Largest green diesel plant completed in US, Diamond Green Diesel: can it make money?

Existing feedstocks rule, scale matters

To work as a financial project, Diamond Green Diesel will be the largest consumer of recycled restaurant grease and animal fats in North America (1.1 billion pounds annually). As much as 11% of US used cooking oils and animal fats will be processed at the Diamond Green Diesel facility

As we wrote in naming this project to our “Diamond Dozen“:

“Overwhelmingly, one trend is clear: all of the projects expected to reach significant scale by 2017 features a feedstock that is already aggregated, or already in existence and easy to aggregate. Novel feedstocks such as energy grasses or canes – that’s a sure ticket to small-scale or the very long term.

“Take the existing US corn ethanol fleet, for example. Three companies are expected to build 1.2 billion gallons of advanced biofuels (Butamax, Gevo and POET-DSM) over the next five years using corn starch, cobs and stover. Then there’s the existent wood basket – which forestry companies have long since demonstrated an ability to grow, harvest and aggregate on a sustainable basis.

“Animal residues and palm oil (already aggregated) represent another 709 million gallons, and then we have more than 600 million gallons from natural gas. Even the advanced fermentation technologies expect to use existing supplies of sugars and CO2.

“The message is clear. The bottleneck in advanced biofuels – the underlying problem in the “Where are the gallons?” equation – lies in the feedstocks. There are. these days, plenty of technologies available that can generate 70-130 gallons per ton of biomass at what, according to their analysis, will be at competitive prices to $100 oil.

In today’s Digest, we look the RIN market, and we show charts for the economics of making money from animal fats – all by following the page links below.