The DIY Renewable Fuel Standard

Biobutanol, ethanol, renewable diesel, renewable gasoline and biodiesel — five renewable fuels.

By what combination could they meet the titanic US target of 36 billion gallons of renewable fuel by 2022?

Try your own ideas? Be the operator with your pocket calculator. 

36 billion gallons by 2022 – two numbers that, to the bystander, probably don’t mean very much at all. They represent the present US renewable fuel target and a date. Nine years out seems a very long time away — but in the world of building capacity for renewable fuels, the blink of an eye.

Let’s put it in context.

First, there’s what Digest senior editor Meghan Sapp describes as the “Mad scramble on the Hill to make sure the EPA doesn’t decapitate the Renewable Fuel Standard.” She reports:

“The last two weeks have seen a frenzy of lobbying efforts by both biofuel producers and oil industry to ensure the EPA gets the RFS for 2014 “right.”. Reuters says that since the government reopened on Oct. 21 that there have been 17 meetings held at the White House over the issue with 84 lobbyists attending, 70% of those coming from the biofuels industry. Supposedly the Obama administration is putting on a poker face but some told Reuters that they are leaning towards the significantly lower blending mandate seen in the recently leaked EPA draft.”

That’s where we are, the war over 18 vs 14 billion gallons.

Now, let’s put 36 billion gallons in some more context.  Take for example Brazil. The leading ethanol market in the world, excepting the United States. What does 36 billion gallons represent in that market. Well, it’s 10 percent more than the demand for all fuels, of every type, combined, in that country.

So, it’s a big, big number as targets go. And how might it be achieved?

Be the EPA Administrator – with your free online RFS calculator.

You may wish to try working through the numbers on your own. It’s easy if you use the Digest’s free, simple Online RFS Calculator – here.

Just plug in the gallonages you think are feasible for fuels like ethanol, biobutanol, biodiesel, renewable diesel and renewable gasoline, and the calculator tells you how many RINs you will generate toward a given year’s Renewable Fuel Standard target.

Access that free tool here. Be the operator with your pocket calculator.

You can even calculate the RFS the cool way, accompanied by Kraftwerk, here.

Not a D-I-Y fan? Try these RFS scenarios

As an alternative, here’s some Digest RFS math, brought to you by a pack of English majors.

In a Butamax scenario distributed earlier this week, they showed an example of how biobutanol and E85 combine to provide a compliance vehicle without breaking blendwalls.

7.5 billion RINs — 75 billion gallons of fuel blended with E10 ethanol
5.2 billion RINs — 25 billion gallons of fuel blended with Bu16 biobutanol
23.3 billion RINs — 28 billion gallons of fuel blended with E85 ethanol

Now, it overlooks — presumably for simplicity — the market for biodiesel, renewable diesel and renewable gasoline. Renewable gasoline might be at light volumes by 2022, but both renewable diesel and biodiesel are viable fuel types with robust supply. And that’s an unattainable goal for E85, even though prices look good — more fuel than all 14 million flex-fuel vehicles consume (of any type).

Adding in biodiesel

The National Biodiesel Board has set a target of 10×22 — or 10 percent of on-road diesel by 2022. That equates to around 3.4 billion gallons of biodiesel — assuming on-road represents about 60 percent of overall demand.

And we haven’t considered the market for renewable diesel. Right now, there’s around 900 million gallons in global capacity, all of it hungry for the US market. With companies like Emerald coming along, not to mention the scale-up at KiOR and Joule — expect that number to climb to 2.5 billion gallons by 2022.

So, let’s vary the scenario again.

8.7 billion RINs — 87 billion gallons of fuel blended with E10 ethanol
5.2 billion RINs — 25 billion gallons of fuel blended with Bu16 biobutanol (1.3 RINs per gallon)
5.1 billion RINs — 3.4 billion gallons of biodiesel blended into diesel (1.5 RINs per gallon)
4.25 billion RINs — 2.5 billion gallons of diesel replaced with renewable diesel (1.7 RINs per gallon)
13.6 billion RINs — 16 billion gallons of fuel blended with E85 ethanol

Optimizing the butanol-ethanol mix

And what about stretching that biobutanol capacity? There’s 15 billion gallons of capacity in the US — and most of it could be converted to biobutanol. Seems like the split of butanol and ethanol does not optimize the mix.

Instead, let’s use it in an optimal way, by adding butanol capacity at the expense of ethanol.

6.66 billion RINs — 66 billion gallons of fuel blended with E10 ethanol
10.4 billion RINs — 50 billion gallons of fuel blended with Bu16 biobutanol (1.3 RINs per gallon)
5.1 billion RINs — 3.4 billion gallons of biodiesel blended into diesel (1.5 RINs per gallon)
4.25 billion RINs — 2.5 billion gallons of diesel replaced with renewable diesel (1.7 RINs per gallon)
9.7 billion RINs — 11.4 billion gallons of fuel blended with E85 ethanol

So, there’s a workable scenario, in terms of blend walls — and presumed capacity expansion on the diesel side.

Is there enough capacity — is a build-out in order?

Let’s look at existing capacity.  Right now, the US has around 15 billion gallons in capacity. According to most authorities, this can be expanded by 25 percent, per site, based on adding cellulosic feedstock from the same draw area. So, that gives us 18.8 billion gallons or so in base capacity.

Now, the scenario above is predicated on roughly 29.4 billion gallons in capacity. Meaning the US is roughly 10.6 billion gallons short in greenfield ethanol projects using new draw areas for feedstock — not counting expected growth in biodiesel and renewable diesel. And not including bolt-ons such as algae that consumer CO2 from ethanol fermentation.

Based on 40 million gallon projects — generally considered a maximum project size for cellulosics at today’s prices — that’s roughly 27 greenfield projects. At 90 gallons per ton, it’s a demand for roughly 117 million tons of feedstock.

Capex? At roughly $8 per cellulosic gallon, and $1.50 for biodiesel capex, and $3 for other project types — total bill of something like $115 billion.