company recently signed a multiyear contract for more than 500 million liters of renewable diesel and SAF per year. The contract is expected to run from 2024-’29, totaling 2.5 billion liters. The ECB Group also announced execution of a contract with BP to sell in excess of 1 billion liters of bio-distillate between 2024-’29. [BBD] -----------------------------In Sweden, following a redevelopment of Preem’s “Green Hydro Treater” plant in Gothenburg, the plant’s production capacity of renewable diesel has increased by 40 percent. And for the first time, the GHT plant is able to produce 100 percent renewable products. It sources sustainable renewable raw materials, including raw tall oil diesel from SunPine, residues from the food industry and recycled frying oil. Preem is Sweden’s largest fuel company with two refineries and 570 fueling stations. [BBD]

ADVANCED BIOFUELS Biodiesel and renewable diesel are the most widely available advanced biofuels. As their use grows, the carbon savings add up.

The benefits don’t stop there. Biodiesel cuts particulate matter emissions, which reduces health care burdens and medical costs.

BetterCleanerNow.org

Biobased DieselTM Summer 2021 [11]

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Biobased DieselTM Summer 2021 [13]

INFORMATION |

U.S. Biobased Diesel Trade in 2020

Renewable Diesel Imports Singapore: 279.64 million gallons

DATA SOURCE: THE U.S. ENERGY INFORMATION ADMINISTRATION

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Biodiesel Exports

Canada: 126.38 million gallons Peru: 5.71 million gallons The Netherlands: 4.16 million gallons China: 3.70 million gallons Norway: 1.05 million gallons Germany: 378,000 gallons South Korea: 294,000 gallons Mexico: 168,000 gallons

Biodiesel Imports

Canada: 115.50 million gallons Germany: 47.29 million gallons South Korea: 25.45 million gallons Spain: 8.36 million gallons Japan: 126,000 gallons

U.S. Biobased Diesel Imports

476.37 million gallons

Renewable Diesel

U.S. Biodiesel Exports

279.64 million gallons

334.53 million gallons

141.84 million gallons

2020 Totals

Net U.S. Biobased Diesel Imports

Biodiesel

196.73 million gallons

Biobased DieselTM Summer 2021 [15]

INFORMATION |

2020 Biodiesel Feedstock Usage Soybean Oil

8.38 billion pounds

Distillers Corn Oil 1.52 billion pounds

Canola Oil

1.25 billion pounds

In total, Yellow Grease

13.63 billion pounds

1.05 billion pounds

of feedstock was consumed in 2020 by

Choice White Grease 612 million pounds

U.S. biodiesel manufacturing.

Tallow

368 million pounds

“Other” Recycled Feedstocks 240 million pounds

Poultry Fat

173 million pounds

“Other” Fats

Poultry “Other” Recycled Fat “Other” 1.3% Fats Feedstocks

37 million pounds

1.8%

0.3%

Tallow 2.7%

Choice White Grease 4.5%

Yellow Grease 7.7%

Canola Oil 9.1%

Feedstock Use for U.S. Biodiesel Production in 2020 by Percentage* * Excludes feedstocks used for U.S. renewable diesel production.

DATA SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION

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Distillers Corn Oil 11.1%

Soybean Oil 61.5%

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Biobased DieselTM Summer 2021 [19]

PERSPECTIVE |

Renewable Diesel Netback:

Where’s the Value?

If companies want to capture value and ultimately profit from the projected growth in renewable diesel, they must understand their netback.

By Steve Roberts and Michael Reecher The demand and price for renewable diesel is on the rise and bringing familiar and new participants to the market.

Domestic production of biomass-based diesel has struggled to keep up with demand, which is primarily focused on the U.S. West Coast. The U.S. domestic refining industry is moving quickly to fill the market need, with planned production capacity forecast to increase four-fold in the next three years. However, if companies want to capture value and ultimately profit, they’ll need to understand their netback for renewable diesel.

Understanding Your Renewable Diesel Netback According to the U.S. Energy Information Administration, net imports of biomass-based diesel rose from 25 percent in 2019 to 50 percent in 2020. Demand will continue to rise into 2021 due to low carbon-based regulations spreading at the state level from Washington and Minnesota to Iowa and New York.

In Canada, British Columbia has led the way, but Canada’s national Clean Fuel Standard is also setting regulations that will increase renewable diesel use.

Calculating the netback, a non-GAAP measure of operating profitability used to measure efficiencies, takes on a slightly different flavor when used to calculate renewable diesel value.

While the basic components are the same for renewable diesel as its fossil fuel counterpart, the varied regulations surrounding renewable fuels, the markets that determine their value, and the new feedstocks for traditional refiners require updates to the netback calculation and overall value capture.

Netback is traditionally calculated by taking the revenue from the sale of product and then subtracting transportation costs, production costs, administrative expenses (including working capital), and revenue (or loss) from trading and hedging activities. For the netback calculation of renewable diesel, there’s an added wrinkle—a tax credit component.

Like any good analysis, a company’s netback should start [20]

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with a clear understanding of what’s being measured and how the result will be used. Ideally, stakeholders from across the value chain are involved in the development and, as the results are analyzed, a balanced view of how to continuously improve can be determined. Leaving out key participants can lead to finger-pointing over results, which negates the goal of adding value to everyone.

Below is a more detailed look at the main components of renewable diesel netback analysis: • Product Sale Revenue

o Most mature organizations will have processes in place to capture the necessary data granularity on sales for a netback analysis but may want to revisit those processes to determine if they have the right customer and sales/marketing channel information for renewable diesel.

• Production Costs

o Determining production costs can be tricky if the facility is used for fossil fuel refining as well as renewable diesel production. Operations and commercial stakeholders will need to align with the methodology for allocating costs.

o One of the biggest drivers of production costs will be the feedstock, which, for many renewable diesel producers, will be a new commodity. Fitting the new commodity into existing processes and systems will require thorough analysis to ensure support for the netback calculation.

• Transportation Costs

o For feedstock in and refined product out, one of the primary transportation mechanisms is railcar. For organizations that already have robust rail capability, these cost calculations will be easier to analyze while a novice group might struggle.

Biodiesel and HVO production overview for key global markets, 2019-2025

Renewable Diesel Netback Calculation

billion L 17.5

Netback = Revenue - Production Costs Transportation - Administrative Expenses +/- Trading Costs + Tax Credits

15 12.5 10 7.5 5 2.5 0

European Union

United States

Indonesia

Brazil

Argentina IEA. All Rights Reserved

• 2019 • 2020 • 2021 • 2022 • 2023-2025 average

• Trading Costs

o New products, markets, feedstocks, and potentially new customers come with new risk exposures.

While the commercial or trading components of the organization will likely have experience with renewable identification numbers (RIN) credits, Low Carbon Fuel Standard credit markets are different and fragmented, but they have the potential to add value to the netback.

o Between RINs and the various carbon credits (both attached and separated from the physical product), organizations will need a methodology that determines how the value associated with credits are allocated to the netback.

o Based on an organization’s risk policy, there will be hedging activity for the product, feedstock and even RINs/carbon credits that must be accounted for and allocated back to the renewable diesel netback.

• Tax Credits

o The biomass-based diesel tax credit adds $1 per gallon to the value of renewable diesel. Accounting for this item alone can swing the profitability of renewable diesel positive—though it’s imperative that an organization’s tax team works to ensure that value is captured.

• Administrative Expenses

o Operational, commercial, logistics, and accounting overhead are just a part of the administrative expenses that need to be considered in the netback. To capture the value of participating in renewable fuel markets, producers must account for the credits and integrate them with various government systems.

o Allocating costs across all areas of an organization requires allocation rules, and to run efficiently, an organization needs a robust mechanism to set up, monitor and update those allocations as business conditions change. Setting up allocations in a spreadsheet or “hard coding” them into reporting might serve needs in the short-term, but rarely is it sustainable or efficient in the long-term.

Many of the components discussed above might sound easy to coordinate and execute on their own, but reporting a

clean netback value requires cross-company coordination and planning. Like any new business endeavor in the 21st century, long-term success in the renewable diesel market hinges on aligning three principal areas: • People—Does everyone involved in the renewable diesel business understand the business goals and intended outcomes, and are they aligned to how those outcomes will be measured?

• Process—Each functional area will need to bring core processes to bear, but companies should consider a cross-functional team to help develop processes and promote the implementation and understanding.

• Technology—Beyond the operational processing technology to produce renewable diesel, core downstream systems will likely require updates or enhancements.

Energy trading and risk management (ETRM) systems and enterprise resource planning (ERP) software will be central to facilitate the processes of capturing and tracking multiple data points, ensuring value will be reported efficiently and transparently.

Renewable diesel is one of the many parts of the energy puzzle that will help move the country—and world—towards a more sustainable future and facilitate the energy transition.

Companies looking to support that future must plan now to ensure that they can capture maximum value from this new revenue stream.

Authors: Steve Roberts Director, Opportune LLP 713-237-4877 sroberts@opportune.com

Michael Reecher Senior Consultant, Opportune LLP 713-237-4906 mreecher@opportune.com

Biobased DieselTM Summer 2021 [21]

PERSPECTIVE |

NEVER

It’s Now or

By Paul Nazzaro

The East Coast must incentivize delivery of biodiesel supply for its zero-carbon liquid heating ambitions to come true.

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We make many decisions every day, but some seem so much harder to make than others. As I watch industry leadership groups, fuel wholesalers, biodiesel producers and systemwide stakeholders toil with how to mainstream much-needed solutions to the ever-growing climate crisis, I grimace at the indecisiveness on strategies needed to achieve significant reductions in carbon emissions.

Legislators are being squeezed from all sides, including by political party leaders and big-ticket donors, to hastily enact measures that they perceive will address climate change and carbon reduction. The path of least resistance for them is electrification, whether for passenger vehicles or home heating, despite the obvious and apparent shortfalls of this approach, which are many.

These legislators look to California as a low-carbon leader for inspiration and see a ban on the sale of internal combustion engines by 2035 as a bellwether of things to come. What they do not—or choose not—to see, however, is that under the state’s Low Carbon Fuel Standard, renewable fuels like sustainable, low-carbon biodiesel make up more than 80 percent of all the credits generated under the program. The takeaway message is that until a vast majority of the power supply is renewable and built out on a much larger scale to accommodate widespread electrification, along with reinforcement and security of the grid, the carbon-reduction value of tomorrow’s electrification promise is no match for the reality of biodiesel’s ability to deliver significant carbon reductions today. But time is of the essence for Northeast heating oil providers to meet the mounting demands being levied upon the fuel supply chain to get in line for execution or rebirth.

Since 2003, the National Biodiesel Board, National Oiheat Research Alliance, Brookhaven National Laboratories, National Renewable Energy Laboratory, and countless industry pioneers have navigated fuel standard developments and technical challenges to be confident that B20—a 20 percent blend of low-carbon, sustainable biodiesel and ultra-low sulfur heating oil—is fit for purpose not tomorrow, but today.

Moving forward, lab and field work already show great promise that blends as high as B50 are performing well in legacy equipment. Thoughtful, deliberate communication planning and marketing pathways have been developed and deployed throughout New England and the Mid-Atlantic to help fuel dealers become more knowledgeable and confident in their new 21st Century offering.

So, all systems go, right? Hardly. It is becoming as clear as the nose on my face that because the heating oil industry has not sent a bankable signal to low-carbon liquid fuel manufacturers, product availability has become strained at best.

I spoke recently with fuel distributors in key markets to learn that biodiesel is being offered anywhere from 10 cents a gallon under NYMEX to 50 cents over—that’s right, 50 cents over. How does this work? Why the volatility? Can we afford to buy and sell a product this far out of the money? At first blush, a gut reaction might be “no.” But after considering the alternative, which would be the final chapter of buying and selling liquid carbon, the correct answer is “yes.”

While we may continue to experience periods of cheap oil and low refinedpetroleum product prices, we must read the writing on the wall and be able to understand what it means. Carbon reduction is not a passing fad that will disappear like legwarmers of the 1980s. The pieces on the policy chessboard have been in play for years, and they are now in place for a checkmate strike on King Carbon. What we don’t want for your home heating oil business is for it to become a pawn of attrition in this battle on climate change in the political arena.

The value of energy sources such as biodiesel and Bioheat® fuel do—and should—come at a premium because, in the simplest of terms, they not only fulfill the job of their carbon-rich counterparts (price X), but they also provide the added service of reducing carbon emissions by up to nearly 90 percent compared to their petroleum-based equivalents (premium C). We could take this exercise further down the same path and say biodiesel also provides valuable lubricity (premium L) to ultra-low sulfur diesel fuels; domestic job creation (premium J); rural economic

revitalization (premium R); cleaner air (premium A); vastly reduced or eliminated equipment-conversion costs compared to electrification (premium E); and so on. Thus, if we were to internalize the cumulative societal benefits of biodiesel and Bioheat® fuels in terms of price and value where fossil heating oil would be price X, then the value of biodiesel would naturally be, at minimum, X+C+L+J+R+A+E. Now, 50 cents over NYMEX seems like a steal.

So, in simple and real terms, how can we mitigate this volatility and ensure the Northeast and Mid-Atlantic regions have access to ratable, high-quality, competitively priced lowcarbon liquid fuels like biodiesel? Let’s start with a reality check.

The biodiesel industry currently has available production capacity near 3 billion gallons per year and adequate markets to offload this production, with California being the most attractive and logical destination for every producer in North America. When I first spoke about biodiesel and Bioheat® fuel to heating oil industry stakeholders in 2003, California wasn’t in play, Minnesota was in its infancy stage to adopt a mandate, and various incentive markets like Illinois and others were developing as well.

People often talk about sticks and carrots in creating demand. The stick would be a state requirement or mandate in which compliance is mandatory and a lack thereof would lead to fines, loss of ability to conduct business, and other punitive measures. The carrot approach, on the other hand, provides financial incentives, such as a price on carbon and value for carbon reduction like in California’s LCFS. With LCFS credit prices hovering around $200 per metric ton of carbon, this equates to a big, juicy carrot of between $1.50 to $2 tacked onto the value of a gallon of biodiesel. Do the math. On top of federal RIN prices and the $1 per gallon federal blenders tax credit, why would a biodiesel producer located anywhere from Boston to Santa Barbara ship their low-carbon fuel anywhere else?

Granted, the prospect that heating oil sectors on the East Coast could become a significant play was met with huge interest by low-carbon liquid fuel producers and marketers. The phased-in goal of the Providence Resolution for heating oil to become net-zero by 2050, and the industry’s commitment to it, is a solid starting point. But fast-track to 2021, the heating oil sector becomes less attractive simply because producers can divert their offtake to incentivized LCFS markets where higher netbacks are available with little heavy lifting.

So, as we continue to debate whether Bioheat® fuel is our future, organize countless meetings to talk through the details, time is ticking away on the industry’s life expectancy. Make no mistake about it: U.S. heating oil businesses are in for the fight of their lives—and for their lives—against anxious legislators wanting to bury us and the low-carbon liquid producers delivering their offtake. We need action and we need it now. Our livelihoods depend on it. If you think this is hyperbole, then wake up and smell the diesel fuel, because that smell won’t be around much longer—it will either be replaced by the sweet scent of French fries from Bioheat® fuel or the foreboding stink of ozone from electrostatic discharge by which you may soon be subjugated.

I​ tabled an important article about fuel quality this month to remind you that we need Bioheat®, and we need it now. The time has come to be bold and act with courage as a united industry.

Half measures will avail us nothing. We need to amplify our voice and press legislators to establish a regional LCFS, or push New York policymakers to vote its LCFS out of committee, where it has been tabled for more than a year. Any LCFS in the Northeast must go beyond transportation fuel and encompass the heating sector. A big state like New York could be the linchpin needed in a regional LCFS approach that entices surrounding states to join. That will be the cornerstone of our communication with production houses: that we mean business, and that we require this low-carbon energy source to build a strong, sustainable future for our companies, neighbors and family.

Step one, developing and committing to the Providence Resolution, has been fulfilled. The goal has been set and the commitments by the associations that represent you have been established.

Step two is underway. This involves creation of the newly formed coalition, Project Carbon Freedom. To complete this phase, join your colleagues in this endeavor by signing up to be a member (www.projectcarbonfreedom.com) so your unique, singular voice can complement thousands of other supplychain stakeholders anxious to secure a place in the new energy frontier. Completing step two, joining Project Carbon Freedom and participating in hassle-free, effective advocacy campaigns the coalition has created, will provide us with the tools needed to get to the third and final step.

Step three is convincing legislators to make a commitment on a policy mechanism—a regional LCFS—that places a price on carbon and establishes a value for carbon reduction, as in California. This will attract low-carbon liquid fuel producers to sell into our market and put product in place so we can provide our customers clean liquid heat.

We have the goal and mission: Net-zero by 2050. We have the marketing arm and advocacy push: Project Carbon Freedom, but it is imperative you join. And we have identified the policy mechanism needed to enact our mission by incentivizing lowcarbon product delivery to New England: A regional LCFS in the Northeast. These three measures are all interconnected and require one another to succeed—much like we in the heating oil business require one another to do the same.

Author: Paul Nazzaro President, Advanced Fuel Solutions 978-258-8360 paulsr@yourfuelsolution.com

Biobased DieselTM Summer 2021 [23]

PERSPECTIVE |

Biodiesel Brings the Benefits A new study shows switching to biodiesel in environmental justice communities has major health benefits and corresponding economic savings.

By Donnell Rehagen Throughout the past couple years, the National Biodiesel benefits by reducing pollution in markets that are hardest to Board has touted that our industry is “Better, Cleaner, Now!” decarbonize: heavy-duty transportation and residential heating.

Based on foundational research, we know that our fuels are a Saving lives by reducing the health impacts of diesel better alternative and cleaner choice with proven performance. pollution should be a higher priority, and biodiesel is widely A new, landmark study contributes to the mounting evidence available today to achieve that goal. These immediate and showing how biodiesel can move the needle on an issue substantial emission reductions and associated health benefits important to all Americans—their health. And the best part: can and should be an important consideration in any local, biodiesel is a drop-in solution available now, not years or state, regional or national climate program as our nation moves decades into the future. toward decarbonization and cleaner air. As the conversation The study, conducted by leading environmental research firm on climate and environmental justice continues to evolve and Trinity Consultants, shows that switching to biodiesel results gain speed, the immediacy of these health benefits, especially in a multitude of health benefits at the neighborhood level, for communities exposed to high levels of pollution, cannot including lowering cancer risk, reducing premature deaths and be understated. It is critical that policymakers and energy decreasing asthma attacks. providers consider the Sponsored by NBB and benefits they can deliver to Saving lives by reducing the health other association memberthese communities today, funders, the research while states pursue deep impacts of diesel pollution should be a utilized well-recognized electrification and other EPA air dispersion tools decarbonization strategies. higher priority, and biodiesel is widely coupled with health-risk This means these assessments to measure communities and other available today to achieve that goal. the public-health benefits disadvantaged areas, and corresponding which continue to be economic savings of converting from petroleum-based diesel disproportionately affected by diesel pollution, don’t need to 100 percent biodiesel, known as B100, in 13 communities to wait five, 10 or in some cases 20 years for an electrified in the U.S., including the Bronx, Denver and San Bernardino, solution to deliver cleaner air. With biodiesel, they can enjoy currently exposed to some of the highest rates of petroleum- cleaner, healthier air today. diesel pollution.

This breakthrough study proves and quantifies the major Researchers found that switching to 100 percent biodiesel benefits that a simple transition to biodiesel can have on in the home heating oil and transportation sectors would communities that adopt it. Our industry has the ability to make provide immediate community health improvements that an immediate and swift impact on public health with B100. We can be measured in reduced medical costs and healthcare continue to make meaningful advancements in this industry, benefits, including approximately 46,000 fewer sick days and and for years to come, we will share that biodiesel is better, 340 avoided premature deaths each year. cleaner and ready now to make real change.

In the transportation sector, benefits included a potential 45 percent reduction in cancer risk when heavy-duty trucks such as semis use B100 and 203,000 fewer or lessened asthma attacks each year. When biodiesel is used for home heating oil, the study found an 86 percent reduced cancer risk and 17,000 fewer lung problems each year. Cumulatively, these benefits Author: amount to $2 billion in avoided health costs each year. And Donnell Rehagen these benefits were quantified for just the 13 sites evaluated; CEO, National Biodiesel Board clearly, the widespread use of biodiesel across the country 573-635-3893 drehagen@biodiesel.org would yield substantially greater health benefits.

Outside of the headline numbers, one aspect that makes this study so meaningful is that it shows B100 can achieve these [24]

www.biobased-diesel.com

BREATHE Nearly one in six Americans live in an area where there are too many days with unhealthful levels of particle pollution.

According to a new study, biodiesel reduces particulate matter emission by 72%, which can reduce cancer and premature mortality rates. It can also reduce asthma incidents, activity restrictions and lost workdays.

The substitution of clean-burning biodiesel for petroleum diesel has reduced greenhouse gas emissions by more than 140 million metric tons over the last three decades — that’s the equivalent of removing over 30 million vehicles from American roads.

This should make us all breathe a little easier.

BetterCleanerNow.org Biobased DieselTM Summer 2021 [25]

The future of biodiesel is HERE.

REVOLUTIONARY

Plasma Blue is a revolutionary new technology that creates biodiesel at a dramatically lower production cost while integrating easily into existing or new biodiesel plants.

COMPETITIVE

Producing fuel is a game of pennies and the producers with the lowest cost of production will always win. Plasma technology allows your business, new or existing, to remain competitive in a growing and changing market.

ECONOMICAL

Plasma Blue technology has a very small physical footprint and modular design.

This allows existing plants to increase plant production without expensive shut down times or expansions of plant footprints.

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To learn more, visit plasma-blue.com or contact Plasma Blue CEO Tom Slunecka at tslunecka@plasma-blue.com or 507-720-4052.

www.biobased-diesel.com

Biobased DieselTM Summer 2021 [27]

FEATURE |

BAGRAM BIODIESEL Now that U.S. troop withdrawal from Afghanistan is all but certain, is it time to say goodbye to Bagram Airfield’s successful biodiesel program?

By Ron Kotrba

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In early April, just days before President Joe Biden officially announced the U.S. would pull all its troops from Afghanistan by Sept. 11, 2021, Chris Waechter with Fluor Corp. already knew his time in-country was limited. Waechter is a country environmental manager with Fluor Mission Solutions in Bagram, Afghanistan, part of the Logistics Civil Augmentation Program (LOGCAP), a government contractor providing support to the U.S. Army. He has 30 years of environmental and hazardous waste management experience working alongside government and has been part of LOGCAP since 2005. In Afghanistan, Waechter manages all kinds of waste, including hazardous, medical, solid and water, in addition to pest management. Fluor is on the seventh extension of option year five, Waechter says, meaning the contractor has been in Afghanistan for 12 years now.

Twelve years is a long time, but it’s still eight years shy of how long the U.S. has been in Afghanistan waging its generation-long fight against terrorism following the 9/11 attacks on American soil. In early April, before the official withdrawal announcement but after rumors had circulated, Waechter told Biobased DieselTM, “We’re still here, [but I am] still not sure if the U.S. is going to zero troops. We are transitioning to the new contractor (KBR) regardless—maybe two to three months left for Fluor.”

Although the fate of Afghanistan-U.S. relations is uncertain, what is clear is that the biodiesel program Waechter helped establish at Bagram Airfield is a model to follow for every U.S. military installation, foreign and domestic.

The Bagram biodiesel program began in 2015. It started when the previous method of disposing of 6,500 gallons per month of used cooking oil (UCO) collected from Joint Operations Area and Forward Operating Bases in north Afghanistan became unavailable. Another contractor was being paid to haul UCO off-site for disposal at a wastewater treatment plant.

“In 2015, the local Afghan mayor said he didn’t want to see more trucks delivering waste to the treatment plant off-base, as the local contractors were not managing waste correctly,” Waechter says. “So, in 2015, we lost all means to dispose of the UCO, but wastewater treatment is not a good means for UCO disposal anyway. We needed another approach.”

In March 2015, a novel idea was proposed to the Army and LOGCAP offices. “We suggested we institute a biodiesel conversion program in Bagram to manage the

UCO,” Waechter says, adding that the idea was offered as a cost-savings since fuel prices in-theater are exorbitantly high—often north of $10 a gallon. “We turned to Springboard Biodiesel, as we were looking for a turnkey system for the local nationals to operate. Their labor costs less, and it would give them something to learn. That was the goal— easy, simple, quick, and train the locals.”

The concept was approved in a week.

The biodiesel processing system ordered and installed included a BioPro™ 380EX main processing unit and SpringPro™ T76 dry-wash columns from Springboard

after this, the local Afghans running the biodiesel system were no longer allowed on base, and the biodiesel operations were taken over by staff.

UCO collection eventually expanded to include the entire country of Afghanistan, jumping from 6,500 to 10,000 gallons a month, which led to a 400-drum backlog.

In Spring 2020, Waechter ordered a second BioPro™ 380EX. Once the new unit arrived, both old and new units were run together to double production and drive down the UCO stocks.

“Every military base out there could do this,” says Matt Roberts, president of

With Springboard Biodiesel equipment, Bagram Airfield in Afghanistan can process the 10,000 gallons of UCO it collects per month into fuel to power incinerators on base. PHOTO: CHRIS WAECHTER, FLUOR CORP.

Biodiesel, which gave the base the ability to process 275 gallons a day. “I looked at and evaluated a few different systems,” Waechter says, “but the reviews and presentations on Springboard’s website, and the simplicity of use, made it a winner for what I was looking for.”

The system cost $35,000 and the return on investment was less than a month. “It was pretty much a nobrainer,” Waechter says, adding that Bagram churned out its first batch of UCO biodiesel in early May 2015. Since then, through 2020, Bagram Airfield has manufactured about 500,000 gallons of biodiesel at a cost-savings to the military of well over $4 million.

On Nov. 12, 2016, a tragic event occurred at Bagram Airfield. A suicide bomber penetrated security and detonated his vest-bomb, killing two U.S. soldiers and two U.S. contractors—a fifth dying weeks later from injuries. Many more were wounded. Waechter says

Springboard Biodiesel. “They’re feeding service men and women, and they could easily convert that UCO from the mess hall. Our system enables groups to make biodiesel for about $1 to $1.05 a gallon.”

Springboard Biodiesel is a leader in the small-scale biodiesel processing world. “It’s not a giant pond, but we’re definitely leading the way,” Roberts says.

“In 13 years, we have sold more than 1,200 units and our systems now operate in 37 countries and all 50 states.”

Ninety-nine universities have purchased a Springboard Biodiesel BioProTM system. Before the pandemic struck, Springboard was working with a university in Botswana looking at converting tallow and plant oils from indigenous crops.

“Conservatively, when we do the math, people are making about 9 million gallons a year collectively on our units,” Roberts says. “The cost-savings are high, but it’s not just about saving money. The

combined amount of CO2 and particulate matter kept out of the atmosphere from these multiple, small-scale producers is definitely impressive.”

UCO biodiesel is one of the lowest carbon-intensity diesel fuels on the planet, with carbon emissions reductions approaching 90 percent compared to petroleum diesel. Roberts estimates the biodiesel produced with Springboard units and consumed around the world has reduced annual carbon emissions by nearly 90,000 tons.

“A lot of people think biodiesel production is about giant plants converting millions of gallons a year with huge overhead costs, often times relying on government subsidies to stay open,” Roberts says. “But what we enable is for more people to get involved in this. We shrank the plant down to the size of an appliance, automated the process and made it easy for people to make biodiesel as inexpensively as possible.”

In Bagram, Waechter says the UCO biodiesel produced on-site is blended with JP8 jet fuel—the primary petroleum diesel fuel procured and used at the airbase— in 20 and 30 percent blends, and the blended fuel powers two of the four incinerators for trash and medical-waste disposal. The glycerin obtained from the biodiesel process also finds use on base.

It is mixed in with other usable, recovered wastes to create an augmented fuel also powering the incinerators.

Fluor’s time in Afghanistan has run its course, and the U.S. military’s presence in-country is expected to be nonexistent come this fall, so what will become of the Bagram biodiesel units is still unknown.

“I do believe that the new contractor will continue processing biodiesel,” Waechter says—at least as long as the base is operating.

As for Waechter, his future is less than certain as well. “I’m not sure where I’ll go,” he tells Biobased DieselTM. “We do still have AFRICOM, I may head down there after a few months break.”

Author: Ron Kotrba Editor, Biobased DieselTM 218-745-8347 editor@biobased-diesel.com Biobased DieselTM Summer 2021 [29]

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Biobased DieselTM Summer 2021 [31]

FEATURE |

A Frenetic Feedstock Market

By Pete Moss

Are we headed for a repeat in the soybean oil market?

In 2006, soybean oil averaged 31 cents per pound (c/lb.) in Decatur (Figure 1). In 2007-’08, it averaged 52 c/lb. Fast forward to 2018-’19 and soybean oil averaged 28 c/lb. By March 2021, the Chicago Board of Trade price was 54 c/lb. and cash prices are even higher (Figure 2).

Figure 1 CHART BY FBA USING USDA DATA

Soybean ending stocks had tumbled from 574 million bushels in 2006 to 138 million bushels in 2008, leading to sharp price increases in soybeans and soybean oil. In 2008, American farmers planted 75.7 million acres of soybeans, up 11 million acres from the year before. In 2021, more than 90 million acres of soybeans are expected to be planted, up 7 million acres from 2020. Note how each time soybean oil prices have risen significantly, this was followed by a precipitous drop, although never back down to the previous lows. These dramatic price changes indicate a paradigm shift in price has occurred—and will likely occur again.

Figure 2 CHART BY FBA USING JACOBSEN DATA

High feedstock prices, dwindling stocks, and growing demand from an emerging renewable diesel industry make for interesting—if not challenging— markets ahead.

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In 1989, when I started my soybean-processing career, farmers craved for soybean prices of $7 a bushel, and soybean oil languished in the 20 c/lb. range for more than a decade.

Then came the biodiesel industry in the early 2000s followed by the Renewable Fuel Standard, pulling fats and oils to new levels.

It took more than a decade to reach 1 billion gallons (Figure 3).

In 2009, with biodiesel production around 500 million gallons, Frazier, Barnes & Associates projected U.S. biodiesel production would be between 1.4 billion and 1.9 billion gallons by 2019.

Figure 3 CHART BY FBA USING EIA DATA

According to the Energy Information Administration, the U.S. made 1.725 billion gallons that year.

Thankfully, a new feedstock called distillers corn oil (DCO) came along in 2009 as ethanol plants began extracting oil out of thin stillage.

Nearly all the ethanol plants installed equipment to extract DCO, and roughly 2 billion pounds a year currently is used to make biodiesel and renewable diesel.

During the same decade, U.S. soybean oil production increased from nearly 20 billion pounds a year to 25 billion pounds. So DCO and soybean oil helped keep feedstock prices in check.

Then came renewable diesel and the California Low Carbon Fuel Standard.

It may have taken biodiesel more than a decade to reach the billiongallon milestone, but renewable diesel developers are on a fast track. In the next three years, the U.S. could reach 4.1 billion gallons of just renewable diesel— up from 350 million gallons today.

Following are just a few of the publicly disclosed renewable diesel facilities: • CVR Energy Wynnewood (Oklahoma): 100 million gallons a year (mgy) by 2021 (conversion) • Diamond Green Diesel (Louisiana): 675 mgy by 2021 (expansion) • Diamond Green Diesel (Texas): 470 mgy by 2023 (new build) • HollyFrontier Cheyenne (Wyoming): 90 mgy by 2022 (conversion) • HollyFrontier Artesia (New Mexico): 125 mgy by 2022 (conversion) • Global Clean Energy Holdings (California): 230 mgy by 2022 (conversion) • Marathon Dickinson (North Dakota): 184 mgy in 2021 (conversion)

• Marathon Martinez (California): 730 mgy by 2023 (conversion) • Phillips 66 Rodeo (California): 800 mgy by 2024 (conversion) • REG Geismar (Louisiana): 340 mgy by 2023 (expansion) • World Energy Paramount (California): 360 mgy by 2022 (expansion) In addition, there are other renewable diesel projects announced or not that could significantly increase capacity even further. So, back to the opening question—are we headed for a repeat of 2008? Obviously, numerous factors influence the market and feedstock pricing, but ending stocks are certainly a critical factor to watch.

“Ending stocks” for commodities are the difference between beginning stocks plus what was produced, minus the amount used or exported. No matter the commodity, the projected ending-stock numbers can significantly influence price. Only three times since the year 2000 have soybean oil ending stocks been lower than 2021 projections, and current demand is much higher. Ending stocks for soybean

oil are projected at 1.515 billion pounds and DCO less than 75 million pounds. Combined, the carryover for both is roughly 200 million gallons going into 2022.

The price of RINs is encouraging more biobased diesel production. D4 RINs are at record highs as producers scramble to meet the post-coronavirus recovery bounce. 2021 RINs are currently trading at around $1.41 per RIN, or $2.12 per gallon for biodiesel ($2.40 per gallon for renewable diesel). On a historical basis, RINs are approaching their highest level in a decade, as shown on the monthly average chart (Figure 4).

What does the future hold for biodiesel and renewable diesel?

Essentially, this is the elephant in the room. According to Merriam-Webster, the definition of elephant in the room is “an obvious, major problem or issue that people avoid discussing or acknowledging.” With just a fraction of the new renewable diesel capacity online, all feedstock is both scarce and expensive. Could it get worse?

We need several years of unbelievable crops and increased extraction capacity, in addition to new feedstocks being approved by EPA, in order to meet the upcoming demand. In the absence of an outstanding crop with excellent yields, you may want to buckle up and get ready for quite a ride.

Author: Pete Moss President, Frazier, Barnes & Associates 901-725-7258 fbapete@frazierbarnes.com

Figure 4 FBA

Biobased DieselTM Summer 2021 [33]

LEADING THE INDUSTRY FOR OVER 20 YEARS Soybean Processing & Renewable Fuel Consulting

Experts in Feedstock, Market and Strategic Consulting. Contact FBA today for a free consultation.

[34]

www.biobased-diesel.com

(901) 725-7258 www.frazierbarnes.com

Biobased DieselTM Summer 2021 [35]

FEATURE |

THE REPCAT PROCESS:

From the Worst Feedstock to the Best Biodiesel

PHOTO: CARGILL INC.

Avoid limitations of more conventional biodiesel technologies when processing low-quality materials with RepCat from BDI, which can lower operating costs, increase yield, produce high-purity, salt-free glycerin and open up a world of feedstock possibilities.

By Manfred Baumgartner

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www.biobased-diesel.com

As this article is being printed, the largest BDI RepCat biodiesel plant in the United States so far is undergoing commissioning and will start production within the second quarter of 2021. This plant is an important milestone for BDIBioEnergy International and also for BDI’s customer, Crimson Renewable Energy in Bakersfield, California, as it is processing waste oils of the lowest quality. This facility, however, is not the only RepCat plant being being built by BDI. Two more biodiesel refineries with this technology are in the construction phase in Europe for Cargill and Envien.

The reason for the success of the RepCat technology is its flexibility regarding feedstock and robustness of the process.

Waste oils and fats become more and more important as feedstock for biodiesel production, but using waste oils and fats also results in challenges to the biodiesel manufacturing process. In addition, the quality of some of this waste feedstock has gotten even worse over the past several years. Therefore, a reliably robust process is required to handle them.

The Process BDI’s patented RepCat process was developed with the goal to avoid the disadvantages of sodium or potassium catalyst-based biodiesel technologies. Their main restriction lies in the limitation of FFA content in feedstock and the resulting salt content in the produced glycerin phase, requiring costly byproduct treatment as well as high costs for catalyst and chemicals.

A schematic of BDI’s RepCat process IMAGE: BDI-BIOENERGY INTERNATIONAL

A conventional biodiesel process has its limitations when using waste feedstock. Most of these challenges could be overcome in a conventional process design, but it eventually may result in capacity reduction, yield losses or in higher operating costs. The RepCat process is a smart way to completely avoid these limitations.

The RepCat process can handle a broad range of feedstock, such as used cooking oil (UCO), tallow, trap grease or even the worst of the worst, like fatbergs from sewer systems. In addition, waste oils from vegetable oil production, including split fatty acids from soapstock splitting or palm oil mill effluent (POME) can be used as well. High levels of free fatty acids (FFA) and surface-active impurities—leading to bad settling behavior in conventional biodiesel processes—are no challenges for the RepCat process.

The European Food Safety Authority just published its report in April that the RepCat process is safe to process high-risk animal fats (Category 1 material, according to the European Hygiene Regulation 1069/2009).

At the core of BDI’s RepCat process is a continuous one- or two-stage reactor system, operated at a pressure above 50 bar (725 psi) and a temperature above 200 degrees Celsius (392 degrees Fahrenheit). In these reactors, esterification and transesterification with methanol take place simultaneously.

Key to making the reaction as efficient as possible is the use of a heterogeneous catalyst—a special metal oxide.

The catalyst is synthesized on-site and is reused within the process. The reuse of the catalyst is one of the main characteristics of the BDI RepCat process and therefore reflected in the process name: Repeatable Catalyst system.

In addition, this special catalyst is not sensitive to feedstock impurities, which can cause poisoning or fouling in other heterogeneous catalysts.

Based on the above-described conditions, a stable and robust process is given to handle fluctuating feedstock quality even without time-consuming settling processes, water washing, or expensive disc centrifuges. The number of stages is defined by the FFA content in the feedstock, with a limit of 15 percent for a single-stage system and up to 100 percent for two stages.

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BDI’s high-end distillation system PHOTO: BDI-BIOENERGY INTERNATIONAL

After flashing off methanol and water, the methyl esters and glycerin are distilled simultaneously in the BDI high-end distillation system, followed by a phase separation. In the highend distillation, the dried flow is distilled over top in a multistage rectification column. Gentle distillation at low pressure avoids product degeneration and unwanted back reactions. The bottom product is transferred into a short-path evaporator in order to “squeeze out” methyl esters and maximize the product yield. Low surface loads, fine vacuum conditions and special column internals secure the lowest possible entrainment and highest biodiesel quality, surpassing ASTM D6751 or EN14214 requirements. Monoglycerides far below 0.1 percent and sulfur reduction by more than 90 percent are typical achievements.

Since there are no salts generated in the whole RepCat process and glycerin is distilled over the top, the glycerin quality achieved is salt-free with a concentration of more than 95 percent. Consequently, the byproduct treatment is reduced to a simple methanol-recycling column.

The sump product from the distillation can be used directly on site as a process-heat fuel, or it can be sold as fuel for other applications.

Industrial Application The innovative RepCat process secures higher profitability in the production of biodiesel from the worst waste-fat materials.

This is achieved by a 90 percent reduction in costs for catalyst, acids and lye, up to 70 percent or more in income for higherquality glycerin, and additional savings in staff costs due to the easy operation of the fully continuous process.

The RepCat success story started with a plant in southern Austria. Biodiesel Kärnten GmbH was looking for an additional process line to double its biodiesel-manufacturing capacity. As the company already specialized in using waste oils and fats, the goal for the new line was to process feedstock with varying compositions. This was the reason why Biodiesel Kärnten decided to give BDI’s RepCat technology a try.

“Varying feedstock qualities are our daily business,” says Werner Stulier, the Biodiesel Kärnten plant manager. “With BDI’s RepCat process, we achieve the best results due to its simple and stable operation on the one hand and highest product quality on the other.”

The latest BDI RepCat project for Cargill in Belgium will have an annual capacity of 35 million gallons per year (mgy) of distilled biodiesel produced from waste oils and fats.

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An alternative application of the RepCat reactor system is using it as a pre-esterification unit. BDI’s high-FFA esterification takes advantage of the special process conditions and reduces FFA levels up to 90 percent per stage. Due to the easy integration upstream of an existing process, it is a perfect fit when higher FFA flexibility is necessary, such as when trap grease or fatty acid distillates are being used. Numerous applications of this technology, in sizes from 1.5 mgy to 22.5 mgy have been built

by BDI worldwide, with the latest one for Argent Energy in its new facility in Elsmere, U.K. Avoiding costs for catalysts, acids or enzymes in combination with the insensitivity regarding varying feedstock qualities are the big advantages.

No matter the feedstock or FFA content, RepCat technology converts FFA and glycerides into methyl esters in the same reactor. Extremely polar feedstock such as brown grease or POME, which normally provide serious settling problems, can be easily handled. In absence of critical settling steps like biodiesel washing and of an extensive byproduct line for glycerin treatment, the fully continuous RepCat process is simple to operate and leaves the operator time to focus on the main process. And most importantly, the quality of the biodiesel and glycerin is superb.

The BDI Advantage BDI not only develops technologies and builds plants, it supports the customer through all project development phases.

This starts with questions such as, which feedstocks are available, what are the optimum pretreatment and processing technologies, and how is the quality of the resulting biodiesel? BDI has gained extensive experience since the 1990s in handling waste oils and fats. The company supports customers from the first laboratory feedstock analysis to pilot-scale tests in its technical center, to the construction of a turnkey plant. With an in-house technical center, BDI is able to simulate the complete RepCat process in pilot scale with all possible feedstock and evaluate whether the intended feedstock will result in on-spec biodiesel according to ASTM D6751 or EN 14214 quality standards.

To recap, the BDI RepCat process is a fully continuous biodiesel production process dedicated to using the lowestquality waste oils and fats as feedstock, even those with FFA content up to 100 percent. With its stable and robust process, a broad range of feedstock like trap grease, UCO, animal fat, palm sludge oil and more can be processed into high-quality biodiesel that meets the toughest specifications. In addition, the RepCat process produces salt-free glycerin with a purity of greater than 95 percent. With its Repeatable Catalyst system, the demand for acids and catalyst can be reduced significantly compared to conventional biodiesel processes. Altogether, these advantages make RepCat a superior process when it comes to biodiesel production from waste feedstock, and it combines all economic and environmental advantages for the production of biofuels from waste materials.

Author: Manfred Baumgartner Director of Technology Biofuels, BDI-BioEnergy International manfred.baumgartner@bdi-bioenergy.com

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25 years focused on Multi-Feedstock BioDiesel technology Optimization and modernization of existing plants Creation of added value from waste oils, fats and greases BioDiesel RepCAT process for ultimate feedstock flexibility

RetroFit Tailor made solutions for your individual needs

PreTreatment Know-how in all types of feedstock for the Renewable Diesel industry

bioCRACK Advanced biofuels from lignocellulosic biomass

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