Shell goes carbon negative, signs commercial-scale deal with SBI

If you think about it, the world of combustion engines could really use a carbon-negative story that goes father than electric cars and their entirely mythic but potent “zero emissions” storyline.

Shell might have just won that race.

Yep, they’re going carbon negative. Petroleum fuels emit 94 grams of CO2 per megajoule of energy. Shell’s latest deal with SBI Bioenergy gives it access to a fuel that emits Minus 14.

That means the atmosphere gets less carbon, with every mile you drive. You motor your way to a global emissions solution.

And, offering something that electric vehicles never will — a technology that claws us back from the carbon precipice instead of a technology class that lets us dangle there forever.

A Shell Turned Upside Down

It may be very apt that Shell is at the forefront, because not long ago the company re-organized and established its NewFuels entity, within which fits all its ambitions, including biofuels and hydrogen (and especially into the California market), and also put under one big umbrella all its interests in electric mobility, a renewed interest in solar and its new-found aggressive interest in offshore wind.

And the company has remained on the advanced biofuels warpath when others have blinked or gone elsewhere. As Shell’s EVP for alt energy Matthew Tipper told The Digest not long ago, “We will likely begin manufacture in the southeast United States. We plan to be operational by late this decade. Importantly, advanced biofuels could ultimately supply a significant part, perhaps all, of Europe’s transport fuels needs. So we have big plans. We have a credible vision.”

The SBI bombshell

Into that mix arrived a bombshell last week. As we reported here, Shell acquired exclusive development and licensing rights for SBI BioEnergy’s biofuel technology. Edmonton-based SBI has a patented process that can convert a wide range of waste oils, greases and sustainable vegetable oils into lower carbon drop-ins for diesel, jet fuel and gasoline.

“SBI has a promising new Canadian biofuels technology,” says Andrew Murfin, General Manager, Advanced Biofuels for Shell. “This is a great opportunity for us to combine Shell’s innovation and commercialization capabilities with SBI’s technical expertise to investigate the potential this technology has for commercial application.”

Why not before?

The technological breakthrough is that SBI uses a continuous catalytic process, called PICFTR. That stands for Process Intensifying Continuous Flow-Through Reaction, but we call it PickFooter. PickFooter was originally developed for production of advanced pharmaceuticals and fine chemical intermediates.

What are the advantages there? Think 7. 

1. Improved Kinetics. Reduces reaction time from hours to seconds by influencing reaction kinetics.

2. Improved Fuel Quality and Yield .

3. Handling of Energetic Exothermic Reactions:  PICFTR can handle highly energetic reactions that are simply not possible on commercial scale in batch.

4. Ease of Scalability. Pickfooter has a smaller physical footprint and the ability to quickly scale-up with much lower risk.

5. Reduced Energy Consumption:  PICFTR technology can operate with highly concentrated reactants that reduce energy consumption by up to 30%.

6. Reduced Costs. PICFTR provides several-fold cost reduction compared with current manufacturing techniques due to lower initial capital expenditures. For one,  it does not need to purchase hydrogen, incorporate expensive hydrogen safety features, consume water or chemicals, or build a large physical plant. Furthermore, SBI’s proprietary catalysts, called “Continuous Green Catalysts” (CGC), are inexpensive, have a long active life, and are easy to rejuvenate.

7. Improved Safety and Environmental Impact. With the reduction in quantities of reactants at any given moment to almost minuscule levels, various risks that affect the scalability of sensitive reactions are virtually eliminated.

How feedstock flexible?

The secret of carbon negativity is in the feedstock, which is waste fat, oil or grease. These have traditionally been made into biodiesel or batch renewable diesel. Here. it can be made into drop-in renewable gasoline, diesel or jet fuel.

SBI plans to source feedstock from local suppliers of vegetable oils or animal fats. SBI would like to eventually use vegetable oils from non-food oilseed crops such as carinata or camelina when these crops become commercially available. Other feedstock sources for its process include tall oil from pulp and paper mills or biodiesel from existing manufacturers.

The SBI backstory

We reported in March 2016 that SBI was preparing to open its drop-in renewable diesel and aviation jet fuel facility later that year. The demo facility near Edmonton will produce 10 million liters annually, which will be commissioned by year’s end, while a C$20 million commercial scale facility would be online by 2018 producing 240 million liters annually, the company said at the time.

Under the agreement, Shell and SBI will work together to demonstrate the potential of the technology and, if successful, scale up for commercial application.

“We are confident that Shell is the right industry partner to commercialize our low carbon intensity renewable fuel process,” says Inder Singh, SBI’s Founding President & CEO. “Working with Shell means that we have a partner with proven capabilities to investigate the potential this technology has for global application and that is something that is very exciting for us.”

Shell’s bustin’ a move

After all, “end of the decade” is right around the corner, when we think about building commercial-scale plants and commissioning them. And as Shell’s Andrew Murfin told The Digest, “As an industry we need to try and get something moving forward, and second plants coming along, so as we get closer to market, we want to see technologies with shorter gestation periods.”

So it’s not just about building first commercials. It’s about the Nth plant.

What’s come together besides technology?

Some of it is California, some of it is the wrenching re-organization of thinking at energy majors, partly due to catastrophically low fuel prices.

“What’s happened in California,” Murfin said, “is that you have better transparency and the targets have been restated, so it starts to have many of the features of the RFS, and we like the certainty of the RFS around advanced biofuels. The LCFS is even more transparent.”

“As with many more majors,” Murfin notes, “we’re very well tuned in to the energy transition, but it is really about how we position ourselves in that new world, and how we organize with real drive rather than a couple of sprints. This is all about how to put renewables into a serious business for the long term. We continue to look to create a global low-carbon business, even with the expected large impact of electrification, we see that heavy-duty will be liquid, and that represents a long-term opportunity.

“We see the space, and ourselves, as having been technology constrained. We have the feedstock, and we have the infrastructure, but we haven’t had the technology. That’s why we’ve been working on ethanol and drop-ins, as with our small-scale pilot cellulosic plant in Houston that we completed in 2015, and the feedstock trials we’ve been involved in in Texas and Arkansas, looking at improving storage among other aspects. And we also have the Raizen JV and the cellulosic plant, and we’ve seen the progress with the Iogen technology and we are learning from that on feedstock and materials handling.”

Shell’s other work continues

“In terms of drop-ins, we continue to develop a program out of Virent,” Murfin confirmed, “And the other tech is the IH2 technology, that comes in via CRI, and again there is a demo plant being built at our facility in Bangalore, similar to Houston, at a 5-ton per day scale and we’ll see how that fares. And, we’re also talking to partners, where it makes sense.”

And that’s SBI, right there in the “Department of It Makes Sense.”

We might have seen an announce earlier, but Shell put a ton of resources into looking at the Abengoa cellulosic ethanol project site, not long ago.

“The Abengoa site really presented for us as a site where we could have focus for our activities, and benefit from low-cost infrastructure and process. It just didn’t come to pass. We did a tremendous amount of work, soup to nuts on that technology and agreements, and at the end of the day we just had a different view on value, and others saw a higher valuation that we did.

The Bottom Line

The technology has been demonstrated at a small-scale, so in many ways this is a scale-up deal to get Shell into the Renewable Diesel business. Think Heavy Duty; for sure, Shell is.

We see a commercial project happening this decade.