Renewable diesel capacity in

IN BRIEF

IRELAND: Finnish renewable fuels producer Neste announced on 26 July that it would acquire Irish animal fats and by-products trader Walco Foods to strengthen its raw material sourcing.

The investment follows earlier acquisitions including animal fats and proteins trader IH Demeter, Bunge Loders Croklaan’s refinery in Rotterdam and Count Terminal in the Netherlands, US used cooking oil collector Mahoney Environmental, and US renewable waste and residue fat and oil trader Agri Trading.

INDONESIA: The government has launched road tests for two types of palm oil-based B40 biodiesel blends to assess by the end of the year if they are viable for public use, Reuters reported on 28 July.

The fuels to be tested are diesel mixed with 40% fatty acid methyl esters (FAME), and B30D10 – diesel with 30% FAME mixed with 10% green diesel made of refined, bleached and deodorised (RBD) palm oil.

Indonesia currently had the highest mandated biodiesel blend in the world at B30, Reuters said. Its biodiesel consumption is forecast to be at least 10.15bn litres this year.

Renewable diesel capacity in USA rises significantly

Renewable diesel production in the USA more than doubled between 2021 and 2022 while biodiesel capacity dropped, Biodiesel magazine reported from US Energy Information Agency (EIA) data.

As of 1 January 2022, a total of 11 biorefineries in the USA were producing renewable diesel and associated biofuels – including renewable heating oil, renewable jet fuel, renewable naphtha and renewable gasoline – according to the 25 August report. The facilities had a total capacity of 6.6bn litres/year, the report said, which represented a significant increase on the previous year’s figure.

In contrast, biodiesel capacity dropped by 582M litres/year in the same period compared to the previous year, according to the EIA data published on 8 August, with 72 plants producing a combined capacity of 8.5bn litres/year as of 1 January.

Most renewable diesel was produced in the Petroleum Administration for Defense District (PADD) 3, a region located along the Gulf Coast, the report said. At the start of the year, there were two facilities located in PADD 3 with a combined capacity of 4bn litres/year.

Meanwhile, the bulk of US biodiesel capacity was located in PADD 2, where 37 biodiesel plants produced a combined volume of 5.4bn litres/year.

SOUTH KOREA: Petroleum refiner Hyundai Oilbank and Lotte Confectionery have signed a deal to produce biodiesel from used cooking oil (UCO), the JoonAng Daily reported on 1 August.

Lotte Confectionery would supply by-products from its food manufacturing process – mostly UCO – to Hyundai Oilbank to be used as a biodiesel feedstock.

A new 130,000 tonnes/ year biodiesel production facility was also being built by Hyundai at its Daesan plant in Seosan, South Chungcheong.

Fuel retailers fear impact of SAF tax credit

US fuel retailers fear that a new tax credit for sustainable aviation fuel (SAF) in the landmark US Inflation Reduction Act will shift vegetable oil and other renewable diesel feedstocks to aviation, leaving less for renewable diesel producers, Reuters reported on 8 August.

The act was passed by the US Senate and House of Representatives in August and includes a SAF tax credit of US$1.25/gallon, which could rise to US$1.75/gallon depending on the fuel’s greenhouse gas reduction level. It would remain in place until 2024 and transition to a Clean Fuel Production Credit from 2025-2027.

The act would prohibit the use of palm oil derivatives but first-generation feedstocks such as corn-based ethanol, corn oil and soyabean oil would be eligible for use in SAF production – unlike in Europe, an AgriCensus report said.

The National Association of Truckstop Operators (NATSO) and fuel marketers’ association SIGMA had called for tax equality between the biodiesel tax credit and the SAF tax credit.

Airlines sign new SAF supply agreements

Global oil giant Shell International Petroleum has signed a supply agreement in which it will supply German airline Deutsche Lufthansa with sustainable aviation fuel (SAF) at airports worldwide starting in 2024 for seven years.

The supply could total up to 1.8M tonnes over seven years and would be produced by up to four different approved technology pathways using a range of sustainable feedstocks, Shell said on 1 August.

In other news, leading US airline American Airlines said on 22 July that it had finalised a five-year agreement with renewable chemicals and advanced biofuels company Gevo for the supply of 500M gallons (1.9M litres) of SAF with first deliveries expected in 2026.

In Brazil, aerospace manufacturer Embraer has also signed a deal for Brazilian energy firm Raízen to supply it with SAF, the company said on 17 July.

A joint venture between Royal Dutch Shell and Brazilian conglomerate Cosan, Raízen produces biofuels and bioelectricity from sugarcane.

Also in Brazil, state-run oil company Petrobras announced on 2 August that it had signed a deal for global agribusiness giant Bunge to supply it with refined soyabean oil for it to produce R5 diesel at its Getúlio Vargas Refinery in Paraná state. Diesel R5 is a blend of 95% mineral diesel and 5% renewable diesel.

Petrobras said it planned to expand its renewable diesel production to two more refineries and to have a dedicated unit to process renewable raw materials in the future.