Biomass Diesel

While cellulosic ethanol is just getting off the ground, the production of biomass-based diesel has climbed steadily, generally meeting its target volumes in the revised Renewable Fuel Standard (RFS2) with capacity to spare.

President Barack Obama shaking hands with the principal of Philadelphia's Workshop School, where student built a biodiesel car, on June 18, 2014/AP Images

How has diesel made from biomass become the poster child for renewable fuel production while commercial cellulosic ethanol production has been hamstrung by delays?

The short answer: Biomass-based diesel is a cheaper, more mature technology than cellulosic ethanol. In addition, the needed technology and production capacity were available before the Great Recession of 2008, the fallout of which has continued to plague investment in expensive cellulosic ethanol plants.

“The economic collapse really took the wind out of the entire biofuels industry,” says John Plaza, founder and CEO of Imperium Renewables, one of the largest U.S. producers of biodiesel. “Most of the biodiesel industry capacity was built prior to the economic collapse. And cellulosic ethanol was not yet built, not yet really ready to be commercialized, and needed some more work before it could really move forward. That led to sort of a stagnation in the scale-up of cellulosic ethanol.”

Biodiesel vs. renewable diesel

Two kinds of biomass-based diesel fuel qualify as advanced biofuels under the Renewable Fuel Standard (RFS2). The first is biodiesel. It is made from vegetable oil or animal fats, which are converted to fuel by a chemical process known as transesterification. While biodiesel is compatible with conventional diesel fuel, it is not identical. It is usually blended with conventional diesel in ratios of 5 percent or 20 percent biodiesel, often denoted as B5 and B20, which can be burned in diesel engines without modification.

The second kind of biomass-based diesel is called “renewable diesel” or “green diesel.” Like biodiesel, it is made from the oils of seeds, algae, or animal fats. Unlike biodiesel, it is transformed into fuel by a process used in conventional petroleum refining called hydrotreating. The resulting fuel is chemically identical to conventional diesel and can be blended in any proportion. It has a higher energy content than biodiesel and works better in cold weather. Because renewable diesel duplicates conventional diesel, Plaza acknowledges, it’s “a product that everybody would rather have.”

Biodiesel has made up the great majority of biomass-based diesel production, but renewable diesel production has increased rapidly in the last year. With at least a 50 percent reduction in greenhouse gas emissions compared to fossil diesel, both qualify as advanced biofuels in the U.S. under the RFS2 and meet California’s Low Carbon Fuel Standard (LCFS). This advantage has spurred both increased domestic production and imports, which spiked at nearly 60-thousand barrels per day at the end of 2013.

Advantages over cellulosic ethanol

Flasks of biofuel in a University of Florida laboratory; Credit:Tyler Jones/UF/FAS archives

Both biodiesel and renewable diesel have the advantage over cellulosic ethanol of being cheaper to capitalize — way cheaper. “Biodiesel is the cheapest biofuel production facility you can build,” says Plaza. According to an industry rule of thumb, says Plaza, a biodiesel plant costs about $1 per gallon of capacity. A renewable diesel plant costs about $3. And cellulosic plants range from $8 to $25 per gallon of capacity. Though cellulosic promises to be much cheaper to produce in the long run, says Plaza, “the cost of capital for construction is a major factor in deciding what industry scales.”

But biodiesel has its own set of issues. “The political angle of this industry is fraught with all sorts of problems,” says Plaza.

Two challenges in particular stand out. First is a $1-per-gallon tax credit for biomass-based diesel that Congress has repeatedly allowed to expire with uncertain expectations about its renewal. Second is waning support for the RFS2. Political maneuvering that many suspect is backed by the fossil fuel industry is undermining standards and threatens the industry, Plaza says.

“It’s great when that policy is in place,” says Plaza. “If that policy would remain in place, I think that industry could start to develop new feedstocks, start to develop a better business plan long term that allows it to be more cost-competitive. Of course, everybody forgets the fact that petroleum is already heavily subsidized.”

But there are politicians in the U.S. willing to step forward for biodiesel. In July 2014, 52 representatives from 22 states went to President Obama, asking him to raise volumes for biodiesel in the RFS2. The mandate calls for only 1.28 billion gallons in 2014 but the industry produced 1.8 billion in 2013. As a result, some plants began cutting back production or going idle. In a letter to the Obama administration on October 1, the Governors’ Biofuel Coalition stated that “[t]he EPA’s proposed volume cuts for biodiesel are creating turmoil, resulting in production cutbacks and layoffs.”

The U.S. is not the only country trying to absorb increased production. Argentina raised its blending mandate from 8 percent to 10 percent, largely to offset a decrease in exports to the E.U. in response to mandates in the Renewable Energy Directive (RED).  But the E.U. is struggling with sustainability restraints that offer economic protection of domestic fuel production and incentivize biodiesel from waste more than plant oils such as soybean.  In a controversial move, the E.U. implemented anti-dumping duties against Argentinian biodiesel last year and scaled back their biodiesel targets (which vary by nation) from 10 percent to 5 to 7.5 percent.

But the greatest impact on bio-based diesel is yet to come. Several companies are working to scale-up production of diesel from sugars through new microbial pathways, “micro-diesel” or new catalysis. As of 2014, 19 countries have biodiesel mandates in place. How these new technologies develop may well depend on whether these policy decisions remain stable over the long-term.

 

 

 

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