Biodiesel Needs/Deserves Support
Renewable Energy Group (REG) has seen huge growth in the biodiesel capacity, especially at its Danville, Ill., plant that can handle multiple feedstocks. Biodiesel has had a couple of tough years. Production capacity stands at more than three billion gallons, while actual production stands at less than 1.1 billion gallons in 2012.
"We saw a huge growth in capacity in the industry in 2006, 2007 and 2008, supported by the introduction of a blenders tax credit for biodiesel as well as a brisk export market opportunity," said Gary Haer, vice president, sales and marketing, Renewable Energy Group (REG), one of the country's largest producers of biodiesel.
Gary Haer Actual production also grew quickly in the past 10 years from 500,000 gallons to a federally mandated 1.28 billion gallons projected for 2013. The export market went away, and the rapid growth may have contributed to user problems with the fuel. Quality control was blamed, and many users were turned off. Critics, such as the petroleum industry, had a field day. The biofuels industry response was significant; however, repairing the damaged reputation continues to be a challenge. Supporters insist those problems have been solved, thanks to efforts such as adopting BQ9000 quality standards, and a strong future lies ahead.
"The improvement in quality control and quality assurance is a real compliment to the National Biodiesel Board," said Jeffrey Stroburg, CEO, West Central Cooperative, and board chair, REG. "They've done a good job making sure testing procedures are followed. Plants that weren't capable of making quality biodiesel were either upgraded or are no longer making biodiesel."
Jeff Stroburg Others suggest more remains to be done. While CASE IH and New Holland endorse blends up to and including B100 (100 percent biodiesel and no petro diesel), AGCO and John Deere are more conservative.
"Biodiesel has not developed at the same speed that emission legislation has required of engines," said Antti Marttinen, manager, product management - global engine installations, AGCO Corp. "The quality of first generation biodiesel is behind the level where it needs to be, and it's also sensitive to storage time and conditions. Biodiesel ages much faster than normal diesel fuel, and this needs to be considered. Second generation biodiesel, paraffinic diesel BTL/HVO (renewable diesel), is more comparable with low sulfur diesel fuel and can be used up to 100 percent bio content (B100) in engines utilizing SCR systems."
Although he supports the commitment to quality the industry has made, Marttinen remains concerned that low quality biodiesel could have a negative impact on clean diesel technologies such as his company has developed. "Modern electronic controls are sufficient to correct the behavior of the engine in regards to the fuel, but mechanical parts of fuel injection and catalysts are not able to handle low quality bio blends," he said. "With first generation biodiesel, we do not recommend blends over 5 percent and then only from a list of biodiesel suppliers committed to BQ9000."
John Deere started using biodiesel at the B2 biodiesel blend in factory fills about eight years ago before transitioning to B5. "If you put good, high quality biodiesel in the tractor, we don't worry about the blend; however, if it is above B5, we recommend additives be used," said Don Borgman, director, industry relations, John Deere. "Biodiesel does have different characteristics from diesel fuel, and if water gets in the storage tank, you get opportunity for corrosion and bacterial growth. You need to treat it so you don't get microbial deposits."
Borgman also congratulated the National Biodiesel Board and its efforts and success in enhancing quality control. "They had some immature plants without the quality control needed, and they went to work on that," he said. "We don't see one iota more quality issues with biodiesel today than we do with regular diesel."
ADDRESSING THE CHALLENGES
Kevin Lockart, energy consultant, Ag-Land FS, is an enthusiastic, indeed, evangelical supporter of biodiesel. As a distributor and user of biodiesel, Ag-Land FS has embraced the fuel and addressed concerns in an aggressive manner. The company purchases all of its biodiesel from REG, a BQ9000 supplier. However, Lockart argued a quality supply is not enough, due in part to those differences to which Marttinen referred. In particular, the affinity of biofuel for water, a quality shared ironically, by Ultra Low Sulfur Diesel (ULSD) creates problems in extended storage.
"We address the water problem through additives, but another problem is clean tanks," said Lockart. "If you are considering going to biodiesel, tank cleaning is step number one. You can't put biodiesel in a dirty tank and then blame your problems on the fuel. We recommend it for ULSD as well."
Ag-Land FS takes this concern seriously enough that they won't sell biodiesel to a commercial customer who won't allow Ag-Land FS to clean the tank first. They also recommend tank cleaning to farm customers.
"We spent $20,000 on a tank cleaning system, one of the few in Illinois," said Lockart. "We can clean a 30,000-gallon underground tank or a 500-gallon aboveground tank."
REPAIRING BIODIESEL'S REPUTATION
While a growing understanding of quality control and proper storage are repairing biodiesel's reputation, attitudes and expectations have been buoyed by recent Federal government initiatives. These include a 28 percent increase in the amount of biodiesel mandated for use in trucks. Initially set at 800 million gallons in 2011, it was raised to a billion gallons for 2013. The federal mandate requires petroleum refiners to purchase biodiesel or show compliance for blending biodiesel. They or others who blend can capture a $1 per gallon biodiesel blending tax credit. State initiatives, such as Illinois' sales tax exemption, are also seen as important to current and future biodiesel use.
Kevin Lockhart, energy consultant, Ag-Land FS, says clean tanks are critical when switching to biodiesel. Stroburg welcomes the increased Federal mandate, though it was less than the industry had lobbied for. He emphasized the importance of the $1 tax credit for helping build and maintain the infrastructure for biodiesel.
"We have to have it in place if we are going to have high quality fuels available to the marketplace," said Stroburg. "Continuing to build out the infrastructure is a major challenge. We need to continue to develop new types of feedstocks to convert. The recent price swings in commodities have been a challenge to plants without a management process in place to handle them. We need to find sources of unwanted fats and oils and convert them into high quality biodiesel."
Although biodiesel was first promoted as soy diesel and soybean growers were early funders and promoters, biodiesel has spread its wings in terms of feedstocks. Haer reported that soybeans made up only 55 percent of biodiesel feedstocks last year with canola accounting for 11 percent, recycled cooking oil 12 percent, animal fats 14 percent and corn oil from ethanol plants 8 percent. These alternatives to soybean feedstocks are expected to grow.
"We are a good market for inedible corn oil from ethanol plants, and there is an opportunity for growth in extraction of oil from distillers dried grains," said Haer. "There are also opportunities for canola to replace wheat acres and new oilseed crops like camelina to expand in more arid regions. We'll just have to see how the economics of producing oilseeds pans out."
BIODIESEL IS THE RIGHT THING TO DO
As a supplier seeking customers, Lockart said an even bigger challenge than the cost of biodiesel is winter use. It is one that he has been working to overcome, with extended use through the winter by the Ag-Land FS vehicle fleet that runs B11 or B20 blends year round. Many of their fleet customers are now doing the same with no issues reported in several years.
"We've proven B20 is efficient and, if used right, can be used year round," said Lockart. "Even when soybean prices go up as they have, we still have a market for it here, thanks to the sales tax exemption. Biodiesel can run 15 cents less than diesel in Illinois. With the blenders credit, it runs about even with diesel in surrounding states."
Biodiesel evangelist Lockart insisted there is much more to the story. It is a gospel he is eager to share, and one he feels is increasingly important to prospective customers. It is also one that Ag-Land FS has extensive data to support.
"Putting aside the economics, we want people to understand that biodiesel is just the right thing to do," he said. "It lowers emissions and reduces foreign oil imports. It may sound corny, but I've never worked with a product in my 20 years in energy that I could feel as good about at the end of the day."