Biodiesel 2.0- the next chapter for America’s favorite advanced biofuel

January 20, 2014 |

blue-sunSnubbed by Washington as the EPA slashes biodiesel targets despite record production.

Now, the National Biodiesel Board gathers for its annual convention, in San Diego, to chart the next moves on its innovative path.

What could biodiesel 2.0 look like? Can it really lop 70-80 cents per gallon off the cost by opening up low-cost feedstocks? We look at the story of Blue Sun.

Good old St. Joe — that is, St. Joseph, Missouri, the eastern terminus of the Pony Express, and the town where Jesse James was finally gunned down by Robert Ford. It fell behind St. Louis as a Missouri River port a long time ago, but it may be just now making a comeback as home to one of the most interesting new technologies ever in the biodiesel game. And certainly the hottest one ever to emerge from the sleepy soybean-laden country around the northwestern corner of the “Show-Me State.”

An hour east of the annual National Biodiesel Conference, gathering this week in San Diego, is one of the last vestiges of the old Butterfield Stage that finally put the Pony Express out of business back in 1861 – you can see the old station at Warner Ranch, along the old Southern Emigrant Trail, the winter route to California’s gold fields abck in the days of the 49ers. A reminder of all the transformation that technology has wrought. Well, here’s another.

You see, Blue Sun Biodiesel, at their 30 million gallon per year facility, is announcing this week that they think they have licked the problem of enzymatic biodiesel at world-class scale — which promises to open up a whole new range of lower-cost feedstocks for America’s favorite advanced biofuel.

The claim

“The process developed by Blue Sun for enzymatic transesterification improves the bottom line through lower costs and higher revenue,” said Sean Lafferty, Vice President of Technology & New Business. “Blue Sun can use essentially any feedstock without limit to free-fatty-acid content. This reduces pre-treatment requirements and costs significantly. Blue Sun’s feedstock advantage alone can yield a savings of 10 cents per pound of feedstock, or 75 to 80 cents lower cost per gallon of finished biodiesel.”

Blue Sun’s process is more efficient in methanol recovery and use, further reducing costs. In co-products, the value of glycerin produced is much higher than in standard biodiesel operations – 20 to 30 cents per pound versus less than 10 cents per pound traditionally. Blue Sun engineers developed a unique proprietary process for enzymatic biodiesel production. This was necessary to overcome the hurdles typical in an entirely new manufacturing process.

The process

This new process utilizes Novozymes’ Callera Trans L enzyme. This is the first implementation in the world of enzymatic transesterification at 30 million gallon commercial scale.

Blue Sun's facility in St. Joseph, Missouri

Blue Sun’s facility in St. Joseph, Missouri

It wasn’t long ago that we first got news that enzymatic biodiesel was on its way — that is, using enzymes rather than caustic inorganic catalysts to separate the glycerine from the fatty acid methyl esters that are constituents of triglyceride oils that are found in plants and animal fats.

Novozymes has been hard at work in developing such a process, and companies such as Piedmont Biofuels and Viesel have licensed it. Piedmont has been operating for some time — albeit at a smaller-scale — for some time.

The progress

“We have fully commercialized the enzymatic process technology and the plant is operating at full commercial scale. This process gives Blue Sun a clear competitive advantage in the market, allowing us to bring the absolute highest quality fuel to market using this industry leading technology,” said Leigh Freeman, Blue Sun’s CEO. “This achievement again shows Blue Sun’s ability to identify and commercialize the most relevant advanced technologies in fuel production.”

Why isn’t everyone embracing this technology right now?

But it was one thing to develop a technology in the pristine lab environments from which Novozymes’s magic enzymes had first emerged. Quite another to develop the process technology to keep the critters alive under normal processing conditions. Given the cost of enzymes — making them pay off as a processing technology means keeping them sane, healthy and happy through processing, recovery and re-use.

Like many things, it comes down to how many “turns” you can get out of a give enzyme or catalyst. Use it once? Too expensive. Use it multiple times? You’re on the way to getting that cost down to the point where it is a feasible technology.

That’s what Blue Sun has been up to, ever since they first licensed the technology in the years after they took over an old biodiesel plant in St. Joseph, with an ambition to use advanced technology to unlock low-cost feedstocks.

You see, that’s what the prize is in using enzymes to make biodiesel — as opposed to the traditional process. In the old  process, you can use oils only up to a certain percent of what are called FFAs – free fatty acids. Low FFA – traditional biodiesel is your friend. High FFA – that’s where the new technologies can come in.

And it just so happens that, accordingly, high FFA feedstocks are remarkably cheaper.

Little known fact in the corn oil revolution – where corn oil is being extracted from corn before ethanol processing and sold to biodiesel producers as a feedstock — is that corn oil generally has to be pre-processed and the high FFA oils have to be stripped off before it can be used. That residue? Becomes a feedstock for technologies like enzymatic biodiesel.

“It sounds simple, throw enzymes and oil together and get glycerine and fuel. It sounds simple, but it’s not so. You have to have very good distillation and handling procedures if you are going to be able to reuse the enzyme. For one thing, distilling enzymatically treated fuel creates new compounds not seen before, so you have to find ways to treat the product, affordably.

“Blue Sun acquired control of the facility on Dec 30 2011,” said Freemen. “We went into the old plant and replaced a whole lot of pumps and valves, just to get into transesterification and primary production, using a diversified range of feedstocks. Then we went to work on this technology, and have invested something like $15 million to date on the entire project,

“Now, we have been working on establishing an extra high-quality biodiesel with Novozyme’s enzymatic approach, to make biodiesel that, if not the lowest, is at least one of the lowest cost biodiesel fuels in the world.

“We have identified 5-7 plants that would be viable candidates for this process, and could acquire 1 or more and retrofit. We see that up to 10% of the industry’s capacity could be utilizing this technology in the next few years, and expect to have at least one plant and maybe two underway by next year, and reach over 100 million gallons of capacity by end of 2015.

Feedstock Costs

in today’s market – soybean oil is at 38 cents and has peaked as high as 50 cents. Choice white grease at slightly under 35 cents give or take a little, and distillers corn oil is in the vicinity of 30-31 as low as 26. What we have been targeting are the fatty acid distillates, the FADs, that can trade as low as 19 cents, today trading at 24-25 per pound, at a 5-10 cent discount to virtually all other feedstock.

The opex costs are comparable, excepting that there is a little less reprocessing in our case. We might pick up a nickel or a dime over traditional processing, but no more. It’s really about changing the feedstock.

Why 5-7 plants?

Well, its 5-7 primarily because of the feedstock proximity. And we need relatively well-built plants, not the ones that were slanged together. Plus, our conversion has to be focused, for economic reasons, on plants with 20 million gallons or more in capacity. The sweet spot is 40-60 million gallons, but there are not many of those. We think we can pick up plants in our target at something like 25-30 cents on the dollar.

The retrofit

It’s around $10-$15 million to retrofit, but it depends on the infrastructure available, depends on whether they need logistics, rail, truck, distillation and so on.

The geographies

We like this area, northwestern Missouri, but anything anything along a big river or something like the gulf coast or far west coast is good for us. Through december we are shipping to stockton and still netting a 40 cent premium – because of the LCFS.

Life without a tax credit?

If we didn’t have RINs and the credit gone, it would be an adjustment, but we still have what we see as an 60-80 cents advantage over the other guy in terms of cost, so that will help us.

The bottom line – Biodiesel 2.0

What is biodiesel 2.0 — it is technology that opens up the range of new feedstocks — whether these are techniques for making new feedstocks (such as new algae farms), or technologies that unlock the world of residues. You see, soybeans and canola are good — waste is better. Feedstocks made on waste land are best of all – , or through double-cropping or through rotation.

That’s what Biodiesel 2.0 is all about. And a number of those technologies and their developers are on parade this week at NBB’s annual hoedown. We can’t wait.

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