By Roman Wolff
Biodiesel is environmentally friendly, reduces overall emissions compared to diesel, is compatible with existing diesel engines without modifications, and is significantly in demand. But if biodiesel is the best renewable fuel available, why aren’t we all using it?
The answer is technology. Most biodiesel plants operate using conventional caustic-based conversion technology, meaning acid esterification (if necessary) followed by base transesterification. Many plants were designed to process refined vegetable oils, and the price of these oils has remained high, in part as a result of demand from India and China. The glycerin produced by caustic transesterification is contaminated with catalyst and sells at the crude glycerin discount price. The combination of expensive feedstock and low-value coproduct has challenged the profitability of many biodiesel plants.
Why upgrade to next generation noncaustic biodiesel technology? To process higher free fatty acid (FFA) feedstocks, which are 30 percent cheaper than refined vegetable oil; and to produce refined glycerin that sells for 40 cents a pound compared to crude glycerin at 3 cents a pound; and to lower other operating costs. To become more profitable, producers should consider upgrades.
Who should look at upgrading to next generation technology? Biodiesel producers with conventional technology, petroleum refiners, edible oil and palm oil refiners, ethanol producers and pulp and paper companies, all of which are looking to convert their low-value byproducts into biodiesel and higher value coproducts. Below are things to consider when looking at technology upgrades.
Feedstock flexibility The new technology must be robust enough to efficiently and consistently process feedstocks that have between zero and 100 percent FFA, moisture and impurities (e.g., salts of sodium, potassium, calcium). This will allow the producer to choose from a wide universe of raw material based on need, availability and cost. Normally, feedstocks with high FFA, moisture and impurities are sold at discounts of 30 percent or more to their refined counterparts.
Of particular interest today, the palm oil industry produces palm fatty acid distillate with 85 percent FFA at a steep discount to refined palm oil. The pulp and paper industry produces byproducts such as tall oil fatty acids with 100 percent FFA, which may have a home in biodiesel, and crude tall oil, which can be upgraded to biofuel. Animal fat, with up to 20 percent FFA, is available worldwide at a discount to vegetable oil.
As we look into the not-so-distant future to next generation feedstocks such as jatropha and algae oil, we see that these feedstocks can also have high FFA content (up to 20 percent). A next-generation technology must have the ability to deal effectively with wide ranges of FFA, moisture, and impurities.
Low capital costs An upgrade should leverage existing infrastructure so that implementation costs are manageable. Plants with capacity of at least 10 MMgy with ample storage, good logistics, utilities and methanol recovery are ideal upgrade candidates. Some plants can be upgraded at a fraction of the cost and in less that half of the time that it would take to build a new plant. A feasibility analysis is required to determine the cost of upgrade.
When considering feed pretreatment, a producer should target a robust technology with upgradeability to a complete train-integrated solution because of the economic advantages afforded by the complete solution.
Low operating costs Look for an upgrade technology that minimizes consumables. Analyze the hidden costs of consumables: resin, cosolvent and dry-wash, which incur more than just the cost of the chemical, adding to labor, downtime for change-outs, maintenance, disposal costs and operational complexity. Other consumables, such as methoxide, also represent ongoing costs.
High yields Upon upgrade, seek conversion yields of nearly 100 percent. For example, hydrogenation processes (renewable diesel) experience a yield loss of 15 percent, which represents a direct revenue loss of 15 percent. At a biodiesel price of $3.50 a gallon, hydrogenation (renewable diesel) has a yield loss penalty of 50 cents a gallon.
High-value coproduct An upgrade must produce refined glycerin. While crude glycerin generated by conventional caustic-based technology sells for 3 cents a pound, refined glycerin, currently at the bottom of the market, commands 40 cents. Refined glycerin could also be used as a biofuel for energy generation/cogeneration and could potentially qualify for tax credits.
Low water usage and disposal An upgrade with next generation technology should not require a water wash or dry wash. Water wash incurs the cost of water and disposal, and the risk of future changes in environmental law. Dry wash incurs chemical and disposal costs.
As with many other emerging industries, innovation, resilience and persistence will help the biodiesel industry overcome the current challenges and growing pains. The confluence of new technologies, unconventional and next-generation feedstocks, and additional revenue streams from higher value coproducts will springboard the biodiesel industry toward growth. Non-caustic conversion technology is available, proven, and ready for commercialization today. As always, due diligence is required to determine the viability of any upgrade.
Roman Wolff is CEO of Enhanced Biofuels LLC. Reach him at (713) 301-8660 or rwolff@enhancedbiofuels.com.