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Renewable Diesel on the March

| November 13, 2012

UOP, Eni update on the complete conversion of Eni’s Venice refinery to renewable diesel. Why is renewable diesel getting traction – and where, and when?

Most of the action and controversy on biofuels, advanced or otherwise, occurs on the gasoline side of the equation. Food vs fuel, blend walls, the “where are the gallons?” problems of cellulosic ethanol – these tend to occur in the drive to replace gasoline with renewable fuels.

Over in diesel-land, there’s been controversy, but much less. Bio-based diesel has a much less controversial set of environmental attributes, for one. Secondly, ranchers, dairy and poultry farmers tend to freak out less over bio-based diesel mandates, since they generally do not compete with the livestock industry for feedstock. Biodiesel made from palm oil has attracted substantial criticism, merging as it does into a generally critical conversation over land conversion in Southeast Asia.

Unlike biodiesel, Green Diesel is a drop-in replacement for traditional diesel. Chemically identical to petroleum-based diesel, Honeywell Green Diesel can be used in any proportion in existing fuel tanks without infrastructure changes.

So it’s a positive sign, but not entirely a shocker, when Honeywell’s UOP and Italy’s largest energy company, Eni, offered new details about plans to produce renewable diesel using the Ecofining process at En’s Venice refinery.

In a $125 million retrofit, Eni will retrofit existing equipment at its facility, currently being used to produce petroleum-based diesel, to produce 100 million gallons per year of renewable diesel at its Venice facility beginning in 2014. In addition to technology licensing, Honeywell’s UOP and its affiliates will provide basic engineering, specialty equipment and training for the project.

The Green Refinery process will start with an initial conversion of existing facilities which will be launched in the second quarter of 2013 and completed by the end of that year.

The UOP/Eni Ecofining process produces a renewable diesel fuel which is a drop-in replacement for traditional diesel. Unlike biodiesel, it is chemically identical to petroleum-based diesel and can be used in any proportion in existing fuel tanks without engine or infrastructure changes.

This renewable diesel offers a lifecycle reduction in greenhouse gas emissions of as much as 80 percent compared with diesel derived from petroleum. It also offers high energy density and excellent performance at cold or warm temperatures. The fuel can be used as a high-quality blending stock for refiners seeking to enhance or expand their diesel pool.

The process

Honeywell’s UOP and Eni jointly developed the UOP/Eni Ecofining process, which uses hydroprocessing technology to convert non-edible natural oils and animal fats to a fully fungible renewable diesel. The fuel offers improved performance over biodiesel and petroleum-based diesel, including a high cetane value of 80 compared with a cetane range of 40 to 60 found in diesel at the pump today. Cetane value is the measure of the combustion quality of diesel. Higher cetane values help diesel engines operate more effectively.

Elsewhere in renewable diesel

The trend towards adding renewable diesel capacity is unmistakable.

Last month, Aemetis announced an expanded, global license agreement with Chevron for renewable jet and diesel fuel. The expanded license grants Aemetis the use of an isoconversion process to produce fuels that meet the necessary ASTM requirements for 100% replacement, renewable jet fuel, and diesel in Aemetis biorefineries.

The same week, In California, Biodico announced a new agreement with the U.S. Navy to produce renewable petroleum diesel equivalent liquid fuels, bio-based products and energy using renewable resources at Department of Defense (DoD) facilities.

The collaboration is partially supported by grants from the California Energy Commission. According to Biodico’s President and Founder, Russell Teall, “As part of this agreement we are building a sustainable biorefinery at Naval Base Ventura County that will produce biofuel and bioenergy at prices competitive with unsubsidized conventional fuel and power.”

In May, UOP announced an agreement to license the Ecofining technology to Emerald Biofuels to produce Honeywell Green Diesel at an 85 million gallons per year plant that will be engineered by International Alliance Group (IAG).

Emerald is an Illinois-based transportation fuel company that focuses on building renewable diesel refineries that produce environmentally friendly transportation fuels at prices competitive to petroleum-based fuels.  will provide engineering, procurement and construction services for the project.

Diesel, CAFE standards and the Renewable Fuel Standard

We’ve highlighted before that CAFE standards, which call for increasing average fuel economy to 54.5 miles per gallon for light-duty vehicles by 2025, could spell trouble fro the Renewable Fuel Standard. Estimates of US gasoline demand in 2025 are as low as 80 billion gallons, as CAFE takes impact, and where exactly will 36 billion gallons of mandated biofuels go?

Two problems. One, ethanol blend walls. Two, what’s left for the traditional US refining industry to make – how are they going to survive? Keep in mind, they are the obligated blending parties. No blenders, no RFS2.

That’s where renewable diesel may offer opportunities. The Ecofining process is based at a traditional refinery, and produces an infrastructure-compatible fuel that goes into the heavy-duty tanks in the fleet, not the light-duty ones.

The bottom line

Diesel and jet fuel – keep a sharp eye on those channels. There, we see eager offtakers and enthusiasm from refiners and their technology partners like UOP. We also see fewer market access problems, and on the diesel side we have a growing group of producers who can make diesel and refinery intermediates at parity cost to crude oil.

Parity cost, parity performance, environmental attributes, and $1.25 per gallon retrofit costs. No wonder refiners and offtakers are excited.

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